TY  - JOUR
AU  - Born,Patricia
AU  - Pacula,Rosalie Liccardo
TI  - Does Spending on Medical Services Change as HMOs Grow and Mature?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6423
PY  - 1998
Y2  - February 1998
UR  - http://www.nber.org/papers/w6423
L1  - http://www.nber.org/papers/w6423.pdf
N1  - Author contact info:
Patricia Born

Rosalie Liccardo Pacula
RAND Corporation
1776 Main Street
P.O. Box 2138
Santa Monica, CA 90407-2138
Tel: 310/393-0411 ext. 6494
Fax: 858/350-8798
E-Mail: pacula@rand.org
AB  - This research examines the cost structure of a nationally representative sample of HMOs from 1991-1994 to determine whether cost savings achieved through enrollment growth and age of the plan are shared with any of the factors of production.  The data are obtained from Health Care Investment Analysts.  A generalized translog cost function is used to derive factor share equations for four intermediate groups of inputs used by an HMO: physician services, other medical provider services, hospital services and administrative services.  We estimate the system of annual factor shares using seemingly unrelated regression analysis and find that both plan size and age have a significantly positive effect on the level of plan expenditure on physicians, other medical providers and hospitals.  Examination of the changes in factor shares over time, however, indicates that large changes in membership have no significant effect on the amount of resources dedicated to physicians.  Only hospitals see a significant increase in the change in factor share at the expense of administrative services.
ER  -