title: Switching benefits and costs in competitive health insurance markets: A conceptual framework and empirical evidence from the Netherlands.
abstract: Competitive health insurance markets will only enhance cost-containment, efficiency, quality, and consumer responsiveness if all consumers feel free to easily switch insurer. Consumers will switch insurer if their perceived switching benefits outweigh their perceived switching costs. We developed a conceptual framework with potential switching benefits and costs in competitive health insurance markets. Moreover, we used a questionnaire among Dutch consumers (1091 respondents) to empirically examine the relevance of the different switching benefits and costs in consumers' decision to (not) switch insurer. Price, insurers' service quality, insurers' contracted provider network, the benefits of supplementary insurance, and welcome gifts are potential switching benefits. Transaction costs, learning costs, 'benefit loss' costs, uncertainty costs, the costs of (not) switching provider, and sunk costs are potential switching costs. In 2013 most Dutch consumers switched insurer because of (1) price and (2) benefits of supplementary insurance. Nearly half of the non-switchers - and particularly unhealthy consumers - mentioned one of the switching costs as their main reason for not switching. Because unhealthy consumers feel not free to easily switch insurer, insurers have reduced incentives to invest in high-quality care for them. Therefore, policymakers should develop strategies to increase consumer choice.
authors.affiliation: Institute of Health Policy and Management, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR Rotterdam, The Netherlands. Electronic address: duijmelinck@bmg.eur.nl.
authors.forename: Daniëlle M I D
authors.initials: DM
authors.lastname: Duijmelinck
authors.affiliation: Institute of Health Policy and Management, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR Rotterdam, The Netherlands. Electronic address: ilaria.mosca@ecorys.com.
authors.forename: Ilaria
authors.initials: I
authors.lastname: Mosca
authors.affiliation: Institute of Health Policy and Management, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR Rotterdam, The Netherlands. Electronic address: vandeven@bmg.eur.nl.
authors.forename: Wynand P M M
authors.initials: WP
authors.lastname: van de Ven
mesh_terms: D000293:Adolescent; D000328:Adult; D000368:Aged; D000369:Aged, 80 and over; D002755:Choice Behavior; D003258:Consumer Behavior; D003363:Cost Control / Q000191:economics; D003362:Cost-Benefit Analysis; D004465:Economic Competition / Q000191:economics*; D005260:Female; D006801:Humans; D007343:Insurance Carriers / Q000191:economics; D007348:Insurance, Health / Q000191:economics*; D008297:Male; D008875:Middle Aged; D009426:Netherlands; D055815:Young Adult
keywords: Competitive insurance market; Health insurance; Switching behaviour; Switching benefits; Switching costs