Research On Hospital Expense Distribution And Expense Ratio Of Medical Insurance

With the development of our society, the continued growth in demand for Medical Security and the construction of Social Medical Security System, the development of health insurance business has entered a new stage. According to a series of policies and planning which is issued by the government to promote the development of health insurance business, health insurance business has ushered in a good development environment. From the year 2012,helth insurance has achieved rapid growth while the growth rate of personal insurance business is getting slow. It shows that the development potential of health insurance is huge. But the profit model and the business ideas of health insurance are still not clear and the business operating model of sustainable development has not been established because of the late start. So, despite the fast pace of development of health insurance in recent years, the loss ratio of insurance companies which are running health insurance is very high and most of these companies are in the state of loss.In order to solve these problems, we not only need to improve related laws and regulations, but also need to improve actuarial techniques. Medical insurance is the most important part of health insurance. That's what we are going to discuss in this article. The loss distribution of medical insurance is the foundation of medical insurance actuarial.The main content of this paper is that, how to screen out the best theoretical distribution, how to estimate the parameters and how to divide the sample data in order to make the distribution pass the test of significance. The final conclusion is that general hospital cost follow the Lognormal distribution and high hospital cost approximately follow the Pareto distribution. According to these conclusion, the last part of this paper will make some comments about how to adjust the cost rate of medical insurance and so on. So it is valuable to study the loss distribution of medical insurance.There are four chapters in this paper, the main content and viewpoints as follows:Chapter 1, Preface. There are three parts in the preface, first, the background and meaning about this research is introduced. Although the development of health insurance is great, there are still some problems in the process of development. To solve these problems, an effective method is to improve actuarial techniques, and the study about loss distribution is the key to that. Second, the content and ideas about this research is introduced. The third part is the literature review.Chapter 2 is about theoretical knowledge, it tells us the characteristics of hospital cost, the definition and properties of theoretical distribution, the methods and steps to estimate parameters and two common methods to test the goodness-of-fit.Chapter 3 is the most important part in this paper, it is about empirical analysis. After all the sample data are fitted, we find that the best theoretical distribution is the lognormal distribution. But it can't pass the test of significance. So in order to get better results and better estimates, we divided the sample data into several groups by type, gender, age. Also we innovative divided the hospital costs into general hospital costs and high hospital costs. Then we put a set of data as an example to illustrate how to fit the distribution and estimate parameters. After analysis, we get some stable conclusions, general hospital costs follow the Lognormal distribution and high hospital costs approximately follow the Pareto distribution. Because insurance companies always pay more attentions to hospital costs of serious illness, the hospitalization expenses of patients with cancer were analyzed, and the distribution of it follows the Lognormal distribution too. All these conclusions provide an important basis for the subsequent actuarial work such as product pricingIn chapter 4,we discussed something about expense ratio of hospital insurance. Pricing principle of insurance products, actuarial model and actuarial assumptions of medical insurance is introduced in this chapter. Then according to those conclusions we got in previous chapter and the payment methods of medical insurance in Chengdu, we discussed the adequacy of expense rate of hospital insurance in Chengdu. Finally, we put forward some suggestions.