Competition in the market of health insurance and health care utilization
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This dissertation examines the determinants of competition and consumer access in the health care market, and supply- and demand-side determinants of health care use under the Affordable Care Act (ACA). The first essay studies insurer entry into the federally-facilitated health insurance market under the ACA. Motivated by the fact that insurers’ service areas can be subsets of rating areas, and the substantial variation in plan composition within a rating area, I explore variations in the type of plans offered and insurers’ decisions to enter a rating area. I find that availability of medical providers, population size, and metropolitan status are important in insurers’ decisions to enter a rating area. Medical cost affects the entry of restricted network plans. The second essay examines how supply-side incentives affect treatment choice for depression. Using claims data from Florida’s Medicaid program, I find large variations in initiating antidepressant treatment among newly diagnosed patients with three plan types: Fee-for-Service (FFS), Primary Care Case Management (PCCMs) and Accountable Care Organizations (ACOs). Compared to FFS, PCCMs and ACOs are more likely to provide antidepressant but no office-based care. I use the control function approach to mitigate the self-selection bias and find that ACOs tend to use lower cost medication options. Despite the use of low-cost alternatives for ACOs, no differences are found in subsequent psychiatric hospitalization or emergency room visits among plans. Different provider contractual relationships may partially explain treatment choice differences. The third essay investigates whether the ACA policy of free preventive services affects utilization of preventive care. I use variation in commercially-insured enrollees to examine the demand and supply prices of four preventive services. Despite an average 53 percentage point decrease in demand prices for these services, the actual service use only increased by 17 percent from 2007 to 2011, possibly due to little or no change in prices paid to providers. Using risk adjustment tools to predict and control for patient underlying health status, I find similar changes in demand prices and rates of service use across six health plan types, consistent with preventive visits being provider rather than consumer choices.