The Role of Hospital Networks in Individual Mortality

Narrow hospital networks have proliferated in health systems with managed care competition. In this paper, we investigate the causal effect of hospital network breadth on patient mortality. We leverage insurer terminations and subsequent hospital terminations for vertically integrated hospitals to identify this effect. We use data from the Colombian healthcare system where the largest health insurer and its hospitals were terminated by the end of 2015. Findings show that broad-network insurers reduce patient mortality because they include high-quality hospitals and can treat more health conditions. Our results suggest that in a setting without price competition, access to health care through a few insurers with broad networks is better for patient health than access to health care through many insurers with narrow networks.

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