Working Paper: NBER ID: w25190
Authors: Stuart V. Craig; Keith Marzilli Ericson; Amanda Starc
Abstract: Prices 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.
Keywords: No keywords provided
JEL Codes: D4; I11; I13; L11; L4
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| negotiated prices (P22) | value of health insurance contracts (G52) |
| negotiated prices (P22) | cost-sharing (D16) |
| negotiated prices (P22) | self-insured employers' costs (J32) |
| contractual form (ASO contracts) (L14) | negotiated prices (P22) |
| market share (L17) | negotiated prices (P22) |
| insurer behavior (G52) | negotiated prices (P22) |
| insurance demand (G52) | negotiated prices (P22) |
| negotiated prices (P22) | out-of-pocket savings (D14) |
| type of insurance product (HMO plans) (G52) | negotiated prices (P22) |
| type of insurance product (PPO plans) (G52) | negotiated prices (P22) |