FYI - Information on a new working paper published by the US National Bureau of Economic Research that may be of interest to some
Best wishes
David McDaid
LSE Health and Social Care
The Welfare Effects of Restricted Hospital Choice in the US Medical Care Market
Katherine Ho
NBER Working Paper No. 11819
Issued in December 2005
http://papers.nber.org/papers/W11819
Managed care health insurers in the US restrict their enrollees' choice of hospitals to within specific networks. This paper considers the implications of these restrictions. A three-step econometric model is used to predict consumer preferences over health plans conditional on the hospitals they offer. The results indicate that consumers place a positive and significant weight on their expected utility from the hospital network when choosing plans. A welfare analysis, assuming fixed prices, implies that restricting consumers' choice of hospitals leads to a loss to society of approximately $1 billion per year across the 43 US markets considered. This figure may be outweighed by the price reductions generated by the restriction.
|