How Important Is Price Variation Between Health Insurers?

Stuart V. Craig, Keith Ericson and Amanda Starc

No 25190, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Prices negotiated between payers and providers affect a health insurance contract's value via enrollees' cost-sharing and self-insured employers' costs. However, price variation across payers is hard to observe. We measure negotiated prices for hospital-payer pairs in Massachusetts and characterize price variation. Between-payer price variation is similar in magnitude to between-hospital price variation. Administrative-services-only contracts, in which insurers do not bear risk, have higher prices. We model negotiation incentives and show that contractual form and demand responsiveness to negotiated prices are important determinants of negotiated prices.

JEL-codes: D4 I11 I13 L11 L4 (search for similar items in EconPapers)
Date: 2018-10
New Economics Papers: this item is included in nep-cta, nep-hea, nep-ias and nep-ind
Note: EH IO
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published as Stuart V. Craig & Keith Marzilli Ericson & Amanda Starc, 2021. "How important is price variation between health insurers?," Journal of Health Economics, vol 77.

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