Market failure in long-term private health insurance markets: a proposed solution

Recently, private health insurance rates have declined in many countries. In places requiring community rating in their health insurance premiums, a major cause is age-based adverse selection. However, even in countries without community rating, a de facto type of partial community rating tends to occur. In this note, a modified version of Pauly et al.'s guaranteed renewability model, which addresses the problem of age-based adverse selection (Pauly et al., 1995) is presented. Their model is extended from three to 35 periods. Also, probabilities are allowed to increase by age for low-risk types using actual age-based probabilities. This extension of their work shows that private health insurance contracts available stray far from optimal contracts that deal with age-based adverse selection. This suggests that government actions to affect private insurance options are warranted.

Lifetime cover in private insurance markets

In the last few decades, private health insurance rates have declined in many countries. In countries and states with community rating, a major cause is adverse selection. In order to address age-based adverse selection, Australia has recently begun a novel approach which imposes stiff penalties for buying private insurance later in life, when expected costs are higher. In this paper, we analyze Australiarsquos Lifetime Cover in the context of a modified version of the Rothschild-Stiglitz insurance model (Rothschild and Stiglitz, 1976). We allow empirically-based probabilities to increase by age for low-risk types. The model highlights the shortcomings of the Australian plan. Based on empirically-based probabilities of illness, we predict that Lifetime Cover will not arrest adverse selection. The model has many policy implications for government regulation encouraging long-term health coverage.

Public and private psychiatry: Can they work together and is it worth the effort?

Objective: Partnerships in mental health care, particularly between public and private psychiatric services, are being increasingly recognized as important for optimizing patient management and the efficient organization of services. However, public sector mental health services and private psychiatrists do not always work well together and there seem to be a number of barriers to effective collaboration. This study set out to investigate the extent of collaborative 'shared care' arrangements between a public mental health service and private psychiatrists practising nearby. It also examined possible barriers to collaboration and some possible solutions to the identified problems. Method: A questionnaire examining the above factors was sent to all public sector mental health clinicians and all private psychiatrists in the area. Results: One hundred and five of the 154 (68.2%) public sector clinicians and 103 of the 194 (53.1%) private psychiatrists returned surveys. The main barriers to successful collaboration identified by members of both sectors were: 'Difficulty communicating' endorsed by 71.4% of public clinicians and 72% of private psychiatrists, 'Confusion of roles and responsibilities' endorsed by 62.9% and 66%, respectively, and 'Different treatment approach' by 47.6% and 45.6%, respectively. Over 60% of private psychiatrists identified problems with access to the public system as a barrier to successful shared care arrangements. It also emerged, as hypothesized, that the public and private systems tend to manage different patient populations and that public clinicians in particular are not fully aware of the private psychiatrists' range of expertise. This would result in fewer referrals for shared care across the sectors. Conclusions: A number of barriers to public sector clinicians and private psychiatrists collaborating in shared care arrangements were identified. The two groups surveyed identified similar barriers. Some of these can potentially be addressed by changes to service systems. Others require cultural shifts in both sectors. Improved communications including more opportunities for formal and informal meetings between people working in the two sectors would be likely to improve the understanding of the complementary sector's perspective and practice. Further changes would be expected to require careful work between the sectors on training, employment and practice protocols and initiatives, to allow better use of the existing services and resources.

Remunerating private psychiatrists for participating in case conferences

ABSTRACT : BACKGROUND : On 1 November 2000, a series of new item numbers was added to the Medicare Benefits Schedule, which allowed for case conferences between physicians (including psychiatrists) and other multidisciplinary providers. On 1 November 2002, an additional set of numbers was added, designed especially for use by psychiatrists. This paper reports the findings of an evaluation of these item numbers. RESULTS : The uptake of the item numbers in the three years post their introduction was low to moderate at best. Eighty nine psychiatrists rendered 479 case conferences at a cost to the Health Insurance Commission of $70,584. Psychiatrists who have used the item numbers are generally positive about them, as are consumers. Psychiatrists who have not used them have generally not done so because of a lack of knowledge, rather than direct opposition. The use of the item numbers is increasing over time, perhaps as psychiatrists become more aware of their existence and of their utility in maximising quality of care. CONCLUSION : The case conferencing item numbers have potential, but as yet this potential is not being realised. Some small changes to the conditions associated with the use of the item numbers could assist their uptake.

Economic Incentives to Conserve Wildlife on Private Lands: Analysis and Policy

Some believe that provision of private property rights in wildlife on private land provides a powerful economic incentive for nature conservation because it enables property owners to market such wildlife or its attributes. If such marketing is profitable, private landholders will conserve the wildlife concerned and its required habitat. But land is not always most profitably used for exploitation of wildlife, and many economic values of wildlife (such as non-use economic values) cannot be marketed. The mobility of some wildlife adds to the limitations of the private-property approach. While some species may be conserved by this approach, it is suboptimal as a single policy approach to nature conservation. Nevertheless, it is being experimented with, in the Northern Territory of Australia where landholders had a possibility of harvesting on their properties a quota of eggs and chicks of red-tailed black cockatoos for commercial sale. This scheme was expected to provide an incentive to private landholders to retain hollow trees essential for the nesting of these birds but failed. This case and others are analysed. Despite private-property failures, the long-term survival of some wildlife species depends on their ability to use private lands without severe harassment, either for their migration or to supplement their available resources, for example, the Asian elephant. Nature conservation on private land is often a useful, if not essential, supplement to conservation on public lands. Community and public incentives for such conservation are outlined.

The development of research supervision: 'Turning the light on private space'

Educational development for research supervisors is still a recent phenomenon. Early optional sessions on research supervision have now been replaced, particularly in the UK, continental Europe, and Australasia, by comprehensive and, in some cases, mandatory programs. Yet some of these programs focus solely on the administrative roles and responsibilities of supervisors, attempting to provide technical “fixes” that deny the genuine difficulties and complexities involved in supervision relationships. Some research supervisors resent the intrusion of educational developers into what many of them have regarded as a private pedagogical space. They interpret such programs as further instances of the quality assurance agendas of governments and university administrators, and are justifiably suspicious of what some describe as the colonial underpinnings of educational development. These reactions create tensions for educational developers. This article explores why educational development can be problematic for research supervisors. It then charts some current supervision educational development programs that seek to go beyond administrative interpretations of supervision. Finally, it examines whether the “Compassionate Rigour” supervision program, developed to address these difficulties, manages to respond respectfully and sensitively to supervisors’ educational development needs.

Attitude change and the public-private attitude distinction

In this paper, we highlight the importance of the distinction between public and private attitudes in research on attitude change. First, we clarify the definitions of public and private attitudes by locating the researcher as a potential source of influence. In a test of this definition, we compare participant reports of potentially embarrassing behaviour and the study's importance between participants responding when a researcher has potential access to their reports (public condition), and participants whose reports the researcher has no potential access to (private condition). Participants high in public self-focus or low in defensive self-presentation reported the study to be more important in the public condition than the private condition. Further, participants in the public condition reported less frequency of engaging in embarrassing behaviours than those in the private condition, an effect not moderated by individual differences. We conclude that the public-private distinction is an essential element in attitude change theory.

Lifetime Subsidies in Australian Private Health Insurance Markets with Community Rating

This paper considers the problem of inducing low-risk individuals of all ages to buy private health insurance in Australia. Our proposed subsidy scheme improves upon the age-based penalty scheme under the current "Australian Lifetime Cover" (LTC) scheme. We generate an alternative subsidy profile that obviates adverse selection in private health insurance markets with mandated, age-based, community rating. Our proposal is novel in that we generate subsidies that are both risk- and age-specific, based upon actual risk probabilities. The approach we take may prove useful in other jurisdictions where the extant law mandates community rating in private health insurance markets. Furthermore, our approach is useful in jurisdictions that seek to maintain private insurance to complement existing universal public systems.