NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Glenn Melnick

University of Southern California

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NBER Working Papers and Publications

February 2008The Changing Effect of HMO Market Structure: An Analysis of Penetration, Concentration, and Ownership Between 1994-2005
with Yu-Chu Shen, Vivian Wu: w13775
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, increa...

Published: Shen, Y., Wu, V., and Melnick, G. 2010. Trends in Hospital Cost and Revenue, 1994-2005: How Are They Related to HMO Penetration, Concentration and For-Profit Ownership. Health Services Research, 45 (1): 42-61.

January 2006Is Managed Care Still an Effective Cost Containment Device?
with Yu-Chu Shen
in Frontiers in Health Policy Research, Volume 9, David Cutler and Alan Garber, organizers
 
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