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Health Plan Type Variations in Spells of Health Care Treatment


  • Randall P. Ellis

    () (Boston University)

  • Wenjia Zhu

    (Boston University)


This paper analyzes 30-day “treatment spells†- fixed length periods that commence with a service after a gap in provider contact - to examine how health care utilization and spending of insured employees at large firms are influenced by health plan types. We focus on differences between preferred provider organizations (PPOs) and two recent innovations: plans that feature a narrow panel of providers, and plans that allow free choice of providers but increase demand-side cost sharing: consumer-driven/high-deductible health plans. Health plan effect estimates change dramatically after controlling for endogenous plan type choice, and individual fixed effects. With these controls, narrow panel plans reduce the probability of new treatment spells relative to PPOs by 34 percent with little effect on chronic, repeat visit spells. Visit reductions are more concentrated in less severe conditions in narrow network plans, hence diagnostic coding on the remaining patients increases. We find no evidence that either narrow panel or higher cost sharing plans pay lower prices per procedure or have less intensive treatment given initiation of treatment. With controls, consumer-driven/high-deductible health plans are associated with higher total spending on procedures than PPO plans.

Suggested Citation

  • Randall P. Ellis & Wenjia Zhu, 2015. "Health Plan Type Variations in Spells of Health Care Treatment," Boston University - Department of Economics - Working Papers Series wp2015-022, Boston University - Department of Economics.
  • Handle: RePEc:bos:wpaper:wp2015-022

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    References listed on IDEAS

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    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. Thesis Thursday: Wenjia Zhu
      by Chris Sampson in The Academic Health Economists' Blog on 2018-06-21 06:00:42


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    1. Chenyuan Liu & Justin R. Sydnor, 2018. "Dominated Options in Health-Insurance Plans," NBER Working Papers 24392, National Bureau of Economic Research, Inc.
    2. Denzil G. Fiebig, 2017. "Big Data: Will It Improve Patient-Centered Care?," The Patient: Patient-Centered Outcomes Research, Springer;International Academy of Health Preference Research, vol. 10(2), pages 133-139, April.

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    More about this item


    health care spending; treatment spells; risk adjustment; exclusive provider organizations; consumer driven health plans;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private

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