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The impact of insurer competition on welfare, negotiated provider prices, and premiums in the U.S. private health care industry is theoretically ambiguous. Reduced competition may increase the premiums charged by insurers and their payments made to hospitals. However, it may also strengthen insurers' bargaining leverage when negotiating with hospitals, thereby generating offsetting cost decreases. To understand and measure this trade-off, we estimate a model of employer-insurer and hospitalinsurer bargaining over premiums and reimbursements, household demand for insurance, and individual demand for hospitals using detailed California admissions, claims, and enrollment data. We simulate the removal of both large and small insurers from consumers' choice sets. Although consumer welfare decreases and premiums typically increase, we find that premiums can fall upon the removal of a small insurer if an employer imposes effective premium constraints through negotiations with the remaining insurers. We also document substantial heterogeneity in hospital price adjustments upon the removal of an insurer, with renegotiated price increases and decreases of as much as 10% across markets.

We estimate the impact of exogenous capital shocks, namely the Troubled Asset Relief Program (TARP), on prices in various property-casualty business lines. We hypothesise that these capital shocks may distort insurer incentives. Specifically, insurers may exploit the implicit governmental guaranty by taking additional pricing risks in order to gain market share. Our results do not support this hypothesis. We find no evidence of a company-specific, or industry-wide, moral hazard problem associated with the implicit (explicit, in some cases) federal backstop created by TARP funds.

Specialist groups have often advised health ministers and other decision makers in developing countries on the use of social health insurance (SHI) as a way of mobilizing revenue for health, reforming health sector performance, and providing universal coverage. This book reviews the specific design and implementation challenges facing SHI in low- and middle-income countries and presents case studies on Ghana, Kenya, Philippines, Colombia, and Thailand.

Policy Points Looking for a way to curtail market power abuses in health care and rein in prices, 20 states have restricted most‐favored‐nation (MFN) clauses in some health care contracts. Little is known as to whether restrictions on MFN clauses slow health care price growth. Banning MFN clauses between insurers and hospitals in highly concentrated insurer markets seems to improve competition and lead to lower hospital prices. Context Most‐favored‐nation (MFN) contract clauses have recently garnered attention from both Congress and state legislatures looking for ways to curtail market power abuses in health care and rein in prices. In health care, a typical MFN contract clause is stipulated by the insurer and requires a health care provider to grant the insurer the lowest (i.e., the most‐favored) price among the insurers it contracts with. As of August 2020, 20 states restrict the use of MFN clauses in health care contracts (19 states ban their use in at least some health care contracts), with 8 states prohibiting their use between 2010 and 2016. Methods Using event study and difference‐in‐differences research designs, we compared prices for a standardized hospital admission in states that banned MFN clauses between 2010 and 2016 with standardized hospital admission prices in states without MFN bans. Findings Our results show that bans on MFN clauses reduced hospital price growth in metropolitan statistical areas (MSAs) with highly concentrated insurer markets. Specifically, we found that mean hospital prices in MSAs with highly concentrated insurer markets would have been $472 (2.8%) lower in 2016 had the MSAs been in states that banned MFN clauses in 2010. In 2016, the population in our sample that resided in MSAs with highly concentrated insurer markets was just under 75 million (23% of the US population). Hence, banning MFN clauses in all MSAs in our sample with highly concentrated insurer markets in 2010 would have generated savings on hospital expenditures in the range of $2.4 billion per year. Conclusions Our empirical findings suggest banning MFN clauses between insurers and providers in highly concentrated insurer markets would improve competition and lead to lower prices and expenditures.

Fifty years ago, health outcomes in the countries of Eastern Europe and Central Asia were not far behind those in Western Europe and well ahead of most other regions of the world. But progress since then has been slow. While life expectancy in the ECA region today is close to the global average, the gap with its western neighbors has doubled, and other middle-income regions have all surpassed ECA. Some countries in the region are doing better, but full convergence with the world’s most advanced health systems is still a long way off. At the same time, survey evidence suggests that the health sector is the top priority for additional investment among populations across the region. The experience of high-income countries also suggests that popular demand for strong and accessible health systems will only grow over time. Yet these aspirations must be reconciled with current fiscal realities. In brief, health sector issues are a challenge here to stay for policy-makers across the ECA region. This report draws on new evidence to explore the development challenge facing health sectors in ECA, and highlights three key agendas to help policy-makers seeking to achieve more rapid convergence with the world’s best performing health systems. The first is the health agenda, where the task is to strengthen public health and primary care interventions to help launch the \"cardiovascular revolution\" that has taken place in the West in recent decades. The second is the financing agenda, in which growing demand for medical care must be satisfied without imposing undue burden on households or government budgets. The third agenda relates to broader institutional arrangements. Here there are some key reform ingredients common to most advanced health systems that are still missing in many ECA countries. A common theme in each of these three agendas is the emphasis on improving outcomes, or \"Getting Better\".

Managed competition is a key driver in healthcare systems in countries like Germany, Switzerland, and The Netherlands. Trust in health insurers is vital but currently low in The Netherlands. This may be due to perceptions regarding profit motives, negative experiences, media coverage, and a lack of understanding of insurers’ roles. This study explores how enrollees perceive health insurers and how the aforementioned factors contribute to these perceptions. Semi-structured interviews were conducted with 17 participants from the Nivel Dutch Health Care Consumer Panel in March and April 2023. Data were analysed using Braun and Clarke’s six-step method for inductive thematic analysis. Participants generally view health insurers positively in terms of managing finances and ensuring care accessibility. However, some perceive insurers as profit-driven and prioritising cost reduction over individual needs, leading to dissatisfaction. Negative experiences and media coverage also shape these perceptions. Participants believe that insurers should ensure care accessibility and quality, distribute costs fairly, provide guidance, and prioritise preventive measures. To foster trust, insurers should communicate their non-profit status and use of benefits, increase transparency in purchasing decisions, and maintain clear communication about payment obligations. Enhancing communication about their contributions to healthcare and raising awareness of their broader roles may also help build trust.

In health care systems based upon managed competition, insurers are expected to negotiate with providers about price and quality of care. The Dutch experience, however, shows that quality plays a limited role in insurer–provider negotiations. It has been suggested that this is partly due to a lack of cooperation among insurers. This raises the question whether cooperation amongst insurers is a precondition or a substitute for quality-based competition. To answer this question, we mapped insurers' cooperating activities to enhance quality of care using a six-stage continuum. The first three stages (defining, designing and measuring quality indicators) may enhance competition, whereas the next three stages (setting benchmarks, steering patients and selective contracting) may reduce it. We investigated which types of insurer cooperation currently take place in the Netherlands. Additionally, we organized focus groups among insurers, providers and other stakeholders to examine their perceptions on insurer cooperation. We find that all stakeholders see advantages of cooperation amongst insurers in the first stages of the continuum and sometimes cooperate in this domain. Cooperation in the next stages is almost absent and more controversial because without adequate quality information, it is difficult to assess whether the benefits outweigh the cost associated with reduced competition.

In the Dutch health care system, health insurers negotiate with hospitals about the pricing of hospital products in a managed competition framework. In this paper, we study these contract prices that became for the first time publicly available in 2016. The data show substantive price variation between hospitals for the same products, and within a hospital for the same product across insurers. About 27% of the contract prices for a hospital product are at least 20% higher or lower than the average contract price in the market. For about half of the products, the highest and the lowest contract prices across hospitals differ by a factor of three or more. Moreover, hospital product prices do not follow a consistent ranking across hospitals, suggesting substantial cross-subsidization between hospital products. Potential explanations for the large and seemingly random price variation are: (i) different cost pricing methods used by hospitals, (ii) uncertainty due to frequent changes in the hospital payment system, (iii) price adjustments related to negotiated lumpsum payments and (iv) differences in hospital and insurer market power. Several policy options are discussed to reduce variation and increase transparency of hospital prices.

Purpose This paper aims to investigate the problem of searching for the equilibrium in the housing market, the mortgage lending market and the insurance market in the process of selling the residential property. Three classes of markets are established in three modes, which reflect the interdependence of the firms’ interests in these markets through the parameters of their integration. The paper aims to determine the prices in these markets on the basis of the compromises among the conflicting interests of the related firms, and, in addition, to assess the rationality of integration for firms, which are participants in the process of selling the residential property. Design/methodology/approach On the basis of the revenue sharing contracts and the supply chain coordination methods, the optimization models of the housing realtor, the mortgage bank and the insurance company are developed. The models consider the interdependence of the firms’ interests, the monopolistic competition in these markets and the conditions of the firms’ individual rationality in the interaction process. Findings The results of the study are as follows. First, as a consequence of a decrease in the demand curves in monopolistic competition, the housing market, the mortgage market and the insurance market are interconnected, therefore, the optimization models of the firms in these markets are interdependent through the revenue sharing parameters. Second, in these markets the individual firms’ sales optimums are not identical, therefore, the interests of the firms are contradictory. Third, in the realtor-bank-insurer system, the equilibrium satisfies the condition of zero revenue sharing payments between the agents; additionally, the equilibrium prices in these markets are mutually independent. Fourth, in the disequilibrium, the prices in these markets are interrelated, i.e. the price in one market increases with the price in another market, if the payment is directed from the former to the latter, and vice versa. Research limitations/implications The results of the study are applicable in practice, if the markets demonstrate the decreasing demand curves and if the needs of buyers in related markets are interconnected. Practical implications The interaction between the realtor and the mortgage bank enables the realtor to raise its sales and the bank to increase in the number of loans, i.e. it leads to growth of their profits. The interaction between the insurer and the mortgage bank enables the insurer to increase in the number of policies and the bank to reduce the risk of lending, i.e. it leads to an increase in their profits. The identification of the individual firms’ sales optimums enables agents to determine the terms of the contracts of these interactions, which are compromises from the positions of each transaction participants. In addition, the firms’ optimums indicate the predictions of the equilibrium market prices. Originality/value In comparison with the studies in the contract theory framework, first, the mathematical description of the complicated (three-agent) system of interactions is proposed; second, the optimal choice non-linear models are developed, which take into account the non-linear demand functions in the monopolistic competition markets; third, the equilibrium of the agents with contradictory interests is investigated. In the later item, the authors establish that the revenue sharing contracts in the complimentary demands functions systems do not require the payments between the participants. Fourth, the authors prove that, in the equilibrium of these markets, the housing prices, the mortgage interest rates and the insurance rates are mutually independent and equal to the prices in the isolated markets.

With the rapid development of e-commerce, Return Freight Insurance (RFI) has emerged as a vital tool for retailers and customers to mitigate the financial burden posed by high return rates in online shopping. This paper investigates the strategic decision-making of RFI providers (insurers), examining whether they should offer fixed-compensation insurance at a lower price or full-coverage insurance at a higher price under varying market conditions. Specifically, we develop game-theoretic models to analyze insurers’ strategic decisions in both monopoly and duopoly markets, accounting for customer return cost and product mismatch probability heterogeneity. Our findings reveal that in a monopoly market, when customer return costs are relatively low and concentrated, insurers benefit from offering fixed compensation insurance (i.e., pre-set reimbursement amounts) at a lower price to attract a broader customer base. By contrast, when return costs are more dispersed and higher, full-coverage insurance (which reimburses actual freight costs) becomes more profitable, as the insurer can utilize its flexible pricing power to attract higher-paying customer segments. In a duopoly market, customer return cost heterogeneity significantly influences market equilibrium. When heterogeneity is high, full-coverage insurance dominates, as insurers can leverage precise market segmentation to justify higher premiums. Conversely, when return costs are more uniform, fixed compensation insurance is preferred for its affordability, appealing to a wider range of customers.