title: Risk-adjusting the doughnut hole to improve efficiency and equity.
abstract: An important goal of consumer cost-sharing in health insurance is to increase incentives for cost containment. A relatively new cost-sharing phenomenon is the "doughnut hole": a gap in coverage starting at a predefined level of medical expenses. An important question is where to locate the starting point to achieve the strongest incentives for cost containment. We argue that the answer depends on an individual's health status. Using data from a Dutch insurer, this paper illustrates that using a risk-adjusted starting point results in both stronger incentives for cost containment and more equity than a uniform starting point.
authors.affiliation: Institute of Health Policy and Management, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR Rotterdam, The Netherlands. vankleef@bmg.eur.nl
authors.forename: Richard C
authors.initials: RC
authors.lastname: van Kleef
authors.forename: Wynand P M M
authors.initials: WP
authors.lastname: van de Ven
authors.forename: René C J A
authors.initials: RC
authors.lastname: van Vliet
mesh_terms: D002908:Chronic Disease / Q000191:economics; D003363:Cost Control; D017047:Cost Sharing / Q000379:methods*; D006304:Health Status; D006801:Humans; D054524:Medicare Part D / Q000191:economics*; D018803:Models, Economic; D020379:Risk Adjustment / Q000191:economics* / Q000379:methods*; D014481:United States