Self-selection and risk selection on the Swiss health insurance market

Abstract This thesis presents three empirical studies in the field of health insurance in Switzerland. First we investigate the link between health insurance coverage and health care expenditures. We use claims data for over 60 000 adult individuals covered by a major Swiss Health Insurance Fund, followed for four years; the data show a strong positive correlation between coverage and expenditures. Two methods are developed and estimated in order to separate selection effects (due to individual choice of coverage) and incentive effects ("ex post moral hazard"). The first method uses the comparison between inpatient and outpatient expenditures to identify both effects and we conclude that both selection and incentive effects are significantly present in our data. The second method is based on a structural model of joint demand of health care and health insurance and makes the most of the change in the marginal cost of health care to identify selection and incentive effects. We conclude that the correlation between insurance coverage and health care expenditures may be decomposed into the two effects: 75% may be attributed to selection, and 25 % to incentive effects. Moreover, we estimate that a decrease in the coinsurance rate from 100% to 10% increases the marginal demand for health care by about 90% and from 100% to 0% by about 150%. Secondly, having shown that selection and incentive effects exist in the Swiss health insurance market, we present the consequence of this result in the context of risk adjustment. We show that if individuals choose their insurance coverage in function of their health status (selection effect), the optimal compensations should be function of the se- lection and incentive effects. Therefore, a risk adjustment mechanism which ignores these effects, as it is the case presently in Switzerland, will miss his main goal to eliminate incentives for sickness funds to select risks. Using a simplified model, we show that the optimal compensations have to take into account the distribution of risks through the insurance plans in case of self-selection in order to avoid incentives to select risks.Then, we apply our propositions to Swiss data and propose a simple econometric procedure to control for self-selection in the estimation of the risk adjustment formula in order to compute the optimal compensations.

Protein turnover, ureagenesis and gluconeogenesis.

The major processes discussed below are protein turnover (degradation and synthesis), degradation into urea, or conversion into glucose (gluconeogenesis, Figure 1). Daily protein turnover is a dynamic process characterized by a double flux of amino acids: the amino acids released by endogenous (body) protein breakdown can be reutilized and reconverted to protein synthesis, with very little loss. Daily rates of protein turnover in humans (300 to 400 g per day) are largely in excess of the level of protein intake (50 to 80 g per day). A fast growing rate, as in premature babies or in children recovering from malnutrition, leads to a high protein turnover rate and a high protein and energy requirement. Protein metabolism (synthesis and breakdown) is an energy-requiring process, dependent upon endogenous ATP supply. The contribution made by whole-body protein turnover to the resting metabolic rate is important: it represents about 20 % in adults and more in growing children. Metabolism of proteins cannot be disconnected from that of energy since energy balance influences net protein utilization, and since protein intake has an important effect on postprandial thermogenesis - more important than that of fats or carbohydrates. The metabolic need for amino acids is essentially to maintain stores of endogenous tissue proteins within an appropriate range, allowing protein homeostasis to be maintained. Thanks to a dynamic, free amino acid pool, this demand for amino acids can be continuously supplied. The size of the free amino acid pool remains limited and is regulated within narrow limits. The supply of amino acids to cover physiological needs can be derived from 3 sources: 1. Exogenous proteins that release amino acids after digestion and absorption 2. Tissue protein breakdown during protein turnover 3. De novo synthesis, including amino acids (as well as ammonia) derived from the process of urea salvage, following hydrolysis and microflora metabolism in the hind gut. When protein intake surpasses the physiological needs of amino acids, the excess amino acids are disposed of by three major processes: 1. Increased oxidation, with terminal end products such as CO₂ and ammonia 2. Enhanced ureagenesis i. e. synthesis of urea linked to protein oxidation eliminates the nitrogen radical 3. Gluconeogenesis, i. e. de novo synthesis of glucose. Most of the amino groups of the excess amino acids are converted into urea through the urea cycle, whereas their carbon skeletons are transformed into other intermediates, mostly glucose. This is one of the mechanisms, essential for life, developed by the body to maintain blood glucose within a narrow range, (i. e. glucose homeostasis). It includes the process of gluconeogenesis, i. e. de novo synthesis of glucose from non-glycogenic precursors; in particular certain specific amino acids (for example, alanine), as well as glycerol (derived from fat breakdown) and lactate (derived from muscles). The gluconeogenetic pathway progressively takes over when the supply of glucose from exogenous or endogenous sources (glycogenolysis) becomes insufficient. This process becomes vital during periods of metabolic stress, such as starvation.

Employment risk, unemployment insurance and search strategies: a disaggregated equilibrium approach with application to the Swiss labour market in the 1990-ies

The Organization of the Thesis The remainder of the thesis comprises five chapters and a conclusion. The next chapter formalizes the envisioned theory into a tractable model. Section 2.2 presents a formal description of the model economy: the individual heterogeneity, the individual objective, the UI setting, the population dynamics and the equilibrium. The welfare and efficiency criteria for qualifying various equilibrium outcomes are proposed in section 2.3. The fourth section shows how the model-generated information can be computed. Chapter 3 transposes the model from chapter 2 in conditions that enable its use in the analysis of individual labor market strategies and their implications for the labor market equilibrium. In section 3.2 the Swiss labor market data sets, stylized facts, and the UI system are presented. The third section outlines and motivates the parameterization method. In section 3.4 the model's replication ability is evaluated and some aspects of the parameter choice are discussed. Numerical solution issues can be found in the appendix. Chapter 4 examines the determinants of search-strategic behavior in the model economy and its implications for the labor market aggregates. In section 4.2, the unemployment duration distribution is examined and related to search strategies. Section 4.3 shows how the search- strategic behavior is influenced by the UI eligibility and section 4.4 how it is determined by individual heterogeneity. The composition effects generated by search strategies in labor market aggregates are examined in section 4.5. The last section evaluates the model's replication of empirical unemployment escape frequencies reported in Sheldon [67]. Chapter 5 applies the model economy to examine the effects on the labor market equilibrium of shocks to the labor market risk structure, to the deep underlying labor market structure and to the UI setting. Section 5.2 examines the effects of the labor market risk structure on the labor market equilibrium and the labor market strategic behavior. The effects of alterations in the labor market deep economic structural parameters, i.e. individual preferences and production technology, are shown in Section 5.3. Finally, the UI setting impacts on the labor market are studied in Section 5.4. This section also evaluates the role of the UI authority monitoring and the differences in the Way changes in the replacement rate and the UI benefit duration affect the labor market. In chapter 6 the model economy is applied in counterfactual experiments to assess several aspects of the Swiss labor market movements in the nineties. Section 6.2 examines the two equilibria characterizing the Swiss labor market in the nineties, the " growth" equilibrium with a "moderate" UI regime and the "recession" equilibrium with a more "generous" UI. Section 6.3 evaluates the isolated effects of the structural shocks, while the isolated effects of the UI reforms are analyzed in section 6.4. Particular dimensions of the UI reforms, the duration, replacement rate and the tax rate effects, are studied in section 6.5, while labor market equilibria without benefits are evaluated in section 6.6. In section 6.7 the structural and institutional interactions that may act as unemployment amplifiers are discussed in view of the obtained results. A welfare analysis based on individual welfare in different structural and UI settings is presented in the eighth section. Finally, the results are related to more favorable unemployment trends after 1997. The conclusion evaluates the features embodied in the model economy with respect to the resulting model dynamics to derive lessons from the model design." The thesis ends by proposing guidelines for future improvements of the model and directions for further research.

The Political Economy of Active Labor-Market Policy

Active labor-market policies (ALMPs) have developed significantly over the past two decades across Organization for Economic Cooperation and Development (OECD) countries, with substantial cross-national differences in terms of both extent and overall orientation. The objective of this article is to account for cross-national variation in this policy field. It starts by reviewing existing scholarship concerning political, institutional, and ideational determinants of ALMPs. It then argues that ALMP is too broad a category to be used without further specification, and it develops a typology of four different types of ALMPs: incentive reinforcement, employment assistance, occupation, and human capital investment. These are discussed and examined through ALMP expenditure profiles in selected countries. The article uses this typology to analyze ALMP trajectories in six Western European countries and shows that the role of this instrument changes dramatically over time. It concludes that there is little regularity in the political determinants of ALMPs. In contrast, it finds strong institutional and ideational effects, nested in the interaction between the changing economic context and existing labor-market policies.

Calpain 3, the "gatekeeper" of proper sarcomere assembly, turnover and maintenance.

Calpain 3 is a member of the calpain family of calcium-dependent intracellular proteases. Thirteen years ago it was discovered that mutations in calpain 3 (CAPN3) result in an autosomal recessive and progressive form of limb girdle muscular dystrophy called limb girdle muscular dystrophy type 2A. While calpain 3 mRNA is expressed at high levels in muscle and appears to have some role in developmental processes, muscles of patients and mice lacking calpain 3 still form apparently normal muscle during prenatal development; thus, a functional calpain 3 protease is not mandatory for muscle to form in vivo but it is a pre-requisite for muscle to remain healthy. Despite intensive research in this field, the physiological substrates of the calpain 3 protein (hereafter referred to as CAPN3) and its alternatively spliced isoforms remain elusive. The existence of these multiple isoforms complicates the search for the physiological functions of CAPN3 and its pathophysiological role. In this review, we summarize the genetic and biochemical evidence that point to loss of function of the full-length isoform of CAPN3, also known as p94, as the pathogenic isoform. We also argue that its natural substrates must reside in its proximity within the sarcomere where it is stored in an inactive state anchored to titin. We further propose that CAPN3 has many attributes that make it ideally suited as a sensor of sarcomeric integrity and function, involved in its repair and maintenance. Loss of these CAPN3-mediated activities can explain the "progressive" development of muscular dystrophy.

Calpain 3, the "gatekeeper" of proper sarcomere assembly, turnover and maintenance.

Calpain 3 is a member of the calpain family of calcium-dependent intracellular proteases. Thirteen years ago it was discovered that mutations in calpain 3 (CAPN3) result in an autosomal recessive and progressive form of limb girdle muscular dystrophy called limb girdle muscular dystrophy type 2A. While calpain 3 mRNA is expressed at high levels in muscle and appears to have some role in developmental processes, muscles of patients and mice lacking calpain 3 still form apparently normal muscle during prenatal development; thus, a functional calpain 3 protease is not mandatory for muscle to form in vivo but it is a pre-requisite for muscle to remain healthy. Despite intensive research in this field, the physiological substrates of the calpain 3 protein (hereafter referred to as CAPN3) and its alternatively spliced isoforms remain elusive. The existence of these multiple isoforms complicates the search for the physiological functions of CAPN3 and its pathophysiological role. In this review, we summarize the genetic and biochemical evidence that point to loss of function of the full-length isoform of CAPN3, also known as p94, as the pathogenic isoform. We also argue that its natural substrates must reside in its proximity within the sarcomere where it is stored in an inactive state anchored to titin. We further propose that CAPN3 has many attributes that make it ideally suited as a sensor of sarcomeric integrity and function, involved in its repair and maintenance. Loss of these CAPN3-mediated activities can explain the "progressive" development of muscular dystrophy.

Fas and Fas ligand in embryos and adult mice: ligand expression in several immune-privileged tissues and coexpression in adult tissues characterized by apoptotic cell turnover.

The cell surface receptor Fas (FasR, Apo-1, CD95) and its ligand (FasL) are mediators of apoptosis that have been shown to be implicated in the peripheral deletion of autoimmune cells, activation-induced T cell death, and one of the two major cytolytic pathways mediated by CD8+ cytolytic T cells. To gain further understanding of the Fas system., we have analyzed Fas and FasL expression during mouse development and in adult tissues. In developing mouse embryos, from 16.5 d onwards, Fas mRNA is detectable in distinct cell types of the developing sinus, thymus, lung, and liver, whereas FasL expression is restricted to submaxillary gland epithelial cells and the developing nervous system. Significant Fas and FasL expression were observed in several nonlymphoid cell types during embryogenesis, and generally Fas and FasL expression were not localized to characteristic sites of programmed cell death. In the adult mouse, RNase protection analysis revealed very wide expression of both Fas and FasL. Several tissues, including the thymus, lung, spleen, small intestine, large intestine, seminal vesicle, prostate, and uterus, clearly coexpress the two genes. Most tissues constitutively coexpressing Fas and FasL in the adult mouse are characterized by apoptotic cell turnover, and many of those expressing FasL are known to be immune privileged. It may be, therefore, that the Fas system is implicated in both the regulation of physiological cell turnover and the protection of particular tissues against potential lymphocyte-mediated damage.

A Behavioral Account of the Labor Market: The Role of Fairness Concerns

In this paper, we argue that important labor market phenomena can be better understood if one takes (a) the inherent incompleteness and relational nature of most employment contracts and (b) the existence of reference-dependent fairness concerns among a substantial share of the population into account. Theory shows and experiments confirm that, even if fairness concerns were to exert only weak effects in one-shot interactions, repeated interactions greatly magnify the relevance of such concerns on economic outcomes. We also review evidence from laboratory and field experiments examining the role of wages and fairness on effort, derive predictions from our approach for entry-level wages and incumbent workers' wages, confront these predictions with the evidence, and show that reference-dependent fairness concerns may have important consequences for the effects of economic policies such as minimum wage laws.