Essays on consumer behavior in health care

Consumer use of information and whether consumers make decisions that are in their own best interest have important implications for the quality and efficiency of the health care system.;The first essay in this dissertation (with Meredith Rosenthal) considers consumer experience with tiered physician networks (TPNs), which use financial incentives and quality information to encourage consumers to seek care from "preferred" physicians. We developed a survey to assess consumer's awareness, use and trust of these networks included in health plans offered by the Massachusetts Group Insurance Commission. Half of respondents reported prior knowledge of the TPN and one-fifth knew which tier one of their doctors is in. Respondents who learned their doctor's tier before their first visit were more likely to find this information important.;The second essay analyzes how consumers value TPNs relative to information from other sources. In the consumer survey described above we randomized respondents to hypothetical TPNs that varied according to the co-payment and the physician specialty. We find that implementing TPNs with co-payments ranging from ;The third essay (with Richard Hirth) analyzes the health plan choices made by employees when the set of health plans offered by their employer included a dominated plan. During the study period, approximately one-third of workers were enrolled in the dominated plan. For some this choice may be explained by inertia, i.e., selecting the plan before it was dominated and failing to switch out of it. However, a substantial number of employees actively chose the dominated plan when they had an unambiguously better choice. This evidence casts doubt on consumer rationality in health insurance choice, and suggests that health reform based heavily on consumer choice may not lead to efficient outcomes.