Hospital Network Competition and Adverse Selection: Evidence from the Massachusetts Health Insurance Exchange

• 成果类型: Article
• 署名作者: Shepard, Mark
• 署名单位: Harvard University; National Bureau of Economic Research
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20201453
• 发表日期: 2022
• 页码: 578-615
• 关键词: markets; welfare; RISK; DESIGN; equilibrium; incentives; CONTRACT; inertia; payment; prices

摘要

Health insurers increasingly compete on their networks of medical providers. Using data from Massachusetts's insurance exchange, I find substantial adverse selection against plans covering the most prestigious and expensive star hospitals. I highlight a theoretically distinct selection channel: consumers loyal to star hospitals incur high spending, conditional on their medical state, because they use these hospitals' expensive care. This implies heterogeneity in consumers' incremental costs of gaining access to star hospitals, posing a challenge for standard selection policies. Along with selection on unobserved sickness, I find this creates strong incentives to exclude star hospitals, even with risk adjustment in place.