Title: The welfare effects of restricted hospital choice in the US medical care market
Description: "Managed care health insurers in the US restrict their enrollees' choice of hospitals to within specific networks.  This paper considers the implications of these restrictions.  A three-step econometric model is used to predict consumer preferences over health plans conditional on the hospitals they offer.  The results indicate that consumers place a positive and significant weight on their expected utility from the hospital network when choosing plans.  A welfare analysis, assuming fixed prices, implies that restricting consumers' choice of hospitals leads to a loss to society of approximately $1 billion per year across the 43 US markets considered.  This figure may be outweighed by the price reductions generated by the restriction"--National Bureau of Economic Research web site.
Subjects: Economic aspects of Hospitals, Economic aspects of Managed care plans (Medical care), Hospitals, Managed care plans (Medical care)
Places: United States