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Network Incentives in Managed Health Care

Author

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  • Ma, C.-t.A.
  • McGuirem T.G.

Abstract

This paper introduces a theory of network incentives in managed health care. Participation in the plan's "network" confers an economic benefit on providers; in example, the plan expects compliance with its protocols. The network sets a target for the number of outpatient visits in an episode of care. A provider failing to satisfy the target may be penalized by the paln's attempt to direct patients to other providers within its network. There is an equilibrium in which every provider in the networlk uses the target.

Suggested Citation

  • Ma, C.-t.A. & McGuirem T.G., 1998. "Network Incentives in Managed Health Care," Papers 94, Boston University - Department of Economics.
    • Handle: RePEc:fth:bostec:94
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    1. repec:vuw:vuwscr:19063 is not listed on IDEAS
    2. Limbrock Frank, 2011. "Pecuniary and Non-Pecuniary Incentives in Prescription Pharmaceuticals: The Case of Statins," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(2), pages 1-30, January.
    3. Tor Iversen & Ching-to Ma, 2011. "Market conditions and general practitioners’ referrals," International Journal of Health Economics and Management, Springer, vol. 11(4), pages 245-265, December.
    4. Audrey Boilley, 2013. "Duopoly Competition and Regulation in a Two-Sided Health Care Insurance Market with Product Differentiation," Working Papers 2013-02, CRESE.
    5. Howell, Bronwyn, 2007. "Financial Risk in Primary Health Care Contracting: Implications for Sector Structure, Ownership and Outcomes," Working Paper Series 19063, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    6. Boone, J. & Schottmuller, C., 2015. "Health Provider Networks, Quality and Costs," Discussion Paper 2015-005, Tilburg University, Center for Economic Research.
    7. Rauch, Peter, 2017. "Developing and evaluating strategies to overcome biomass supply risks," Renewable Energy, Elsevier, vol. 103(C), pages 561-569.
    8. Bourgeon, Jean-Marc & Picard, Pierre & Pouyet, Jerome, 2008. "Providers' affiliation, insurance and collusion," Journal of Banking & Finance, Elsevier, vol. 32(1), pages 170-186, January.
    9. Boone, J. & Schottmuller, C., 2015. "Health Provider Networks, Quality and Costs," Discussion Paper 2015-005, Tilburg University, Center for Economic Research.
    10. Oberender Peter & Zerth Jürgen, 2006. "Soziale Ziele und marktwirtschaftliches Gesundheitswesen - schlußendlich kein Gegensatz! Anmerkungen zum Spannungsfeld von Wettbewerbspolitik und Sozialrecht / Social claims and liberal health care re," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 57(1), pages 261-284, January.
    11. Boone, Jan, 2019. "Health provider networks with private contracts: Is there under-treatment in narrow networks?," Journal of Health Economics, Elsevier, vol. 67(C).
    12. Newhouse, Joseph P. & McWilliams, J. Michael & Price, Mary & Huang, Jie & Fireman, Bruce & Hsu, John, 2013. "Do Medicare Advantage plans select enrollees in higher margin clinical categories?," Journal of Health Economics, Elsevier, vol. 32(6), pages 1278-1288.
    13. Pierre Picard & Kili Wang, 2015. "INSURANCE FRAUD THROUGH COLLUSION BETWEEN POLICYHOLDERS AND CAR DEALERS: THEORY AND EMPIRICAL EVIDENCE Pierre PICARD," Working Papers hal-01140590, HAL.
    14. Howell, Bronwyn, 2007. "Financial Risk in Primary Health Care Contracting: Implications for Sector Structure, Ownership and Outcomes," Working Paper Series 3964, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    15. Maciej Lis, 2016. "Age or time-to-death – what drives health care expenditures? Panel data evidence from the OECD countries," IBS Working Papers 04/2016, Instytut Badan Strukturalnych.
    16. Colleen L. Barry & M. Susan Ridgely, 2008. "Mental health and substance abuse insurance parity for federal employees: How did health plans respond?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 27(1), pages 155-170.
    17. Wu, Vivian Y., 2009. "Managed care's price bargaining with hospitals," Journal of Health Economics, Elsevier, vol. 28(2), pages 350-360, March.
    18. Richard C. Lindrooth & Anthony T. Lo Sasso & Ithai Z. Lurie, 2006. "The effect of distance to provider on employee response to changes in mental health benefits," Health Economics, John Wiley & Sons, Ltd., vol. 15(10), pages 1133-1141, October.
    19. Martha A. Starr & Forrest R. McCluer, 2014. "Prices and Quantities in Health Care Antitrust Damages," Working Papers 2014-03, American University, Department of Economics.

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    More about this item

    Keywords

    HEALTH ; NETWORK ANALYSIS;

    JEL classification:

    • C45 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Neural Networks and Related Topics
    • I10 - Health, Education, and Welfare - - Health - - - General

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