Prior Health Expenditures and Risk Sharing with Insurers Competing on Quality
研究保险公司如何利用风险调整类别内的异质性进行风险选择，并分析在保险公司质量竞争下，使用既往支出作为风险调整因子总能提高社会福利。
Insurers can exploit the heterogeneity within risk-adjustment classes to select the good risks because they have more information than the regulator on the expected expenditures of individual insurees. To counteract this cream skimming, mixed systems combining capitation and cost-based payments have been adopted that do not, however, generally use the past expenditures of insurees as a risk adjuster. In this article, two symmetric insurers compete for clients by differentiating the quality of service offered to them according to some private information about their risk. In our setting it is always welfare improving to use prior expenditures as a risk adjuster.