Ecole des HEC-DEEP
Thèse de doctorat en Sciences Economiques mention "économie politique"

Chantal GRANDCHAMP

Self-Selection and Risk Selection on the Swiss Health Insurance Market

Co-directeurs : Alberto Holly et Pierre-Yves Geoffard
Imprimatur : mars 2006

Abstract
This thesis presents empirical studies in the field of health insurance in Switzerland. First, we investigate the link between health insurance coverage and health care expenditures. Using claims data from a major Swiss Health Insurance Fund, we show that the strong positive correlation between coverage and expenditures is explained by selection effects (due to individual choice of coverage) and incentive effects (ex post moral hazard). Moreover, we show that 75 % may be attributed to selection, and 25 % to incentive effects. We also 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, we present the consequence of the presence of selection and incentive effects 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 selection 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.