ABSTRACT
This chapter discusses some important questions which are raised by the risk-adjustment schemes. It provides the theoretical background to compare private and public health insurance systems and the rationale of regulated competition. The chapter focuses on the aspects of efficiency and solidarity. The developments in Belgium and Switzerland are described in a second section. It argues that the construction of risk adjustment schemes is not merely a technical matter, but raises substantial ethical questions. Each insurance scheme represents an alternative method for pooling the risk of becoming ill and each implies a certain solidarity concept. In a public and centralised system, equity can be imposed but incentives for controlling costs may be lacking and the freedom of choice of the consumers is severely restricted. Efficiency can only increase through the introduction of regulated markets if insurers can influence the expenditures and compete on price and quality grounds.
