Effect of Market Structure on HMO Financial Performance. Final Report

摘要

The authors study the effect of competition on HMO prices and scale and scopeeconomies. Data for the study come from a national sample of HMOs operating over the period 1988 to 1991. Allow for different effects between Group HMOs, HMOs that contract with multi-specialty physician groups, and IPAs, HMOs that contract with multi-specialty physician groups, and IPAs, HMOs that contract predominantly with independent physicians, because of their fundamentally different organizational structures. The authors find 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 range of competition for Group HMOs. At high levels of competition, more market penetration, measured by the percent of the market of the population enrolled in HMOs, reduces premiums for IPAs. High-penetration markes have lower premiums for Groups at all levels of competition. HMOs have significant scale economies associated with both non-Medicare and Medicare enrollment.