Measuring Preferences for the Provision of Health - A Tale of Two Countries

In an attempt to curb the continuing surge in health care expenditure, many governments either mandate or encourage managed care (MC) plans in health insurance. Since MC plans limit patient choice with regard to physicians, hospitals, drugs, and other dimensions of health care, a natural question to ask is how much compensation would have to be offered to the insured for them to accept these restrictions. In principle, this can be inferred once these MC plans are marketed; however, in many countries these innovations are still being debated. In this situation, experimental evidence is valuable. This contribution compares experimental evidence of the discrete choice type concerning preferences for health insurance and health care settings in two countries, Germany and the Netherlands. Since Dutch citizens had to explicitly choose their health insurance contract in the wake of the reform of 2006, a set of predictions can be derived. Their status quo bias should be lower, since they had already borne a good deal of information cost when the market experiments were performed. For the same reason, estimates of willingness to pay and compensation asked for changes should be more precise than in the case of Germany, where there had been a prolonged policy debate but no real reform. No comparative prediction is possible with regard to preference heterogeneity except that it exists in both countries. The outcome of the econometric analysis concerning these predictions will be reported and conclusion for policy drawn