Harvard University Reports Findings in Economics (Hospital Network Competition and Adverse Selection: Evidence From the Massachusetts Health Insurance Exchange): Economics

2022 MAR 01 (NewsRx) -- By a News Reporter-Staff News Editor at Insurance Daily News -- A new study on Economics is now available. According to news reporting out of Cambridge, Massachusetts, by NewsRx editors, the research stated, “Health insurers increasingly compete on their networks of medical providers. Using data from Massachusetts’s insurance exchange, I find substantial adverse selection against plans covering the most prestigious and expensive ‘star’ hospitals.”

Funders for this research include Harvard’s Lab for Economic Applications and Policy, National Institute on Aging (NBER), Rumsfeld Foundation, National Science Foundation (NSF).

Our news journalists obtained a quote from the research from Harvard University, “I highlight a theoretically distinct selection channel: consumers loyal to star hospitals incur high spending, conditional on their medical state, because they use these hospitals’ expensive care. This implies heterogeneity in consumers’ incremental costs of gaining access to star hospitals, posing a challenge for standard selection policies.”

According to the news editors, the research concluded: “Along with selection on unobserved sickness, I find this creates strong incentives to exclude star hospitals, even with risk adjustment in place.”

This research has been peer-reviewed.

For more information on this research see: Hospital Network Competition and Adverse Selection: Evidence From the Massachusetts Health Insurance Exchange. The American Economic Review, 2022;112(2):578-615. The American Economic Review can be contacted at: Amer Economic Assoc, 2014 Broadway, Ste 305, Nashville, TN 37203, USA.

Our news journalists report that additional information may be obtained by contacting Mark Shepard, Harvard University, Kennedy School of Government, Cambridge, MA 02138, United States.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1257/aer.20201453. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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