IDEAS home Printed from https://ideas.repec.org/a/bpj/rneart/v20y2021i4p187-212n3.html
   My bibliography  Save this article

Health Care Provider Networks: Are Insurers Better Off?

Author

Listed:
  • Mougeot Michel

    (CRESE, University of Bourgogne-Franche-Comte, Besancon, France)

  • Naegelen Florence

    (CRESE, University of Bourgogne-Franche-Comte, Besancon, France)

Abstract

Certain health insurers offer a free choice of providers and an identical copayment regardless of the provider. Others build networks and use selective contracting and financial incentives to channel policyholders to contracted suppliers. In the case of unregulated prices, we compare these two policies when the off-network medical service is not covered. We show how policy ranking depends on the characteristics of demand. If demand is linear, a for-profit insurer and a not-for-profit insurer obtain a higher profit and utility under selective contracting than under uniform reimbursement. In the constant elasticity case, these results do not hold. Insurers prefer uniform reimbursement while consumers are better off under selective contracting in both cases.

Suggested Citation

  • Mougeot Michel & Naegelen Florence, 2021. "Health Care Provider Networks: Are Insurers Better Off?," Review of Network Economics, De Gruyter, vol. 20(4), pages 187-212, December.
    • Handle: RePEc:bpj:rneart:v:20:y:2021:i:4:p:187-212:n:3
    DOI: 10.1515/rne-2021-0038
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/rne-2021-0038
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/rne-2021-0038?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    More about this item

    Keywords

    selective contracting; providers network; product differentiation; health care demand elasticity; imperfect substitutability;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I14 - Health, Education, and Welfare - - Health - - - Health and Inequality

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:rneart:v:20:y:2021:i:4:p:187-212:n:3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.