Narrow Network Health Plans: Effects on Access, Cost, Quality, Selection and Bargaining

Health insurers are increasingly offering insurance plans with fewer in-network providers than before, or “narrow network plans.” This recent but rapid trend started in the United States and it is expanding to Europe. Narrow network plans can reduce costs, by leading patients to low cost providers and changing the bargaining power of insurers and providers. However, they could also be harmful for consumers if insurers use them to price-discriminate among consumers and if optimal choice providers are left out of the network. This project aims to study the impacts of the introduction and design of narrow network health insurance plans on access to and quality of health care, costs, selection, and bargaining, for consumers in general and for patients with chronic conditions in particular. We will take advantage of the roll-out of a set of network-based plans by a large national health insurer in the US, which vary along several important dimensions, including network size and coverage and requirements for obtaining care out of network. We will obtain a unique and detailed dataset that spans two years prior through four years after the introduction of the new products, and includes enrollment, demographic, insurance plan characteristics, provider network, and health care claims information. This will allow us to evaluate the impacts of different designs of plans by comparing the choices, outcomes and welfare results of consumers who were offered different sets of choices.