Replication data for: Equilibrium Provider Networks: Bargaining and Exclusion in Health Care Markets

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Project Citation:

Ho, Kate, and Lee, Robin S. Replication data for: Equilibrium Provider Networks: Bargaining and Exclusion in Health Care Markets. Nashville, TN: American Economic Association [publisher], 2019. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E113194V1

Project Description

Summary: We evaluate the consequences of narrow hospital networks in commercial health care markets. We develop a bargaining solution, "Nash-in-Nash with Threat of Replacement," that captures insurers' incentives to exclude, and combine it with California data and estimates from Ho and Lee (2017) to simulate equilibrium outcomes under social, consumer, and insurer-optimal networks. Private incentives to exclude generally exceed social incentives, as the insurer benefits from substantially lower negotiated hospital rates. Regulation prohibiting exclusion increases prices and premiums and lowers consumer welfare without significantly affecting social surplus. However, regulation may prevent harm to consumers living close to excluded hospitals.

Scope of Project

JEL Classification:
      C78 Bargaining Theory; Matching Theory
      D85 Network Formation and Analysis: Theory
      G22 Insurance; Insurance Companies; Actuarial Studies
      H75 State and Local Government: Health; Education; Welfare; Public Pensions
      I11 Analysis of Health Care Markets
      I13 Health Insurance, Public and Private
      I18 Health: Government Policy; Regulation; Public Health

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Published Versions

V1 [2019-10-12]

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