The Role of Hospital Networks in Individual Mortality

Narrow hospital networks have proliferated in health systems with managed care. We investigate the causal effect of network breadth on mortality leveraging the termination of the largest health insurer in Colombia. The termination caused a substantial increase in mortality accompanied by reductions in network breadth among incumbent insurers. We estimate that broad-network insurers reduce mortality because they steer patients to higher-quality providers and reduce hospital congestion. Results imply that patients should be reassigned to incumbent insurers based on the overlap of their network with the terminated insurer, and that policies requiring minimum network coverage are needed to maintain patient health.