Abstract
In this paper, we use a discrete time Phase-type process to model the health care cost of an insurance contract by considering all possible critical health states of an individual with constant interest rate. From the moment generating function of the NPV, we derive a recursive formula of this Markov Reward Model (MRM).
| Original language | English |
|---|---|
| Journal | Advances in Decision Sciences |
| Volume | 23 |
| Issue number | 2 |
| Publication status | Published - Jun 2019 |
Keywords
- Health dependent costs
- Markov reward model
- Net present value
- Phase-type aging process
- Recursive moments
ASJC Scopus subject areas
- General Decision Sciences
- Statistics and Probability
- Computational Mathematics
- Applied Mathematics