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J Health Econ. 2016 Dec;50:86-98. doi: 10.1016/j.jhealeco.2016.09.007. Epub 2016 Sep 21.

The effect of narrow provider networks on health care use.

Author information

1
Economics Department, University of Illinois at Chicago, 601 South Morgan Street, 725 University Hall (MC 144), Chicago, IL 60607, USA.
2
Division of Health Policy and Administration, School of Public Health, University of Illinois at Chicago, 1603 W. Taylor Street, Chicago, IL 60612, USA. Electronic address: losasso@uic.edu.

Abstract

Network design is an often overlooked aspect of health insurance contracts. Recent policy factors have resulted in narrower provider networks. We provide plausibly causal evidence on the effect of narrow network plans offered by a large national health insurance carrier in a major metropolitan market. Our econometric design exploits the fact that some firms offer a narrow network plan to their employees and some do not. Our results show that narrow network health plans lead to reductions in health care utilization and spending. We find evidence that narrow networks save money by selecting lower cost providers into the network.

KEYWORDS:

Benefit design; Health insurance; Narrow networks; Selective contracting; Small group market

PMID:
27697699
DOI:
10.1016/j.jhealeco.2016.09.007
[Indexed for MEDLINE]

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