Hospital Network Competition and Adverse Selection: Evidence From the Massachusetts health Insurance Exchange

Published June 12, 2019

Shepard writes, “these plans attract consumers loyal to the star hospitals and who tend to use their high-price care when sick. Using a structural model, I show that selection creates a strong incentive to exclude star hospitals but that standard policy solutions do not improve net welfare. A key reason is the connection between selection and moral hazard in star hospital use.”