To equalize differences in health plan premiums due to differences in risk pools, the German legislature introduced a simple Risk Adjustment Scheme (RAS) based on age, gender and disability status in 1994. In addition, effective 1996, consumers gained the freedom to choose among hundreds of...

Using a randomized field experiment, we show that health care specialists cream-skim patients by their expected profitability. In the German two-tier system, outpatient reimbursement rates for both public and private insurance are centrally determined but are more than twice as high for the...

Medical providers often have a significant influence on treatment decisions which they can use in their own financial interest. Classical models of supplier-induced demand predict that medical providers will supply fewer services if they face increasing prices. We test this prediction based on a...