Provider Competition, Spillovers, and Health Care Productivity
Friday, Jan. 3, 2020 8:00 AM - 10:00 AM (PDT)
- Chair: Michael Chernew, Harvard University
Spillover Effects of Health Insurance Payments: Evidence from a Randomized Controlled Trial
AbstractChanges in health insurance payments may affect not only directly targeted patients but can also have spillover effects on non-targeted patients. Yet creditably estimating such spillovers can be challenging, as effects on non-targeted patients is difficult to distinguish from a falsification test gone wrong. We overcome this issue by studying the spillovers effects of a Medicare payment reform that tested the impact of bundled payments using a nationwide, MSA-level randomized-controlled trial. We estimate that the payment reform – which targeted Traditional Medicare patients – had effects of similar size and magnitude on non-targeted Medicare Advantage patients. We discuss the implications of these findings for estimates of the impact of health insurance payment reforms and for the design of health insurance policy.
How Important Is Price Variation Between Health Insurers?
AbstractPrices 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.
- I1 - Health
- I1 - Health