Measuring Consumer Valuation of Limited Provider Networks

Keith Ericson and Amanda Starc

American Economic Review, 2015, vol. 105, issue 5, 115-19

Abstract: We measure the breadth of insurance networks in the Massachusetts health insurance exchange. Using our measures, we estimate consumer willingness-to-pay for broad and narrow networks. We find that consumers have a wide range of plans available with dramatically different networks. While consumers value broader networks, their willingness-to-pay is smaller than the brand premium, indicating an additional role for brand preferences. Consumers place additional value on star hospitals, which may affect upstream negotiations. Finally, we find significant geographic heterogeneity in the value of broad networks.

JEL-codes: D12 G22 H51 H75 I13 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/aer.p20151082
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Citations: View citations in EconPapers (15)

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Working Paper: Measuring Consumer Valuation of Limited Provider Networks (2014)
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