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Public Spillovers from Private Insurance Contracting: Physician Responses to Managed Care

Author

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  • Michael R. Richards
  • D. Sebastian Tello-Trillo

Abstract

Managed care is rebounding as more emphasis is placed on cost containment. These efforts may benefit consumers but challenge providers; however, empirical evidence on how supply-side managed care influences physicians is incomplete. We leverage a quasi-experiment in which a commercial insurer imposed a new contract regime on behavioral health providers in response to recent policy shifts. We demonstrate spillovers in the form of negative effects on local physician supply and positive effects on Medicare and Medicaid participation in areas where the insurer has market power. Commercially insured patients are also not obviously harmed but receive less intense services in some settings.

Suggested Citation

  • Michael R. Richards & D. Sebastian Tello-Trillo, 2019. "Public Spillovers from Private Insurance Contracting: Physician Responses to Managed Care," American Economic Journal: Economic Policy, American Economic Association, vol. 11(4), pages 375-403, November.
    • Handle: RePEc:aea:aejpol:v:11:y:2019:i:4:p:375-403
    Note: DOI: 10.1257/pol.20170441
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    Citations

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    Cited by:

    1. Rong Fu & Yichen Shen & Haruko Noguchi, 2021. "The best of both worlds? The economic effects of a hybrid fee‐for‐service and prospective payment reimbursement system," Health Economics, John Wiley & Sons, Ltd., vol. 30(3), pages 505-524, March.
    2. Michael L. Barnett & Andrew Olenski & Adam Sacarny, 2023. "Common Practice: Spillovers from Medicare on Private Health Care," American Economic Journal: Economic Policy, American Economic Association, vol. 15(3), pages 65-88, August.
    3. Geruso, Michael & Richards, Michael R., 2022. "Trading spaces: Medicare's regulatory spillovers on treatment setting for non-Medicare patients," Journal of Health Economics, Elsevier, vol. 84(C).
    4. Timothy J. Layton & Nicole Maestas & Daniel Prinz & Boris Vabson, 2019. "Private vs. Public Provision of Social Insurance: Evidence from Medicaid," NBER Working Papers 26042, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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