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.

Epidemic: Responding to America's Prescription Drug Abuse Crisis, 2011

Prescription drug abuse is the Nation’s fastest-growing drug problem. While there has been a marked decrease in the use of some illegal drugs like cocaine, data from the National Survey on Drug Use and Health (NSDUH) show that nearly one-third of people aged 12 and over who used drugs for the first time in 2009 began by using a prescription drug non-medically.1 The same survey found that over 70 percent of people who abused prescription pain relievers got them from friends or relatives, while approximately 5 percent got them from a drug dealer or from the Internet.2 Additionally, the latest Monitoring the Future study—the Nation’s largest survey of drug use among young people—showed that prescription drugs are the second most-abused category of drugs after marijuana.3 In our military, illicit drug use increased from 5 percent to 12 percent among active duty service members over a three-year period from 2005 to 2008, primarily attributed to prescription drug abuse.

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.

Reducing Prescription Drug Abuse in Iowa, January 5, 2011

Prescription drug abuse is the nation’s fastest-growing drug problem, as outlined by the White House Office of National Drug Control Policy’s 2011 national plan “Responding to America’s Prescription Drug Abuse Crisis.” The urgency of the challenge is underscored in other reports, including a recent analysis by the Centers for Disease Control (CDC) that said: “Overdoses involving prescription painkillers are at epidemic levels and now kill more Americans than heroin and cocaine combined.” According to the CDC, more than 40 people die in America every day from overdoses involving narcotic pain relievers such as hydrocodone (Vicodin), oxycodone (Oxycontin), methadone and oxymorphone (Opana). In Iowa, the situation is similar, at least in some ways. Prescription drug abuse is one of the fastest-growing forms of substance abuse in our state too, though its scope is smaller and on a more manageable scale when compared with most other states. The Iowa Department of Public Health, Bureau of Vital Statistics, reports the drug overdose deaths of at least 130 Iowans over the last three years (2008-2010) due to non-heroin opioids (i.e., prescription pain relievers such as oxycodone, hydrocodone and methadone), nearly as many as for the previous eight years combined (149 from 2000-2007).

The Impact of Senate File 169 on Meth Abuse in Iowa A Report to the Legislature by Drug Policy, January 17, 2006

This report is respectfully submitted in satisfaction of the following Senate File 169 requirement, as approved by the 2005 Iowa Legislature: “The Drug Policy Coordinator shall report, in a joint meeting, to the Committee on Judiciary of the Senate and the Committee on Public Safety of the House of Representatives in January 2006 and in January 2007, the effects of this Act on methamphetamine abuse and related criminal activity.” (*Please note that all data contained in this document are preliminary, based on the most recent information available to the Governor’s Office of Drug Control Policy.)

Substance Abuse, Report to the Board of Corrections, 2006

This report, however, goes beyond documentation of the problem. It describes how the Iowa Department of Corrections is addressing substance abuse among the offender population through the provision of treatment, and monitoring for current drug and alcohol usage. All information was obtained from the Iowa Corrections Offender Network (ICON) with many of the reports obtained via the Iowa Justice Data Warehouse.

Community-Based Corrections Substance Abuse Treatment for the Higher Risk Offender, Iowa Department of Corrections Performance Audit Report, September 2007

The performance audit conducted by the Department of Management concerned the licensed substance abuse treatment programs in Department of Corrections’ institutions. This report uses the same methodology, modified for community-based corrections populations, to examine the delivery of substance abuse treatment for higher risk offenders under field supervision, and all offenders who were assigned to community corrections residential facilities.

Review of the Iowa Department of Human Services Drug Testing Process for Drug Testing of a Person Responsible for the Care of a Child in Child Abuse Cases, December 1, 2008

This report outlines the current drug testing practices, guidelines, programs and initiatives as currently implemented by the Department regarding the process for drug testing of a person responsible for the care of a child in child abuse cases.

Testing the bivariate distribution of daily equity returns using copulas: an application to the Spanish stock market

In this paper we deal with the identification of dependencies between time series of equity returns. Marginal distribution functions are assumed to be known, and a bivariate chi-square test of fit is applied in a fully parametric copula approach. Several families of copulas are fitted and compared with Spanish stock market data. The results show that the t-copula generally outperforms other dependence structures, and highlight the difficulty in adjusting a significant number of bivariate data series

Single-valued solutions for the Böhm-Bawerk horse market game

Single-valued solutions for the case of two-sided market games without product differentiation, also known as Böhm-Bawerk horse market games, are analyzed. The nucleolus is proved to coincide with the tau-value, and is thus the midpoint of the core. Moreover a characterization of this setof games in terms of the assignment matrix is provided.