title: A method to simulate incentives for cost containment under various cost sharing designs: an application to a first-euro deductible and a doughnut hole.
abstract: Many health insurance schemes include deductibles to provide consumers with cost containment incentives (CCI) and to counteract moral hazard. Policymakers are faced with choices on the implementation of a specific cost sharing design. One of the guiding principles in this decision process could be which design leads to the strongest CCI. Despite the vast amount of literature on the effects of cost sharing, the relative effects of specific cost sharing designs-e.g., a traditional deductible versus a doughnut hole-will mostly be absent for a certain context. This papers aims at developing a simulation model to approximate the relative effects of different deductible modalities on the CCI. We argue that the CCI depends on the probability that healthcare expenses end up in the deductible range and the expected healthcare expenses given that they end up in the deductible range. Our empirical application shows that different deductible modalities result in different CCIs and that the CCI under a certain modality differs across risk-groups.
authors.affiliation: Institute of Health Policy and Management, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR, Rotterdam, The Netherlands. cattel@bmg.eur.nl.
authors.forename: D
authors.identifier: http://orcid.org/0000-0001-6759-7874
authors.initials: D
authors.lastname: Cattel
authors.affiliation: Institute of Health Policy and Management, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR, Rotterdam, The Netherlands.
authors.forename: R C
authors.initials: RC
authors.lastname: van Kleef
authors.affiliation: Institute of Health Policy and Management, Erasmus University Rotterdam, P.O. Box 1738, 3000 DR, Rotterdam, The Netherlands.
authors.forename: R C J A
authors.initials: RCJA
authors.lastname: van Vliet
mesh_terms: D003363:Cost Control; D017047:Cost Sharing; D003669:Deductibles and Coinsurance; D007348:Insurance, Health; D009042:Motivation
keywords: Cost containment; Deductibles; Expected health expenses; Health insurance; Incentives; Moral hazard