Harvard University Releases Economics Findings (Hospital Network Competition and Adverse Selection: Evidence from the Massachusetts Health Insurance Exchange): Economics

MARCH 01, 2022 (NewsRx) — By a News Reporter – Staff News Editor at Daily Insurance News — A new study on the economy is now available. According to reports from Cambridge, MA, by the editors of NewsRx, the research said, “Health insurers are increasingly competing in their networks of medical providers. Using data from the Massachusetts Insurance Exchange, I found substantial adverse selection against plans covering the most prestigious and expensive “star” hospitals.

Funders of this research include Harvard Economic Applications and Policy Laboratory, National Institute of Aging (NBER), Rumsfeld Foundation, national science foundation (NSF).

Our reporters got a quote from the research of Harvard University, “I highlight a theoretically distinct channel of selection: consumers loyal to star hospitals incur high expenses, conditioned by their state of health, because they use the expensive care of these hospitals. This implies a heterogeneity of additional costs for consumers to access star hospitals, which poses a challenge for standard selection policies.

According to the news editors, the research concluded: “In addition to screening on unobserved diseases, I find this creates strong incentives to exclude star hospitals, even with a risk adjustment in place.”

This research has been peer reviewed.


For more information on this research, see: Hospital Network Competition and Adverse Selection: Evidence From the Massachusetts Health Insurance Exchange. The American economic journal2022;112(2):578-615. The American economic journal can be contacted at: American Economic Association, 2014 BroadwayOffice 305, Nashville, TN 37203, United States.

Our journalists inform that additional information can be obtained by contacting Mark Shepard, Harvard University, Kennedy School of Government, Cambridge, MA 02138, United States.

The direct object identifier (DOI) for this additional information is: https://doi.org/10.1257/aer.20201453. This DOI is a link to a free or paid online electronic document, and can be your direct source for a journal article and its citation.

(Our reports provide factual information on research and discoveries from around the world.)

Martin E. Berry