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Switching benefits and costs in the Irish health insurance market: an analysis of consumer surveys

Conor Keegan (), Conor Teljeur, Brian Turner () and Steve Thomas
Additional contact information
Conor Teljeur: Health Information and Quality Authority
Steve Thomas: Trinity College Dublin

International Journal of Health Economics and Management, 2019, vol. 19, issue 1, No 2, 15-32

Abstract: Abstract Relatively little analysis has taken place internationally on the consumer-reported benefits and costs to switching insurer in multi-payer health insurance markets. Ideally, consumers should be willing to switch out of consideration for price and quality and switching should be able to take place without incurring significant switching costs. Costs to switching come in many forms and understanding the nature of these costs is necessary if policy interventions to improve market competition are to be successful. This study utilises data from consumer surveys of the Irish health insurance market collected between 2009 and 2013 (N $$=$$ = 1703) to examine consumer-reported benefits and costs to switching insurer. Probit regression models are specified to examine the relationship between consumer characteristics and reported switching costs, and switching behaviour, respectively. Overall evidence suggests that switchers in the Irish market mainly did so out of consideration for price. Transaction cost was the most common switching cost identified, reported by just under 1 in 7 non-switchers. Psychological switching costs may also be impacting behaviour. Moreover, high-risk individuals were more likely to experience switching costs and this was reflected in actual switching behaviour. A recent information campaign launched by the market regulator may prove beneficial in reducing perceived transaction costs in the market, however, a more focused campaign aimed at high-risk consumers may be necessary to reduce inequalities. Policy-makers should also consider the impact insurer behaviour may have on decision-making.

Keywords: Health insurance markets; Switching benefits; Switching costs; Irish health system (search for similar items in EconPapers)
JEL-codes: I11 I13 I18 D12 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s10754-018-9244-1

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International Journal of Health Economics and Management is currently edited by Leemore Dafny, Robert Town, Mark Pauly, David Dranove and Pedro Pita Barros

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