Physicians may engage in medical procedures that provide little benefit to their patients in order to reduce their risk of a malpractice suit. E. Technological Change 1. Medical research in the U.S. has resulted in rapid technological change in this field. F. Experience Rating of Insurance Policies 1. Insurance rating is the basic procedure used by insurance companies to determine insurance premiums.
Most health insurance is experience-rated.
One method of experience rating is to base premiums on individual or group characteristics that are correlated with the use of health care. Experience rating may impose costs on the health care system. Experience rating leads to discrimination in the job market against workers with higher-cost health experiences or prospects. This can lead firms to bypass more productive workers. Experience rating produces job lock, a situation in which an individual is afraid to leave a job because of the fear of losing health insurance coverage.