Reading list

Market structure and hospital–insurer bargaining in the Netherlands, by R. S. Halbersma, M. C. Mikkers, E. Motchenkova and I. Seinen

In 2005, competition was introduced in part of the hospital market in the Netherlands. Using a unique dataset of transactions and list prices between hospitals and insurers in the years 2005 and 2006, we estimate the influence of buyer and seller concentration on the negotiated prices. First, we use a traditional structure–conduct–performance model (SCP-model) along the lines of Melnick et al. (J Health Econ 11(3): 217–233, 1992) to estimate the effects of buyer and seller concentration on price–cost margins. Second, we model the interaction between hospitals and insurers in the context of a generalized bargaining model similar to Brooks et al. (J Health Econ 16: 417–434, 1997). In the SCP-model, we find that the market shares of hospitals (insurers) have a significantly positive (negative) impact on the hospital price–cost margin. In the bargaining model, we find a significant negative effect of insurer concentration, but no significant effect of hospital concentration. In both models, we find a significant impact of idiosyncratic effects on the market outcomes. This is consistent with the fact that the Dutch hospital sector is not yet in a long-run equilibrium.

[book] Just Health: Meeting Health Needs Fairly, by Norman Daniels. Mentioned by Aaron in a prior post.

The growth of public health expenditures in OECD countries: Do government ideology and electoral motives matter? by Niklas Potrafke

This paper empirically evaluates whether government ideology and electoral motives influenced the growth of public health expenditures in 18 OECD countries over the 1971–2004 period. The results suggest that incumbents behaved opportunistically and increased the growth of public health expenditures in election years. Government ideology did not have an influence. These findings indicate (1) the importance of public health in policy debates before elections and (2) the political pressure towards re-organizing public health policy platforms especially in times of demographic change.

Selection stories: Understanding movement across health plans, by David Cutler, Bryan Lincoln, and Richard Zeckhauser

This study assesses the factors influencing the movement of people across health plans. We distinguish three types of cost-related transitions: adverse selection, the movement of the less healthy to more generous plans; adverse retention, the tendency for people to stay where they are when they get sick; and aging in place, enrollees’ inertia in plan choice, leading plans with older enrollees to increase in relative cost over time. Using data from the Group Insurance Commission in Massachusetts, we show that adverse selection and aging in place are both quantitatively important. Either can materially impact equilibrium enrollments, especially when premiums to enrollees reflect these costs.

The value of coverage in the medicare advantage insurance market, by Abe Dunn

This paper examines the impact of coverage on demand for health insurance in the Medicare Advantage (MA) insurance market. Estimating the effects of coverage on demand poses a challenge for researchers who must consider both the hundreds of benefits that affect out-of-pocket costs (OOPC) to consumers, but also the endogeneity of coverage. These problems are addressed in a discrete choice demand model by employing a unique measure of OOPC that considers a consumer’s expected payments for a fixed bundle of health services and applying instrumental variable techniques to address potential endogeneity bias. The results of the demand model show that OOPC have a significant effect on consumer surplus and that not instrumenting for OOPC results in a significant underestimate of the value of coverage.

Implementing Accountable Care Organizations, by S Shortell, L Casalino, E Fisher.

Accountable Care Organizations: Implications for Antitrust Policy, by Taylor Burke and Sara Rosenbaum.

This analysis examines accountable care organizations (ACOs) and assesses their implications for antitrust policy. Consideration of the antitrust implications of ACOs is timely. […]

We begin with a brief overview of the ACO concept and describe legislative proposals to establish ACOs as a formal Medicare and Medicaid provider class subject to special payment rules. We then examine antitrust policy as it relates to clinical and financial integration in health care and consider how antitrust principles might facilitate the formation and operation of ACOs.

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