American Economic Review: Insights
ISSN 2640-205X (Print) | ISSN 2640-2068 (Online)
Exogenous Exits, Market Structure, and Equilibrium Contracts in Health Care
American Economic Review: Insights
(pp. 325–39)
Abstract
This paper quantifies the causal effects of exogenous health insurer exits on contract structure and health care market outcomes, proposing market concentration as a likely mechanism for these effects. Leveraging the termination of the largest health insurer in Colombia, I find that the use of fee-for-service contracts increased after the termination relative to capitation contracts. Treatment effects are larger in markets with higher provider than insurer concentration at baseline. Results suggest that equilibrium contracts place the financial risk on insurers in markets where providers have higher bargaining leverage.Citation
Serna, Natalia. 2025. "Exogenous Exits, Market Structure, and Equilibrium Contracts in Health Care." American Economic Review: Insights 7 (3): 325–39. DOI: 10.1257/aeri.20240155Additional Materials
JEL Classification
- D86 Economics of Contract: Theory
- G22 Insurance; Insurance Companies; Actuarial Studies
- I13 Health Insurance, Public and Private
- I18 Health: Government Policy; Regulation; Public Health
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O16 Economic Development: Financial Markets; Saving and Capital Investment; Corporate Finance and Governance