The pharmacy-based cost group (PCG) model uses medication prescribed to individuals in a base-year as marker for chronic conditions which are employed to adjust capitation payments to their health plans in the subsequent year. Although the PCG model enhances predictive performance, possibilities for gaming may arise as it is based on prior utilization. This study investigates several strategies to mitigate this problem. The best strategies appear to be: use a (high) number of prescribed daily doses to assign persons to PCGs, do not allow for comorbidity, and remove PCGs with low future costs. This PCG model accounts for almost twice as much variance as do demographic models. In 2002 the Dutch government implemented this model in the sickness fund sector (two-thirds of the population).

State-of-the-art risk equalization models undercompensate some risk groups and overcompensate others, leaving systematic incentives for risk selection. A natural approach to reducing the under-or overcompensation for a particular group is enriching the risk equalization model with risk adjustor variables that indicate membership in that group. For some groups, however, appropriate risk adjustor variables may not (yet) be available. For these situations, this paper proposes an alternative approach to reducing under-or overcompensation: constraining the estimated coefficients of the risk equalization model such that the under-or overcompensation for a group of interest equals a fixed amount. We show that, compared to ordinary least-squares, constrained regressions can reduce under/ overcompensation for some groups but increase under/ overcompensation for others. In order to quantify this trade-off two fundamental questions need to be answered: ''Which groups are relevant in terms of risk selection actions?'' and ''What is the relative importance of underand overcompensation for these groups?'' By making assumptions on these aspects we empirically evaluate a particular set of constraints using individual-level data from the Netherlands (N = 16.5 million). We find that the benefits of introducing constraints in terms of reduced under/overcompensations for some groups can be worth the costs in terms of increased under/overcompensations for others. Constrained regressions add a tool for developing risk equalization models that can improve the overall economic performance of health plan payment schemes.

The Floating Liquefied Natural Gas (FLNG) solution is gaining recognition as an effective means for economic monetization of stranded offshore gas reserves, or in specific cases, near shore/onshore reserves with insufficient local or regional markets. It is also being considered as an efficient and economic alternative to mid size (2 – 4 MTPA), and smaller (0.5 – 1.0 MTPA) land based liquefaction facilities. Significant inefficiencies in natural gas pricing across the world due to supply/demand imbalances, combined with recent finds of additional stranded offshore gas reserves as well as shale gas discoveries could help FLNG solutions capture a key portion of the natural gas value chain. The market for FLNGs over the next ten years is expected to follow a growth trajectory set by the downstream equivalent of FLNG; the floating storage and regasification unit (FSRU) industry over the last decade. The comfort and acceptance of floating LNG technology, and the economic advantages to many of the world's developing natural gas markets in the FSRU space suggest equal acceptance and opportunity for the FLNG upstream segment. The FLNG market in the next decade presents, strategic developers and financial investors, under the right circumstances, an opportunity to participate and create value, in this new energy infrastructure segment.

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