Equalizing the Cost of Health Insurance

The Dutch government compensates health insurance companies when insuringindividuals who are estimated to have high health care costs. This is necessaryto avoid insurers not offering services to certain groups or not providing themwith a high quality of service. It is, however, unknown to what extent thedifferences in health care expenses by different groups of people are truly due toa poorer or better health status. We explore several statistical approaches thatfacilitate explaining the cause of these differences.