Do health insurers contract the best providers?: Provider networks, quality, and costs

摘要: We provide a modeling framework to analyze selective contracting in the health-care sector. Two providers differ quality and costs. When buying health insurance, consumers observe neither provider nor derive an equilibrium where insurers signal through their choice of network. Selective focuses on low-cost providers. Contracting both signals high quality. Market power reduces scope for signaling, thereby leading lower inefficiency.