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Our study explores friction costs in terms of competition and market structure, considering factors such as market share, industry leverage levels, industry hedging levels, number of peers, and the geographic concentration that influences reinsurance purchase in the Property and Casualty insurance industry in China. Financial factors that influence the hedging level are also included. The data are hand collected from 2008 to 2015 from the Chinese Insurance Yearbook. Using panel data analysis techniques, the results are interesting. The capital structure shows a significant negative relationship with the hedging level. Group has a negative relationship with reinsurance purchases. Assets exhibit a negative relationship with hedging levels. The hedging level has a negative relation with the individual hedging level. Insurers have less incentive to hedge because it provides less resource than leverage. The study also robustly investigates the strategic risk management separately by the financial crises.

Researchers recommend a reorganization of the medical profession into larger groups with a multispecialty mix. We analyze whether there is evidence for the superiority of these models and if this organizational transformation is underway.

We summarize the evidence on scale and scope economies in physician group practice, and then review the trends in physician group size and specialty mix to conduct survivorship tests of the most efficient models.

The distribution of physician groups exhibits two interesting tails. In the lower tail, a large percentage of physicians continue to practice in small, physician-owned practices. In the upper tail, there is a small but rapidly growing percentage of large groups that have been organized primarily by non-physician owners.

While our analysis includes no original data, it does collate all known surveys of physician practice characteristics and group practice formation to provide a consistent picture of physician organization.

Our review suggests that scale and scope economies in physician practice are limited. This may explain why most physicians have retained their small practices.

Larger, multispecialty groups have been primarily organized by non-physician owners in vertically integrated arrangements. There is little evidence supporting the efficiencies of such models and some concern they may pose anticompetitive threats.

This is the first comprehensive review of the scale and scope economies of physician practice in nearly two decades. The research results do not appear to have changed much; nor has much changed in physician practice organization.

Purpose – To analyse the development of pharmaceutical policy in the Dutch market for outpatient prescription drugs since the early 1990s.

Methodology – A literature review and document analysis is performed to examine the effects of pharmaceutical policy on the performance of the Dutch market for outpatient prescription drugs since the early 1990s.

Findings – Government efforts to control prices of pharmaceuticals were effective in constraining prices of in-patent drugs, but had an opposite effect on the prices of generic drugs. The gradual transition towards managed competition – that particularly gained momentum after the introduction of the new universal health insurance scheme in 2006 – appears to be more effective in constraining prices of generic drugs than earlier government efforts to control these prices.

Originality – Comparative analysis of the impact of price regulation and managed competition on generic drug prices in the Netherlands.

Implications – Implications of the changing role of health insurers are discussed for the future market for prescription drugs and role of pharmacies in the Netherlands.

Insurance is a dynamic business highly affected by the environment it operates in. Alongside the practice of insurance, come principles on which the business of insurance is based. One of the principles, that is not short of controversy, is the doctrine of utmost good faith which requires full disclosure of material facts by the contracting parties. The author, in this chapter, explored the need for change in the regulation of this insurance principle and discussed the drivers behind these changes and the commensurate effect on the practice of insurance. The author delved into case studies, practices and literature and traced back to the origins of the long-standing principle of utmost good faith. This principle is one on which the acceptance (or otherwise) and premium of an insurance contract is based and through which certain factors and developments in the industry have led to a major reform in some jurisdiction.

The author discussed the development and drivers leading to reform and concluded that reform is ultimately the result of public outcry, through individual cases heard predominantly in court, a well-established reform committee, the socio-political environment of that country and the advent of technology. Moreover, although, different countries have their own jurisdictions, laws and regulations as well as market practices and international trade have made it imperative to have common technical practices between market players especially in insurance, which depends on the spread of risks between countries internationally. Smooth insurance business can only be established if this reform is harmonised between jurisdictions.

Objective – To examine whether local area pharmacy market structure influences contract terms between prescription drug plans (PDPs) and pharmacies under Part D.

Data – Data were collected and compiled from four sources: a national mail survey to independent pharmacies, National Council for Prescription Drug Programs (NCPDP) Pharmacy database, 2000 U.S. Census data, and 2006 Economic Census data.

Results – Reimbursements varied substantially across pharmacies. Reimbursement for 20mg Lipitor (30 tablets) ranged from $62.40 to $154.80, and for 10mg Lisinopril (30 tablets), it ranged from $1.05 to $18. For brand-name drug Lipitor, local area pharmacy ownership concentration had a consistent positive effect on pharmacy bargaining power across model specifications (estimates between 0.084 and 0.097), while local area per capita income had a consistent negative effect on pharmacy bargaining power across specifications(−0.149 to −0.153). Few statistically significant relationships were found for generic drug Lisinopril.

Conclusion – Significant variation exists in PDP reimbursement and pharmacy bargaining power with PDPs. Pharmacy bargaining power is negatively related to the competition level and the income level in the area. These relationships are stronger for brand name than for generics. As contract offers tend to be non-negotiable, variation in reimbursements and pharmacy bargaining power reflect differences in initial insurer contract offerings. Such observations fit Rubinstein's subgame perfect equilibrium model.

Implication – Our results suggest pharmacies at the most risk of closing due to low reimbursements are in areas with many competing pharmacies. This implies that closures related to Part D changes will have limited effect on Medicare beneficiaries’ access to pharmacies.

This chapter reviews recent developments in the density discontinuity approach. It is well known that agents having perfect control of the forcing variable will invalidate the popular regression discontinuity designs (RDDs). To detect the manipulation of the forcing variable, McCrary (2008) developed a test based on the discontinuity in the density around the threshold. Recent papers have noted that the sorting patterns around the threshold are often either the researcher’s object of interest or may relate to structural parameters such as tax elasticities through known functions. This, in turn, implies that the behavior of the distribution around the threshold is not only informative of the validity of a standard RDD; it can also be used to recover policy-relevant parameters and perform counterfactual exercises.

This chapter explores correspondences between the costs and benefits of financial and circus safety nets. The author stresses the idea that the character of a country's net cannot be static. It must adapt promptly to changes in the market, legal, bureaucratic, and ethical problems it is intended to alleviate.

Safety nets expand over time for two reasons. First, large firms whose operations lie formally outside the net have strong incentives to make themselves too difficult for authorities to fail and unwind in crisis circumstances. Second, in good times, safety-net managers underinvest in crisis planning. As a result, crisis-generated changes in the ordering of regulatory norms dispose them to rescue firms that are difficult to fail and unwind without holding themselves closely accountable for either the costs or the distributional effects of the subsidies the rescue engenders.

Few issues in business ethics are as polarizing as the practice of risk classification and underwriting in the insurance industry. Theorists who approach the issue from a background in economics often start from the assumption that policy-holders should be charged a rate that reflects the expected loss that they bring to the insurance scheme. Yet theorists who approach the question from a background in philosophy or civil rights law often begin with a presumption against so-called “actuarially fair” premiums and in favor of “community rating,” in which everyone is charged the same price. This paper begins by examining and rejecting the three primary arguments that have been given to show that actuarially fair premiums are unjust. It then considers the two primary arguments that have been offered by those who wish to defend the practice of risk classification. These arguments overshoot their target, by requiring a “freedom to underwrite” that is much greater than the level of freedom enjoyed in most other commercial transactions. The paper concludes by presenting a defense of a more limited right to underwrite, one that grants the legitimacy of the central principle of risk classification, but permits specific deviations from that ideal when other important social goods are at stake.

Integrating interdisciplinary studies with Human Capital Management Accounting (HCMA) refers to the dynamics of organized interdisciplinary action that are transversal or cross-cutting. This approach requires the mastery of a certain number of technical skills and disciplines, as well as the capacity to use them in a process to solve problems of financial performance. This is accomplished through the specific interaction tasks that are performed by each management function and operational unit, which act in real time with others, in the same direction as an organizational team, using a selected risk appetite threshold base.

Putting business fields side by side, (i.e., business disciplines silos, as is normally the case in MBA programs), is not enough to create the transversal interaction dynamic needed for firms to achieve expected financial performance goals. As a result, few graduates today have the cross-cutting or vertical skills required to act, in real time, from their workstation in accordance with the pyramid shape of the organization chart in order to create value.

This chapter presents the results of the interface established by a faculty member in the Accounting Department of the University of San Francisco with a “seasoned leader in the FinTech industry.” It proposes a single portal for employers and HRMs to which the continuing education services of professional training associations, executive education departments of colleges, and MBA schools and universities, can connect to issue the HCMA certificate supplementing their training offerings focused on “Leadership Development”.