Surprise! Out-of-Network Billing for Emergency Care in the United States

Zack Cooper, Fiona Scott Morton, Nathan Shekita

NBER Working Paper No. 23623
Issued in July 2017, Revised in April 2018
NBER Program(s):Health Care

Hospitals and physicians independently negotiate contracts with insurers. As a result, a privately insured individual can attend an in-network hospital, but receive care from an out-of-network physician. Because patients do not choose their emergency physician, emergency physicians can remain out-of-network and charge high prices without losing volume. This strong outside option improves their bargaining power with insurers. We show that emergency physician outsourcing firms take advantage of this strong outside option by either remaining out-of-network or by using it to negotiate higher in-network rates. We propose a policy that would restore competition to the ED physician market and protect consumers.

You may purchase this paper on-line in .pdf format from ($5) for electronic delivery.

Access to NBER Papers

You are eligible for a free download if you are a subscriber, a corporate associate of the NBER, a journalist, an employee of the U.S. federal government with a ".GOV" domain name, or a resident of nearly any developing country or transition economy.

If you usually get free papers at work/university but do not at home, you can either connect to your work VPN or proxy (if any) or elect to have a link to the paper emailed to your work email address below. The email address must be connected to a subscribing college, university, or other subscribing institution. Gmail and other free email addresses will not have access.


A non-technical summary of this paper is available in the 2017 number 4 issue of the NBER Bulletin on Aging and Health. You can sign up to receive the NBER Bulletin on Aging and Health by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w23623

Users who downloaded this paper also downloaded* these:
Ljungqvist and Smolyansky w20753 To Cut or Not to Cut? On the Impact of Corporate Taxes on Employment and Income
Cooper, Kowalski, Powell, and Wu w23748 Politics, Hospital Behavior, and Health Care Spending
Abraham, Drake, Sacks, and Simon w23597 Demand for Health Insurance Marketplace Plans Was Highly Elastic in 2014-2015
Finkelstein, Hendren, and Shepard w23668 Subsidizing Health Insurance for Low-Income Adults: Evidence from Massachusetts
Duggan, Goda, and Jackson w23607 The Effects of the Affordable Care Act on Health Insurance Coverage and Labor Market Outcomes
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us