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Does external medical review reduce disability insurance inflow?
1Center for Disability and Integration, Department of Economics, University of St. Gallen, Rosenbergstr. 51, 9000 St. Gallen, Switzerland.
Journal of Health Economics
|March 16, 2019
Summary
External medical review significantly reduces disability insurance (DI) incidence by 23%, particularly for hard-to-diagnose conditions. This policy also boosts labor market participation and proves cost-effective.
Area of Science:
- Health Economics
- Social Policy
- Medical Assessment
Background:
- Disability insurance (DI) systems often rely on treating physician assessments.
- External medical review is proposed to improve accuracy and efficiency.
- Switzerland's policy change provides a unique case study.
Purpose of the Study:
- To evaluate the impact of introducing external medical review on DI.
- To assess effects on DI incidence, benefit awards, and labor market participation.
- To determine the cost-effectiveness of external medical review.
Main Methods:
- Analysis of administrative data from Switzerland following a policy change.
- Quasi-experimental design to isolate the effect of medical review.
- Examination of DI incidence, benefit award types, and employment outcomes.
Main Results:
- External medical review reduced DI incidence by 23%.
- Reductions were most pronounced for conditions difficult for treating physicians to diagnose.
- Labor market participation increased, and benefit downgrades occurred for existing recipients.
- The policy demonstrated high cost-effectiveness.
Conclusions:
- External medical review enhances the accuracy of DI eligibility determination.
- It effectively reduces unwarranted DI awards and encourages work.
- The policy is a cost-effective tool for managing disability insurance programs.
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