The effect of market structure on HMO premiums

Article Abstract:

A study was conducted to determine the effects of the health maintenance organization (HMO) market structure on HMO premiums from 1988 to 1991. The results show that more competition, measured by the number of HMOs in a market area, drives HMO premiums down. Premiums at group HMOs felt the price pressure throughout the competition range, while Independent Practice Associations (IPA) felt the price pressure only at the highest level of competition. Market penetration, measured by the percentage of enrollment of the market population, also reduced IPA premiums. The results provide support for managed competition in HMOs as a way of reducing health care costs.

Research, Competition (Economics), Prices and rates

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What does the demand curve for medical care measure?

Article Abstract:

The willingness of patients to pay for health care is a valid way of assessing consumer surplus, and though consumers' behaviour will change on the basis of mdeical information received, their decisions are unlikely to correlate exactly with the advice of experts. The best way to measure consumer welfare is through assessing how consumers value medical advice, rather than assessing the advice itself. It would also be more efficient to provide consumers with more information, rather than with more insurance, in order to tackle the problem of consumer ignorance.

Social aspects, Supply and demand, Medical care, Physicians, Medical professions

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Scale and scope economies among health maintenance organizations

Article Abstract:

An examination of scale and scope economies amid Group and IPA Health Maintenance Organizations (HMOs) revealed that HMOs gain from economies of scale. Moreover, huge Group HMOs gain more from economies of scale than do huge IPA HMOs. A generalized translog multiproduct cost function was utilized to assess HMO costs as the said function imposes fewer limitations than other functional specifications.

Management, Economies of scale

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