NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

Measuring Consumer Valuation of Limited Provider Networks

Keith Marzilli Ericson, Amanda Starc

NBER Working Paper No. 20812
Issued in December 2014
NBER Program(s):The Program on Aging, The Health Care Program, The Health Economics Program, The Industrial Organization Program

We measure provider coverage networks for plans on the Massachusetts health insurance exchange using a two measures: consumer surplus from a hospital demand system and the fraction of population hospital admissions that would be covered by the network. The two measures are highly correlated, and show a wide range of networks available to consumers. We then estimate consumer willingness-to-pay for network breadth, which varies by age. 60-year-olds value the broadest network approximately $1200-1400/year more than the narrowest network, while 30-year-olds value it about half as much. Consumers place additional value on star hospitals, and there is significant geographic heterogeneity in the value of network breadth.

download in pdf format
   (176 K)

email paper

A non-technical summary of this paper is available in the April 2015 NBER Digest.  You can sign up to receive the NBER Digest by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w20812

Published: Keith Marzilli Ericson & Amanda Starc, 2015. "Measuring Consumer Valuation of Limited Provider Networks," American Economic Review, American Economic Association, vol. 105(5), pages 115-19, May. citation courtesy of

Users who downloaded this paper also downloaded* these:
Gruber and McKnight w20462 Controlling Health Care Costs Through Limited Network Insurance Plans: Evidence from Massachusetts State Employees
Curto, Einav, Levin, and Bhattacharya w20818 Can Health Insurance Competition Work? Evidence from Medicare Advantage
Ericson and Starc w19527 How Product Standardization Affects Choice: Evidence from the Massachusetts Health Insurance Exchange
Eichengreen w20836 Secular Stagnation: The Long View
Shepard w22600 Hospital Network Competition and Adverse Selection: Evidence from the Massachusetts Health Insurance Exchange
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

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

Contact Us