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Narrow provider networks and willingness to pay for continuity of care and network breadth

Lucas Higuera, Caroline S. Carlin and Bryan Dowd

Journal of Health Economics, 2018, vol. 60, issue C, 90-97

Abstract: Tiered and narrow provider networks are mechanisms implemented by health plans to reduce health care costs. The benefits of narrow networks for consumers usually come in the form of lower premiums in exchange for access to fewer providers. Narrow networks may disrupt continuity of care and access to usual sources of care. We examine choices of health plans in a private health insurance exchange where consumers choose among one broad network and four narrow network plans. Using a discrete choice model with repeated choices, we estimate the willingness to pay for a health plan that covers consumers’ usual sources of care. Willingness to pay for a network that covers consumers’ usual source of care is between $84 and $275/month (for primary care) and between $0 and $115/month (for specialists). We find that, given that a network covers their usual source of care, consumers show aversion only to the narrowest networks.

Keywords: Narrow networks; Willingness to pay; Discrete choice (search for similar items in EconPapers)
JEL-codes: I13 C25 (search for similar items in EconPapers)
Date: 2018
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Journal of Health Economics is currently edited by J. P. Newhouse, A. J. Culyer, R. Frank, K. Claxton and T. McGuire

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