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This contribution has three objectives. First, it seeks to justify the use of the economic criterion, “Provision of health care in accordance with the preferences of current and potential patients” for guiding decisions concerning the adoption of costly innovation in health. Next, it proposes the measurement of these preferences in the guise of willingness to pay (WTP) values through Discrete Choice Experiments (DCEs). Third, it purports to examine two popular arguments against accepting lay persons´ preferences, viz. that they are unwilling or unable to express preferences with regard to health and health care, and that their preferences are unstable, depending on the current state of health. Both of these arguments are refuted by the findings of four DCEs designed to measure WTP for attributes of health insurance and of the treatment of diabetes, respectively [Zweifel in J Regul Econ 29(3): 319–332, 2006; MacNeil Vrooman and Zweifel in Eur J Health Econ 12(1): 87–95, 2011; Sennhauser and Zweifel in: Jakovlijevic M (ed.), Health Economics and Policy Challenges in Global Emerging Markets. NOVA Publishers, Hauppauge NY, 2016].

The point of departure of this Editorial is the fact that we all are engaged in self-rationing in our everyday lives. We would like to spend more money on all sorts of nice things and devote more time to our cherished activities. Imposed rationing is characteristic of wartime governments, who seek to prevent the rich from gobbling up the resources left by the army. Since the publication in 1987 of David Callahan's Setting Limits: Medical Goals in an Aging Society (Callahan, Setting limits: medical goals in an aging society, Simon & Schuster, New York, 1987), rationing of health care has become a widely debated issue (the Internet is full of pertinent entries). While rationing has also been addressed by health economists, there are three puzzling observations. First, Callahan (Callahan, Setting limits: medical goals in an aging society, Simon & Schuster, New York, 1987) wrote for an American audience whereas rationing was introduced by the British National Health Service (NHS) well before 1987, with little debate. Second, the economic theory of rationing had been laid out by James Tobin [Ectrica 20(4): 521-533, 1952] as early as 1952—but health economists seem to have neglected his groundwork when writing about rationing. Third, they accept government-imposed rationing as inevitable in the case of health care, as though the self-rationing alternative was unavailable. An attempt is made here to provide rational explanations for these puzzles.

This contribution evokes Orio Giarini’s courage to think ‘outside the box’. It proposes a practical way to bridge the gap between risk (where probabilities of occurrence are fully known) and uncertainty (where these probabilities are unknown). However, in the context of insurance, neither extreme applies: the risk type of a newly enrolled customer is not fully known, loss distributions (especially their tails) are difficult to estimate with sufficient precision, the diversification properties of a block of policies acquired from another company can be assessed only to an approximation, and rates of return on investment depend on decisions of central banks that cannot be predicted too well. This contribution revolves around the launch of an innovative insurance product, where the company has a notion of whether a favourable market reception is more likely than an unfavourable one, of the chance of obtaining approval from the regulatory authority and the risk of a competitor launching a similar innovation. Linear partial information theory is proposed and applied as a particular practical way to systematically exploit the imprecise information that may exist for all of these aspects. The decision-making criterion is maxEmin, an intuitive modification of the maximin rule known from games against nature.

Since the 2017 Nobel Prize in Physics was awarded for the observation of gravitational waves, it is fair to say that the epoch of gravitational wave astronomy (GWs) has begun. However, a number of interesting sources of GWs can only be observed from space. To demonstrate the feasibility of the Laser Interferometer Space Antenna (LISA), a future gravitational wave observatory in space, the LISA Pathfinder satellite was launched on December, 3rd 2015. Measurements of the spurious forces accelerating an otherwise free-falling test mass, and detailed investigations of the individual subsystems needed to achieve the free-fall, have been conducted throughout the mission. This overview article starts with the purpose and aim of the mission, explains satellite hardware and mission operations and ends with a summary of selected important results and an outlook towards LISA. From the LISA Pathfinder experience, we can conclude that the proposed LISA mission is feasible., Comment: Preprint of an article submitted for consideration in Lepton-Photon 2017 conference proceedings \copyright 2019 copyright World Scientific Publishing Company

Since the 2017 Nobel Prize in Physics was awarded for the observation of gravitational waves, it is fair to say that the epoch of gravitational wave astronomy (GWs) has begun. However, a number of interesting sources of GWs can only be observed from space. To demonstrate the feasibility of the Laser Interferometer Space Antenna (LISA), a future gravitational wave observatory in space, the LISA Pathfinder satellite was launched on December, 3rd 2015. Measurements of the spurious forces accelerating an otherwise free-falling test mass, and detailed investigations of the individual subsystems needed to achieve the free-fall, have been conducted throughout the mission. This overview article starts with the purpose and aim of the mission, explains satellite hardware and mission operations and ends with a summary of selected important results and an outlook towards LISA. From the LISA Pathfinder experience, we can conclude that the proposed LISA mission is feasible., Comment: Preprint of an article submitted for consideration in Lepton-Photon 2017 conference proceedings \copyright 2019 copyright World Scientific Publishing Company

InSight is the first planetary mission with a seismometer package, SEIS, since the Apollo Lunar Surface Experiments Package. SEIS is complimented by APSS, which has as a goal to document the atmospheric source of seismic noise and signals. Since June 2019, SEIS has been delivering 6 axis 20 sps continuous seismic data, a rate one order of magnitude larger originally planned. More than 50 events have been detected by the end of July 2019 but only three have amplitudes significantly above the SEIS instrument requirement. Two have clear and coherent arrivals of P and S waves, enabling location, diffusion/attenuation characterization and receiver function analysis. The event¿s magnitudes are likely ¿ 3 and no clear surface waves nor deep interior phases have been identified. This suggests deep events with scattering along their final propagation paths and with large propagation differences as compared to Earth and Moon quakes. Most of the event¿s detections are made possible due to the very low noise achieved by the instrument installation strategy and the very low VBB self-noise. Most of the SEIS signals have amplitudes of spectral densities in the 0.03-5Hz frequency bandwidth ranging from 10-10 m/s2/Hz1/2 to 5 10-9 m/s2/Hz1/2. The smallest noise levels occurs during the early night, with angstrom displacements or nano-radian tilts. This monitors the elastic and seismic interaction of a planetary surface with its atmosphere, illustrated not only by a wide range of SEIS signals correlated with pressure vortexes, dust devils or wind activity but also by modulation of resonances above 1 Hz, amplified by ultra-low velocity surface layers. After about one half of a Martian year, clear seasonal changes appear also in the noise, which will be discussed. One year after landing, the seismic noise is therefore better and better understood, and noise correction techniques begun to be implemented, either thanks to the APSS wind and pressure sensors, or by SEIS only data processing

Publicly provided long-term care (LTC) insurance with means-tested benefits is suspected to crowd out either private LTC insurance (Brown and Finkelstein 2008. The Interaction of Public and Private Insurance: Medicaid and the Long-Term Care Insurance Market. American Economic Review 98(3):1083-102), private saving (Gruber and Yelowitz 1999. Public Health Insurance and Private Saving. Journal of Political Economy 107(6):1249-74; Sloan and Norton 1997. Adverse Selection, Bequests, Crowding Out, and Private Demand for Insurance: Evidence from the Long-term Care Insurance Market. Journal of Risk and Uncertainty 15:201-19), or informal care (Pauly 1990. The Rational Non-purchase of Long-term Care Insurance. Journal of Political Economy 95:153-68; Zweifel and Strüwe 1998. Long-term Care Insurance in a Two-generation Model. Journal of Risk and Insurance 65(1):13-32). This contribution predicts crowding-out effects for both private LTC insurance and informal care on the one hand and private saving and informal care on the other. These effects result from the interaction of a parent who decides about private LTC insurance before retirement and the amount of saving in retirement and a caregiver who decides about effort devoted to informal care. Some of the predictions are tested using a recent survey from China.

The science operations of the LISA Pathfinder mission have demonstrated the feasibility of sub-femto-g free fall of macroscopic test masses necessary to build a gravitational wave observatory in space such as LISA. While the main focus of interest, i.e., the optical axis or the x-axis, has been extensively studied, it is also of great importance to evaluate the stability of the spacecraft with respect to all the other degrees of freedom (d.o.f.). The current paper is dedicated to such a study: the exhaustive and quantitative evaluation of the imperfections and dynamical effects that impact the stability with respect to its local geodesic. A model of the complete closed-loop system provides a comprehensive understanding of each component of the in-loop coordinates spectral density. As will be presented, this model gives very good agreement with LISA Pathfinder flight data. It allows one to identify the noise source at the origin and the physical phenomena underlying the couplings. From this, the stability performance of the spacecraft with respect to its geodesic is extracted as a function of frequency. Close to 1 mHz, the stability of the spacecraft on the $X_{SC}$, $Y_{SC}$ and $Z_{SC}$ d.o.f. is shown to be of the order of $5.0$ $\times$ $10^{−15}$ $m$ $s^{−2}$ $Hz^{−1/2}$ for X, $6.0$ $\times$ $10^{−14}$ $m$ $s^{−2}$ $Hz^{−1/2}$ for Y, and $4.0$ $\times$ $10^{−14}$ $m$ $s^{−2}$ $Hz^{−1/2}$ for Z. For the angular d.o.f., the values are of the order of $3$ $\times$ $10^{−12}$ $rad$ $s^{−2}$ $Hz^{−1/2}$ for $\Theta_{SC}$, $5$ $\times$ $10^{−13}$ $rad$ $s^{−2}$ $Hz^{−1/2}$ for $H_{SC}$, and $3$ $\times$ $10^{−13}$ $rad$ $s^{−2}$ $Hz^{−1/2}$ for $\Phi_{SC}$. Below 1 mHz, however, the stability performances are worsened significantly by the effect of the star tracker noise on the closed-loop system. It is worth noting that LISA is expected to be spared from such concerns, as differential wave-front sensing, an attitude sensor system of much higher precision, will be u

The science operations of the LISA Pathfinder mission has demonstrated the feasibility of sub-femto-g free-fall of macroscopic test masses necessary to build a LISA-like gravitational wave observatory in space. While the main focus of interest, i.e. the optical axis or the $x$-axis, has been extensively studied, it is also of interest to evaluate the stability of the spacecraft with respect to all the other degrees of freedom. The current paper is dedicated to such a study, with a focus set on an exhaustive and quantitative evaluation of the imperfections and dynamical effects that impact the stability with respect to its local geodesic. A model of the complete closed-loop system provides a comprehensive understanding of each part of the in-loop coordinates spectra. As will be presented, this model gives very good agreements with LISA Pathfinder flight data. It allows one to identify the physical noise source at the origin and the physical phenomena underlying the couplings. From this, the performances of the stability of the spacecraft, with respect to its geodesic, are extracted as a function of frequency. Close to $1 mHz$, the stability of the spacecraft on the $X_{SC}$, $Y_{SC}$ and $Z_{SC}$ degrees of freedom is shown to be of the order of $5.0\ 10^{-15} m\ s^{-2}/\sqrt{Hz}$ for X and $4.0 \ 10^{-14} m\ s^{-2}/\sqrt{Hz}$ for Y and Z. For the angular degrees of freedom, the values are of the order $3\ 10^{-12} rad\ s^{-2}/\sqrt{Hz}$ for $\Theta_{SC}$ and $3\ 10^{-13} rad\ s^{-2}/\sqrt{Hz}$ for $H_{SC}$ and $\Phi_{SC}$., Comment: 16 pages, 10 figures

The science operations of the LISA Pathfinder mission has demonstrated the feasibility of sub-femto-g free-fall of macroscopic test masses necessary to build a LISA-like gravitational wave observatory in space. While the main focus of interest, i.e. the optical axis or the $x$-axis, has been extensively studied, it is also of interest to evaluate the stability of the spacecraft with respect to all the other degrees of freedom. The current paper is dedicated to such a study, with a focus set on an exhaustive and quantitative evaluation of the imperfections and dynamical effects that impact the stability with respect to its local geodesic. A model of the complete closed-loop system provides a comprehensive understanding of each part of the in-loop coordinates spectra. As will be presented, this model gives very good agreements with LISA Pathfinder flight data. It allows one to identify the physical noise source at the origin and the physical phenomena underlying the couplings. From this, the performances of the stability of the spacecraft, with respect to its geodesic, are extracted as a function of frequency. Close to $1 mHz$, the stability of the spacecraft on the $X_{SC}$, $Y_{SC}$ and $Z_{SC}$ degrees of freedom is shown to be of the order of $5.0\ 10^{-15} m\ s^{-2}/\sqrt{Hz}$ for X and $4.0 \ 10^{-14} m\ s^{-2}/\sqrt{Hz}$ for Y and Z. For the angular degrees of freedom, the values are of the order $3\ 10^{-12} rad\ s^{-2}/\sqrt{Hz}$ for $\Theta_{SC}$ and $3\ 10^{-13} rad\ s^{-2}/\sqrt{Hz}$ for $H_{SC}$ and $\Phi_{SC}$., Comment: 16 pages, 10 figures

An important source of conflict surrounding nuclear energy is that with a very small probability, a large-scale nuclear accident may occur. One way to internalize the associated financial risks is through mandating nuclear operators to have liability insurance. This paper presents estimates of consumers' willingness to pay for increased financial security provided by an extension of coverage, based on the 'stated choice' approach. A Swiss citizen with median characteristics may be willing to pay 0.14 US cents per kwh to increase coverage beyond the current CHF 0.7 billion (bn.) (US$ 0.47 bn.). Marginal willingness to pay declines with higher coverage but exceeds marginal cost at least up to CHF 4 bn.(US$ 2.7 bn.). An extension of nuclear liability insurance coverage therefore may be efficiency-enhancing

Zusammenfassung: Das Ziel dieser Arbeit besteht in der Untersuchung der Skaleneffizienz von Gebietskörperschaften (Kantonen) in der Schweiz. Dazu dient eine Data Envelopment Analysis für den Untersuchungszeitraum von 2000 bis 2004. Als Output werden aggregierte Outputindikatoren von vier öffentlichen Aktivitäten (Verwaltung, Bildung, Gesundheit, Verkehr) verwendet, um für die 26 Kantone technische Effizienzwerte und Skaleneffizienzwerte zu bestimmen. Die Resultate lassen vermuten, dass die Kantone in den vier untersuchten Aktivitäten keine Skalenerträge aufweisen. Dies widerspricht dem aktuellen Trend zugunsten einer Zentralisierung öffentlicher Aufgaben und spricht für die Möglichkeit, mittels Tiebout-Wettbewerb zwischen den Schweizer Kantonen die Wohlfahrt der Bürger zu verbessern

This contribution seeks to measure preferences for health insurance of individuals with and without chronic conditions in two countries, Germany and the Netherlands. The objective is to test the presumption that preferences between these two subpopulations differ and to see whether having a chronic condition has a different influence on preferences depending on the country. The evidence comes from two Discrete Choice Experiments performed in 2005 (Germany) and 2006 (the Netherlands, right after a major health reform). Results point to an even more marked resistance against restrictions of physician choice among individuals with chronic conditions in both countries. Thus, the alleged beneficiaries of Disease Management Programs would have to be highly compensated for accepting the restrictions that go with them

This article seeks to assess whether physician payment reforms in the United States and Switzerland were likely to attain their objectives. We first introduce basic contract theory, with the organizing principle being the degree of information asymmetry between the patient and the health care provider. Depending on the degree of information asymmetry, different forms of payment induce "appropriate” behavior. These theoretical results are then pitted against the RBRVS of the United States to find that a number of its aspects are not optimal. We then turn to Switzerland's Tarmed and find that it fails to conform with the prescriptions of economic contract theory as well. The article closes with a review of possible reforms that could do away with uniform fee schedules to improve the performance of the health care system

Policy makers around the world seek to encourage generic substitution. In this paper, the importance of prescribing physicians' imperfect agency is tested using the fact that some Swiss jurisdictions allow physicians to dispense drugs on their own account (physician dispensing, PD) while others disallow it. We estimate a model of physician drug choice with the help of drug claim data, finding a significant positive association between PD and the use of generics. While this points to imperfect agency, generics are prescribed more often to patients with high copayments or low incomes

Health care may be similar to Sisyphus work: When the task is about to be completed, work has to start all over again. To see the analogy, consider an initial decision to allocate more resources to health. The likely consequence is an increased number of survivors, who will exert additional demand for health care. With more resources allocated to health, the cycle starts over again. The objective of this paper is to improve on earlier research that failed to find evidence of a Sisyphus syndrome in industrialized countries. This time, there are signs of such a cycle, which however seems to have faded away recently

This editorial presents a critical review of the health model pioneered by Michael Grossman (MGM) in 1972 [8]. It argues that whereas the MGM has great charm for economists, it fails to achieve acceptance by interested laypersons and policy makers. The main reasons for this failure are: (1) the assumption of a long and fixed planning horizon, (2) a fixed ratio between individuals healthcare expenditure and the cost of their own health-enhancing efforts regardless of their state of health, and (3) their presumed ability to restore the state of health deemed optimal at a speed that does not depend on their state of health. An alternative formulation emphasizing the stochastic nature of health production is sketched that conceptually provides solutions to these three problems. In addition, it permits discarding a popular medical argument that seems to undermine the very basis of welfare analysis applied to health by claiming preferences to be unstable: "As long as you are healthy, you don't give a damn, but as soon as you are sick, you are prepared to sacrifice everything to restore your health.” The editorial concludes by outlining a research program that may help health economists break away from their MGM fixation

Zusammenfassung: In dieser Studie werden effiziente Portfolien nach Markowitz für die USA und der Schweiz berechnet. Dabei wird die Sicht eines Investors (für den die Rendite der Veränderung der gewonnen kWh/USD entspricht) der Sicht des laufenden Benutzers (für den die Rendite den kWh/USD selbst entspricht) gegenübergestellt. De zwischen den Schocks, die auf die Stromerzeugungskosten einwirken, Korrelationen bestehen, wird das SURE (Seemingly Unrelated Regression Estimation) Verfahren angewendet, um eine über die Zeit stabile Kovarianzmatrix zu erhalten. Das tatsächliche Technologieportfolio der USA liegt dichter an der Effizienzgrenze als dasjenige der Schweiz. Ein möglicher Grund hierfür ist die Energiemarktliberalisierung, die in den USA deutlich weiter vorangeschritten ist als in der Schweiz

Regulation fostering Managed Care alternatives in health insurance is spreading. This work reports on an experiment designed to measure the amounts of compensation asked by the Swiss population (in terms of reduced premiums) for Managed-Care type restrictions in the provision of health care. It finds that restrictions on the freedom of physician choice would require an average compensation of more than one-third of the premium, while generic substitution even meets with a small willingness to pay. Marked preference heterogeneity is an argument against regulation imposing uniformity of contract in Swiss social health insurance

Conventional wisdom views demographic change as aset of exogenous shocks impinging on social security, with the economy treated as aclosed system. This contribution argues that demographics is nothing but the aggregate of individual decisions, which are influenced by social security. This claim is supported by both theoretical argument and empirical evidence with regard to decisions over the life cycle, ranging from educational effort, marriage, number of children, divorce, retirement, and effort to extend one's life. Distinguishing the effects of contributions and benefits of social security, these feedback relationships are shown to in the main hamper employment and growth, thus undermining the financial viability of today's social security schemes, with increasing openness of the economy ('sglobalization') exacerbating problems

Managed care (MC) imposes restrictions on physician behavior, but also holds promises, especially in terms of cost savings and improvements in treatment quality. This contribution reports on private-practice physicians' willingness to accept (WTA, compensation asked, respectively) for several MC features. In 2011, 1,088 Swiss ambulatory care physicians participated in a discrete choice experiment, which permits putting WTA values on MC attributes. With the exception of shared decision making and up to six quality circle meetings per year, all attributes are associated with non-zero WTA values. Thus, health insurers must be able to achieve substantial savings in order to create sufficient incentives for Swiss physicians to participate voluntarily in MC plans

Zusammenfassung: Dieser Beitrag nennt die sog. adverse Selektion als zentralen Grund dafür, dass die Mehrheit der Ökonomen das Übergewicht der Sozialversicherung (SV) gegenüber der Privatversicherung (PV) auf einen Effizienzvorteil der SV zurückführt. Er nennt jedoch auch Effizienznachteile der SV, die in ihrer vergleichsweise beschränkten Fähigkeit liegen, dem moralischen Risiko wirksam zu begegnen. Es zeichnen sich drei zukünftige Herausforderungen sowohl an die PV und die SV ab, denen die PV (und insbesondere die PKV) eher besser als die SV (und die GKV) begegnen kann - allerdings unter der entscheidenden Bedingung, dass sie die Produktinnovation vorantreibt

Following the selection of The Gravitational Universe by ESA, and the successful flight of LISA Pathfinder, the LISA Consortium now proposes a 4 year mission in response to ESA's call for missions for L3. The observatory will be based on three arms with six active laser links, between three identical spacecraft in a triangular formation separated by 2.5 million km. LISA is an all-sky monitor and will offer a wide view of a dynamic cosmos using Gravitational Waves as new and unique messengers to unveil The Gravitational Universe. It provides the closest ever view of the infant Universe at TeV energy scales, has known sources in the form of verification binaries in the Milky Way, and can probe the entire Universe, from its smallest scales near the horizons of black holes, all the way to cosmological scales. The LISA mission will scan the entire sky as it follows behind the Earth in its orbit, obtaining both polarisations of the Gravitational Waves simultaneously, and will measure source parameters with astrophysically relevant sensitivity in a band from below $10^{-4}\,$Hz to above $10^{-1}\,$Hz., Comment: Submitted to ESA on January 13th in response to the call for missions for the L3 slot in the Cosmic Vision Programme

This contribution seeks to answer two questions, (1) What are the reasons for a demand for social health insurance (SHI)?, and (2) What are the limits to the growth of SHI? A review of the reasons for the existence of SHI reveals that while economists have emphasized the possible contribution of SHI to efficiency, the available evidence points to public choice reasons, which also seem to explain better the growth of SHI. Indeed, since private insurance redistributes as well (albeit governed by chance), it is tempting for politicians to use SHI for systematic redistribution (the extent of which cannot easily be detected by net payers). Turning to the supply of SHI, two dimensions are studied in some detail, viz. efforts at product innovation and at risk selection. Competing suppliers of SHI, while hampered by risk adjustment which sanctions innovators for attracting the young, are predicted to invest in innovation. A monopolistic public SHI scheme, by way of contrast, does not need to select risks and, on the other hand, it is predicted to refrain from product innovation. This is but one limit to the growth of SHI; the ultimate one is citizens' lack of willingness to pay for its continuing expansion, about which some evidence for the case of Switzerland is presented

Following the selection of The Gravitational Universe by ESA, and the successful flight of LISA Pathfinder, the LISA Consortium now proposes a 4 year mission in response to ESA's call for missions for L3. The observatory will be based on three arms with six active laser links, between three identical spacecraft in a triangular formation separated by 2.5 million km. LISA is an all-sky monitor and will offer a wide view of a dynamic cosmos using Gravitational Waves as new and unique messengers to unveil The Gravitational Universe. It provides the closest ever view of the infant Universe at TeV energy scales, has known sources in the form of verification binaries in the Milky Way, and can probe the entire Universe, from its smallest scales near the horizons of black holes, all the way to cosmological scales. The LISA mission will scan the entire sky as it follows behind the Earth in its orbit, obtaining both polarisations of the Gravitational Waves simultaneously, and will measure source parameters with astrophysically relevant sensitivity in a band from below $10^{-4}\,$Hz to above $10^{-1}\,$Hz., Comment: Submitted to ESA on January 13th in response to the call for missions for the L3 slot in the Cosmic Vision Programme

This contribution shows that for certain classes of insurance risks, pricing can be based on expected values under a probability measure ℙ* amounting to quasi risk-neutral pricing. This probability measure is unique and optimal in the sense of minimizing the relative entropy with respect to the actuarial probability measure ℙ, which is a common approach in the case of incomplete markets. After expounding the key elements of this theory, an application to a set of industrial property risks is developed, assuming that the severity of losses can be modeled by "Swiss Re Exposure Curves”, as discussed by Bernegger (1997). These curves belong to a parametric family of distribution functions commonly used by pricing actuaries. The quasi risk-neutral pricing approach not only yields risk exposure specific premiums but also Risk Adjusted Capital (RAC) values on the very same level of granularity. By way of contrast, the conventional determination of RAC is typically considered on a portfolio level only

The impact of aging on healthcare expenditure (HCE) has been at the center of a prolonged debate. This paper purports to shed light on several issues of this debate by presenting new evidence on the "red herring" hypothesis advanced by Zweifel, Felder and Meier (1999). This hypothesis amounts to distinguishing a mortality from a morbidity component in healthcare expenditure (HCE) and claiming that failure to make this distinction results in excessive estimates of future growth of HCE. A re-estimation based on a much larger data set is performed, using the refined econometric methodology. The main contribution is consistency, however. Rather than treating the mortality component as a residual in forecasting, its dynamics are analyzed in the same detail as that of the morbidity component when predicting the impact of population aging on the future growth of HCE. For the case of Switzerland, it finds this impact to be relatively small regardless of whether or not the mortality component is accounted for, thus qualifying the "red herring" hypothesis

This contribution seeks to answer two questions, (1) What are the reasons for a demand for social health insurance (SHI)?, and (2) What are the limits to the growth of SHI? A review of the reasons for the existence of SHI reveals that while economists have emphasized the possible contribution of SHI to efficiency, the available evidence points to public choice reasons, which also seem to explain better the growth of SHI. Indeed, since private insurance redistributes as well (albeit governed by chance), it is tempting for politicians to use SHI for systematic redistribution (the extent of which cannot easily be detected by net payers). Turning to the supply of SHI, two dimensions are studied in some detail, viz. efforts at product innovation and at risk selection. Competing suppliers of SHI, while hampered by risk adjustment which sanctions innovators for attracting the young, are predicted to invest in innovation. A monopolistic public SHI scheme, by way of contrast, does not need to select risks and, on the other hand, it is predicted to refrain from product innovation. This is but one limit to the growth of SHI; the ultimate one is citizens' lack of willingness to pay for its continuing expansion, about which some evidence for the case of Switzerland is presented

Publicly provided long-term care (LTC) insurance with means-tested benefits is suspected to crowd out either private LTC insurance (Brown and Finkelstein 2008. The Interaction of Public and Private Insurance: Medicaid and the Long-Term Care Insurance Market.

The Theory of Social Health Insurance develops the theory of social health insurance alsoknown as public health insurance. While a good deal is known about the demand and supplyof private insurance, the theoretical basis of social health insurance is much more fragile. The Theory of Social Health Insurance examines questions including why does social healthinsurance exist and even dominate private health insurance in most developed countries? What are the objectives and constraints of social health insurance managers? What is the likelyoutcome or “performance” of social health insurance? The Theory of Social Health Insurance reviews the conventional theory of demand forinsurance and health insurance, the supply of health insurance in general and social health insurance in particular, the properties of the optimal health insurance contract, and whether there are factors limiting the growth of social health insurance.

This article extends the received literature on optimal provider payment by accounting for consumer heterogeneity in preferences for health insurance and health care. This heterogeneity breaks down the separation of the relationship between providers and the health insurer and the relationship between consumers and the insurer. Both experimental and market evidence for a high degree of heterogeneity are presented. Given heterogeneity, a uniform policy fails to effectively control moral hazard, while incentives for risk selection created by community rating cannot be neutralized through risk adjustment. Consumer heterogeneity spills over into relationships with providers, such that a uniform contract with providers cannot be optimal either. The decisive condition for ensuring optimality of provider payment is to replace community rating (which violates the principle of marginal cost pricing) by risk-rating of contributions combined with subsidization targeted at high risks with low incomes.

This article extends the received literature on optimal provider payment by accounting for consumer heterogeneity in preferences for health insurance and health care. This heterogeneity breaks down the separation of the relationship between providers and the health insurer and the relationship between consumers and the insurer. Both experimental and market evidence for a high degree of heterogeneity are presented. Given heterogeneity, a uniform policy fails to effectively control moral hazard, while incentives for risk selection created by community rating cannot be neutralized through risk adjustment. Consumer heterogeneity spills over into relationships with providers, such that a uniform contract with providers cannot be optimal either. The decisive condition for ensuring optimality of provider payment is to replace community rating (which violates the principle of marginal cost pricing) by risk-rating of contributions combined with subsidization targeted at high risks with low incomes.

The point of departure of this Editorial is the fact that we all are engaged in self-rationing in our everyday lives. We would like to spend more money on all sorts of nice things and devote more time to our cherished activities. Imposed rationing is characteristic of wartime governments, who seek to prevent the rich from gobbling up the resources left by the army. Since the publication in 1987 of David Callahan’s Setting Limits: Medical Goals in an Aging Society (Callahan, Setting limits: medical goals in an aging society, Simon & Schuster, New York, 1987), rationing of health care has become a widely debated issue (the Internet is full of pertinent entries). While rationing has also been addressed by health economists, there are three puzzling observations. First, Callahan (Callahan, Setting limits: medical goals in an aging society, Simon & Schuster, New York, 1987) wrote for an American audience whereas rationing was introduced by the British National Health Service (NHS) well before 1987, with little debate. Second, the economic theory of rationing had been laid out by James Tobin [Ectrica 20(4): 521–533, 1952] as early as 1952—but health economists seem to have neglected his groundwork when writing about rationing. Third, they accept government-imposed rationing as inevitable in the case of health care, as though the self-rationing alternative was unavailable. An attempt is made here to provide rational explanations for these puzzles.

Zusammenfassung: Das Ziel dieser Arbeit besteht in der Untersuchung der Skaleneffizienz von Gebietskörperschaften (Kantonen) in der Schweiz. Dazu dient eine Data Envelopment Analysis für den Untersuchungszeitraum von 2000 bis 2004. Als Output werden aggregierte Outputindikatoren von vier öffentlichen Aktivitäten (Verwaltung, Bildung, Gesundheit, Verkehr) verwendet, um für die 26 Kantone technische Effizienzwerte und Skaleneffizienzwerte zu bestimmen. Die Resultate lassen vermuten, dass die Kantone in den vier untersuchten Aktivitäten keine Skalenerträge aufweisen. Dies widerspricht dem aktuellen Trend zugunsten einer Zentralisierung öffentlicher Aufgaben und spricht für die Möglichkeit, mittels Tiebout-Wettbewerb zwischen den Schweizer Kantonen die Wohlfahrt der Bürger zu verbessern

Dieser Beitrag nennt die sog. adverse Selektion als zentralen Grund dafür, dass die Mehrheit der Ökonomen das Übergewicht der Sozialversicherung (SV) gegenüber der Privatversicherung (PV) auf einen Effizienzvorteil der SV zurückführt. Er nennt jedoch auch Effizienznachteile der SV, die in ihrer vergleichsweise beschränkten Fähigkeit liegen, dem moralischen Risiko wirksam zu begegnen. Es zeichnen sich drei zukünftige Herausforderungen sowohl an die PV und die SV ab, denen die PV (und insbesondere die PKV) eher besser als die SV (und die GKV) begegnen kann - allerdings unter der entscheidenden Bedingung, dass sie die Produktinnovation vorantreibt

Managed care (MC) imposes restrictions on physician behavior, but also holds promises, especially in terms of cost savings and improvements in treatment quality. This contribution reports on private-practice physicians' willingness to accept (WTA, compensation asked, respectively) for several MC features. In 2011, 1,088 Swiss ambulatory care physicians participated in a discrete choice experiment, which permits putting WTA values on MC attributes. With the exception of shared decision making and up to six quality circle meetings per year, all attributes are associated with non-zero WTA values. Thus, health insurers must be able to achieve substantial savings in order to create sufficient incentives for Swiss physicians to participate voluntarily in MC plans

Policy makers around the world seek to encourage generic substitution. In this paper, the importance of prescribing physicians’ imperfect agency is tested using the fact that some Swiss jurisdictions allow physicians to dispense drugs on their own account (physician dispensing, PD) while others disallow it. We estimate a model of physician drug choice with the help of drug claim data, finding a significant positive association between PD and the use of generics. While this points to imperfect agency, generics are prescribed more often to patients with high copayments or low incomes.

This editorial presents a critical review of the health model pioneered by Michael Grossman (MGM) in 1972 [8]. It argues that whereas the MGM has great charm for economists, it fails to achieve acceptance by interested laypersons and policy makers. The main reasons for this failure are: (1) the assumption of a long and fixed planning horizon, (2) a fixed ratio between individuals healthcare expenditure and the cost of their own health-enhancing efforts regardless of their state of health, and (3) their presumed ability to restore the state of health deemed optimal at a speed that does not depend on their state of health. An alternative formulation emphasizing the stochastic nature of health production is sketched that conceptually provides solutions to these three problems. In addition, it permits discarding a popular medical argument that seems to undermine the very basis of welfare analysis applied to health by claiming preferences to be unstable: "As long as you are healthy, you don't give a damn, but as soon as you are sick, you are prepared to sacrifice everything to restore your health.” The editorial concludes by outlining a research program that may help health economists break away from their MGM fixation

The purpose of this paper is to analyze the optimal scale of local jurisdictions (cantons) in Switzerland applying Data Envelopment Analysis (DEA) to the years 2000 to 2004. Aggregate output performance indicators for four local government activities (administration, education, health, and transportation) are used to measure technical and scale efficiency and to derive DEA scores. Results show that these public services fail to exhibit economies of scale, undermining quests for centralization of public good provision while suggesting the possibility of Tiebout competition.

Microeconomic theory predicts that if patients are fully insured and providers are paid fee-for-service, utilization of medical services exceeds the efficient level (‘moral hazard effect’). In Switzerland, both demand-side cost sharing and upply-side cost sharing have been introduced to mitigate this problem. Analyzing a panel dataset of about 150,000 adults, we find both types of cost sharing to be effective in curtailing the use of medical services. However, demand-side cost sharing options are preliminarily chosen by individuals in excellent health, causing ‘true’ cost savings achieved by supply-side cost sharing to be more important.

This study applies financial portfolio theory to determine efficient frontiers in the provision of electricity for the United States and Switzerland. Expected returns are defined by the rate of productivity increase of power generation (adjusted for external costs), volatility, by its standard deviation. Since unobserved productivity shocks are found to be correlated, Seemingly Unrelated Regression Estimation (SURE) is used to filter out the systematic component of the covariance matrix of the productivity changes. Results suggest that as of 2003, the feasible maximum expected return (MER) electricity portfolio for the United States contains more Coal, Nuclear, and Wind than actual but markedly less Gas and Oil. The minimum variance (MV) portfolio contains markedly more Oil, again more Coal, Nuclear, and Wind but almost no Gas. Regardless of the choice between MER and MV, U.S. utilities are found to lie substantially inside the efficient frontier. This is even more true of their Swiss counterparts, likely due to continuing regulation of electricity markets.

With prospective payment of hospitals becoming more common, measuring their performance is gaining in importance. However, the standard cost frontier model yields biased efficiency scores because it ignores technological heterogeneity between hospitals. In this paper, efficiency scores are derived from a random intercept and an extended random parameter frontier model, designed to overcome the problem of unobserved heterogeneity in stochastic frontier analysis. Using a sample of 100 Swiss hospitals covering the years 2004 to 2007 and applying Bayesian inference, significant heterogeneity is found, suggesting rejection of the standard cost frontier model. Estimated inefficiency decreases even below the 14 percent reported by Hollingsworth (2008) for European countries. Accounting for unobserved heterogeneity would make hospitals rated below 85 percent efficiency according to the standard model gain up to 12 percentage points, serving to highlight the importance of heterogeneity correction in the estimation of hospital performance.

This contribution contains an international comparison of preferences. Using two Discrete Choice Experiments (DCE), it measures willingness to pay for health insurance attributes in Germany and the Netherlands. Since the Dutch DCE was carried out right after the 2006 health reform, which made citizens explicitly choose a health insurance contract, two research questions naturally arise. First, are the preferences with regard to contract attributes (such as Managed-Care-type restrictions of physician choice) similar between the two countries? Second, was the information campaign launched by the Dutch government in the context of the reform effective in the sense of reducing status quo bias? Based on random-effects Probit estimates, these two questions can be answered as follows. First, while much the same attributes have positive and negative willingness to pay values in the two countries, their magnitudes differ, pointing to differences in preference structure. Second, status quo bias in the Netherlands is one-half of the German value, suggesting that Dutch consumers were indeed made to bear the cost of decision making associated with choice of a health insurance contract.