The Econometric Society is pleased to announce that the 2020 Frisch Medal selection committee of Steven Berry (Chair), Marianne Bertrand, and Stephen Redding has awarded this year’s Frisch Medal of the Econometric Society to Kate Ho and Robin Lee for their paper, "Insurer Competition in Health Care Markets”, (Econometrica, Vol. 85, No. 2, March 2017, 379-417).
First awarded in 1978, the Frisch Medal is presented biennially for the best applied (empirical or theoretical) paper published in Econometrica during the previous five years.The award was presented by Econometric Society President, Orazio Attanasio, on August 17, 2020 at the Econometric Society and Bocconi University Virtual World Congress.
The committee wrote the following citation:
“In their paper, “Insurer Competition in Health Care Markets,” Kate Ho and Robin Lee tackle important questions of countervailing power in regulated markets. Ho and Lee masterfully combine rich data, appropriate theory and sophisticated econometrics to examine the complicated price negotiations over payments from insurers to hospitals, on one side, and to insurers from an employer, on the other side. Their methodology is a culmination of long progress in the study of health care market equilibrium, allowing them to consider rich empirical patterns of response to a counterfactual decrease in insurer competition. They show the importance of modeling bargaining power on both sides, which can result in surprisingly complex changes in premiums and payments to hospitals. In a setting where theory cannot a priori predict the welfare effects of changes in insurer competition, they find that reduced competition typically does reduce overall consumer welfare, in part by restricting consumer choice. These results are important for health care merger policy and they will guide further research on important markets with countervailing power."