American Economic Journal:
Economic Policy
ISSN 1945-7731 (Print) | ISSN 1945-774X (Online)
What Does a Provider Network Do? Evidence from Random Assignment in Medicaid Managed Care
American Economic Journal: Economic Policy
vol. 15,
no. 1, February 2023
(pp. 473–509)
Abstract
Leveraging the random assignment of over 50,000 Medicaid enrollees in New York, I present causal evidence that narrower networks are a blunt instrument for reducing health care spending. While narrower networks constrain spending, they do so by generating hassle costs that reduce quantity, with modest effects on prices paid to providers. Enrollees assigned to narrower networks use fewer of both needed and unneeded services and are less satisfied with their plans. Using my causal estimates to construct counterfactuals, I identify an alternative assignment policy that reduces spending without harming satisfaction by matching consumers with narrower networks that include their providers.Citation
Wallace, Jacob. 2023. "What Does a Provider Network Do? Evidence from Random Assignment in Medicaid Managed Care." American Economic Journal: Economic Policy 15 (1): 473–509. DOI: 10.1257/pol.20210162Additional Materials
JEL Classification
- H51 National Government Expenditures and Health
- H75 State and Local Government: Health; Education; Welfare; Public Pensions
- I13 Health Insurance, Public and Private
- I18 Health: Government Policy; Regulation; Public Health
- I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs