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Hospital Network Competition and Adverse Selection: Evidence from the Massachusetts Health Insurance Exchange / Mark Shepard.
- Format:
- Book
- Author/Creator:
- Shepard, Mark.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w22600.
- NBER working paper series no. w22600
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Hospital Network Competition and Adverse Selection
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2016.
- Summary:
- Health insurers increasingly compete on their covered networks of medical providers. Using data from Massachusetts' pioneer insurance exchange, I find substantial adverse selection against plans covering the most prestigious and expensive "star" hospitals. I highlight a theoretically distinct selection channel: these plans attract consumers loyal to the star hospitals and who tend to use their high-price care when sick. Using a structural model, I show that selection creates a strong incentive to exclude star hospitals but that standard policy solutions do not improve net welfare. A key reason is the connection between selection and moral hazard in star hospital use.
- Notes:
- Print version record
- September 2016.
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