The Effect of Managed Care on Health Care Providers, Issue 5987
National Bureau of Economic Research, 1997 - Managed care plans (Medical care). - 30 pages
We investigate the effect of managed care on the health care system, focusing on the effects managed care could have on the number and types of health care providers and their efficiency. By influencing providers, managed care may change the structure and performance of the entire health care system in ways that influence care provided to all patients. We begin by discussing the mechanisms by which managed care influences health care providers, concentrating on shifts in market demand and increases in the amount of attention paid to price in provider choices. We develop a theoretical framework that illustrates these effects. We then empirically examine the relationship between managed care activity and mammography providers. We find evidence that increases in HMO activity are associated with changes in the number of providers, the volume of services produced by each provider, and the prices they charge. This evidence is consistent with the view that HMOs can have broad effects on health care providers
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associated with increases average charges average cost curve dependent variable diagnostic mammography effect of HMOs effects of managed enrollees enrollment equation examined the relationship excluded instruments F-statistic facility characteristics fixed costs HCSA health care providers health care services health care system health insurance HMO activity HMO enabling law HMO market share increases in HMO increases in managed instrumental variables mammograms per machine mammograms per month mammograms performed mammography facilities mammography machine mammography providers managed care activity managed care organizations managed care patients marginal cost monopolistically competitive month per machine NBER Working Papers number of facilities number of mammograms number of mammography number of providers number of sites number of units Ob/gyns OLS estimates overidentifying restrictions physicians population profitability relationship between HMO screening charges search for low-priced service area share are associated stage regression symmetric equilibrium total number traditionally-insured patients World Wide Web YM and Yt