How a lot do slender networks influence premiums? – Healthcare Economist

Sufferers hate slender networks. Something that limits their selection of physicians or hospitals is disliked. Individuals love extra selection.

Payers, then again, like slender networks as a result of they save price–via the flexibility to barter decrease charges–and probably enhance high quality–if the contracted community has greater high quality physicians. The truth is, based on the KFF Employer Well being Advantages Survey, each price and high quality are necessary elements in deciding on a supplier community.

A key query is then, is how a lot cash do slender networks save well being plans? That’s the query {that a} paper by Dafny et al. (2017) goals to reply. The authors use information from the Robert Wooden Johnson Basis HIX Examine on silver-tier medical insurance plans provided on the 2014-2015 ACA Marketplaces in 8 states (CA, CO, FL, MI, NJ, NY, TX, WA). After utilizing these information and conducting a multivariate regression, the authors discover that:

…a rise in hospital community breadth…was linked to a premium enhance of 5.7 p.c, or $191 per 12 months—given the nationwide common premium of $3,359 for a twenty-seven-year-old in 2014. A rise in doctor community breadth from small (similar to 10 p.c of physicians) to giant (similar to 40 p.c) was linked to a premium enhance of 9.4 p.c, or $316 per 12 months. A rise in each hospital and doctor community breadth was linked to a premium enhance of 15.7 p.c, or $527 per 12 months. 

You may learn the total paper right here.