The effect of market structure on HMO premiums.
We examine the effects of HMO market structure on HMO premiums from 1988 to 1991. More competition, measured by the number of HMOs in the market area, reduces HMO premiums. Although this effect does not appear for IPAs before the highest level of competition is reached, it appears throughout the competitive range for Group HMOs. More market penetration, measured by the percent of the market area population enrolled in HMOs, reduces premiums for IPAs. Since the goal of managed competition is to reduce health care costs by creating competition among managed health care plans, our results offer encouragement for managed competition advocates.
Department of Social and Decision Sciences, Carnegie-Mellon University, Pittsburgh, PA 15213, USA.
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Wholey
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Feldman
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Christianson
D002204:Capitation Fee / Q000706:statistics & numerical data*; D003365:Costs and Cost Analysis / Q000706:statistics & numerical data; D003625:Data Collection; D004465:Economic Competition / Q000706:statistics & numerical data*; D006279:Health Maintenance Organizations / Q000191:economics* / Q000706:statistics & numerical data; D006302:Health Services Research; D007193:Independent Practice Associations / Q000191:economics / Q000706:statistics & numerical data; D018803:Models, Economic; D010067:Ownership; D012044:Regression Analysis; D014481:United States