The Changing Effect of HMO Market Structure: An Analysis of Penetration, Concentration, and Ownership Between 1994-2005 / Yu-Chu Shen, Vivian Wu, Glenn Melnick.

Format:

Book

Author/Creator:

Shen, Yu-Chu.

Contributor:

National Bureau of Economic Research.

Wu, Vivian.

Melnick, Glenn.

Series:

Working Paper Series (National Bureau of Economic Research) no. w13775.

NBER working paper series no. w13775

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

The Changing Effect of HMO Market Structure

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2008.

Summary:

We analyze the role of three aspects of HMO market structure -- HMO penetration, HMO plan concentration, and HMO for-profit share on explaining hospital cost and revenue growth during the HMO expansion period (1994-1999) and backlash period (2000-2005). We find that HMO penetration effects differ over time: a 10 percentage point increase in HMO enrollment leads to 2.5 percent reduction in cost and revenues in the expansion period but only 0.4-1 percent reduction in the backlash period. Furthermore, this HMO backlash effect can be attributed to HMO dis-enrollment as well as the changing nature of HMO product. We find that revenue increases at a slower rate (by about 5 percent) in markets with relatively concentrated HMO markets power and more competitive hospital markets. Finally, increased for-profit HMO presence is associated with smaller cost and revenue growth, and the effect differs between low and high penetration markets.

Notes:

Print version record

February 2008.