BENEFITS-IN-KIND PRINCIPLE AND COST-CONTA INMENT

Benefits-in-kind and co-payment are often regarded as instruments to s upport selfresponsible demand of the insured and to generate effective cost control. Economic theory however assumes that benefits-in-kind a lone (without co-payment) will not have a great influence on the deman d decision of the insured, because with rational behaviour price is no t a determinant of demand. Also the control effects of (limited) co-pa yment are to be regarded as rather low. According to the hypothesis of supplier induced demand the major influence on demand is generated by those providing health care services, as soon as the patient has made up the decision to visit a doctor. But co-payment determines the deci sion and the timing of the initial contact, resulting in potentially n egative effects on medical outcome. This is especially true, if co-pay ment is not moderated by social policy. These theoretical consideratio ns are supported by empirical evidence provided by the example of the French ambulatory care sector.