New Findings in Health Economics Described from Stanford University (Does health plan generosity enhance hospital market power?)

By a News Reporter-Staff News Editor at Health & Medicine Week -- Researchers detail new data in Health and Medicine. According to news reporting originating in Stanford, California, by NewsRx journalists, research stated, "We test whether the generosity of employer-sponsored health insurance facilitates the exercise of market power by hospitals. We construct indices of health plan generosity and the price and volume of hospital services using data from Truven MarketScan for 601 counties from 2001 to 2007."

The news reporters obtained a quote from the research from Stanford University, "We use variation in the industry and union status of covered workers within a county over time to identify the causal effects of generosity. Although OLS estimates fail to reject the hypothesis that generosity facilitates the exercise of hospital market power, IV estimates show a statistically significant and economically important positive effect of plan generosity on hospital prices in uncompetitive markets, but not in competitive markets."

According to the news reporters, the research concluded: "Our results suggest that most of the aggregate effect of hospital market structure on prices found in previous work may be coming from areas with generous plans."

For more information on this research see: Does health plan generosity enhance hospital market power? Journal of Health Economics, 2015;44():54-62. Journal of Health Economics can be contacted at: Elsevier Science Bv, PO Box 211, 1000 Ae Amsterdam, Netherlands. (Elsevier - www.elsevier.com; Journal of Health Economics - www.journals.elsevier.com/journal-of-health-economics/)

Our news correspondents report that additional information may be obtained by contacting L.C. Baker, Stanford University, Hoover Inst, Stanford, CA 94305, United States. Additional authors for this research include M.K. Bundorf and D.P. Kessler (see also Health and Medicine).

Keywords for this news article include: Stanford, Hospital, California, United States, Health and Medicine, North and Central America

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