Risk adjustment in aging societies

Background In Switzerland, age is the predominant driver of solidarity transfers in risk adjustment (RA). Concerns have been voiced regarding growing imbalances in cost sharing between young and old insured due to demographic changes (larger fraction of elderly >65 years and rise in average age). Particularly young adults aged 19–25 with limited incomes have to shoulder increasing solidarity burdens. Between 1996 and 2011, monthly intergenerational solidarity payments for young adults have doubled from CHF 87 to CHF 182, which corresponds to the highest absolute transfer increase of all age groups. Results By constructing models for age-specific RA growth and for calculating the lifetime sum of RA transfers we investigated the causes and consequences of demographic changes on RA payments. The models suggest that the main driver for RA increases in the past was below average health care expenditure (HCE) growth in young adults, which was only half as high (average 2% per year) compared with older adults (average 4% per year). Shifts in age group distributions were only accountable for 2% of the CHF 95 rise in RA payments. Despite rising risk adjustment debts for young insured the balance of lifetime transfers remains positive as long as HCE growth rates are greater than the discount rate used in this model (3%). Moreover, the life-cycle model predicts that the lifetime rate of return on RA payments may even be further increased by demographic changes. Nevertheless, continued growth of RA contributions may overwhelm vulnerable age groups such as young adults. We therefore propose methods to limit the burden of social health insurance for specific age groups (e.g. young adults in Switzerland) by capping solidarity payments. Conclusions Taken together, our mathematical modelling framework helps to gain a better understanding of how demographic changes interact with risk adjustment and how redistribution of funds between age groups can be controlled without inducing further selection incentives. Those methods can help to construct more equitable systems of health financing in light of population aging.

Sharing evidence of sustainable land management impacts

Ensuring sustainable use of natural resources is crucial for maintaining the basis for our livelihoods. With threats from climate change, disputes over water, biodiversity loss, competing claims on land, and migration increasing worldwide, the demands for sustainable land management (SLM) practices will only increase in the future. For years already, various national and international organizations (GOs, NGOs, donors, research institutes, etc.) have been working on alternative forms of land management. And numerous land users worldwide – especially small farmers – have been testing, adapting, and refining new and better ways of managing land. All too often, however, the resulting SLM knowledge has not been sufficiently evaluated, documented and shared. Among other things, this has often prevented valuable SLM knowledge from being channelled into evidence-based decision-making processes. Indeed, proper knowledge management is crucial for SLM to reach its full potential. Since more than 20 years, the international WOCAT network documents and promotes SLM through its global platform. As a whole, the WOCAT methodology comprises tools for documenting, evaluating, and assessing the impact of SLM practices, as well as for knowledge sharing, analysis and use for decision support in the field, at the planning level, and in scaling up identified good practices. In early 2014, WOCAT’s growth and ongoing improvement culminated in its being officially recognized by the UNCCD as the primary recommended database for SLM best practices. Over the years, the WOCAT network confirmed that SLM helps to prevent desertification, to increase biodiversity, enhance food security and to make people less vulnerable to the effects of climate variability and change. In addi- tion, it plays an important role in mitigating climate change through improving soil organic matter and increasing vegetation cover. In-depth assessments of SLM practices from desertification sites enabled an evaluation of how SLM addresses prevalent dryland threats. The impacts mentioned most were diversified and enhanced production and better management of water and soil degradation, whether through water harvesting, improving soil moisture, or reducing runoff. Among others, favourable local-scale cost-benefit relationships of SLM practices play a crucial role in their adoption. An economic analysis from the WOCAT database showed that land users perceive a large majority of the technologies as having benefits that outweigh costs in the long term. The high investment costs associated with some practices may constitute a barrier to adoption, however, where appropriate, short-term support for land users can help to promote these practices. The increased global concerns on climate change, disaster risks and food security redirect attention to, and trigger more funds for SLM. To provide the necessary evidence-based rationale for investing in SLM and to reinforce expert and land users assessments of SLM impacts, more field research using inter- and transdisciplinary approaches is needed. This includes developing methods to quantify and value ecosystem services, both on-site and off-site, and assess the resilience of SLM practices, as currently aimed at within the EU FP7 projects CASCADE and RECARE.