HMO Market Structure and Performance: 1985-1995

Health Affairs

Volumn 16, Issue 6, 1997, Pages 75-84

  Wholey, Douglas R ^a   Christianson, Jon B ^a   Engberg, John ^a   Bryce, Cindy ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

AMBULATORY CARE; ARTICLE; ECONOMIC ASPECT; ECONOMICS; HEALTH CARE COST; HEALTH INSURANCE; HEALTH MAINTENANCE ORGANIZATION; HOSPITALIZATION; HUMAN; MULTIVARIATE ANALYSIS; STATISTICS; UNITED STATES; UTILIZATION REVIEW;

AMBULATORY CARE; ECONOMIC COMPETITION; HEALTH CARE SECTOR; HEALTH MAINTENANCE ORGANIZATIONS; HOSPITALIZATION; HUMANS; INDEPENDENT PRACTICE ASSOCIATIONS; MULTIVARIATE ANALYSIS; UNITED STATES;

EID: 0005716415     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.16.6.75     Document Type: Article

References (26)

1. J.B. Christianson et al.,"The HMO Industry: Evolution in Population Demographics and Market Structure," Medical Care Review 48, no. 1 (1991): 3-46; and InterStudy, The InterStudy Edge and The InterStudy Competitive Edge (St. Paul: InterStudy, 1985-1996).
2. J.B. Christianson et al.,"The HMO Industry: Evolution in Population Demographics and Market Structure," Medical Care Review 48, no. 1 (1991): 3-46; and InterStudy, The InterStudy Edge and The InterStudy Competitive Edge (St. Paul: InterStudy, 1985-1996).
3. P.M. Ellwood et al., "Health Maintenance Strategy," Medical Care 9 (1971): 291-298.
4. A.C. Enthoven, "Competition of Alternative Delivery Systems," in Competition in the Health Care Sector: Past, Present, and Future, ed. W. Greenberg (Germantown, Md.: Aspen Systems Corporation, 1978); and J.B. Christianson and W. McClure, "Competition in the Delivery of Medical Care," The New England Journal of Medicine 301, no. 15 (1979): 812-818.
5. A.C. Enthoven, "Competition of Alternative Delivery Systems," in Competition in the Health Care Sector: Past, Present, and Future, ed. W. Greenberg (Germantown, Md.: Aspen Systems Corporation, 1978); and J.B. Christianson and W. McClure, "Competition in the Delivery of Medical Care," The New England Journal of Medicine 301, no. 15 (1979): 812-818.
6. C. McLaughlin, "Market Responses to HMOs: Price Competition or Rivalry?" Inquiry 25, no. 2 (1988): 207-218.
7. D.R. Wholey, R. Feldman, and J. Christianson, "The Effect of Market Structure on HMO Premiums," Journal of Health Economics 14, no. 1 (1995): 81-105.
8. H.S. Luft, Health Maintenance Organizations: Dimensions of Performance (New York: John Wiley and Sons, 1981); and R.H. Miller and H.S. Luft, "Managed Care Plan Performance since 1980," Journal of the American Medical Association 271, no. 19 (1994): 1512-1519.
9. H.S. Luft, Health Maintenance Organizations: Dimensions of Performance (New York: John Wiley and Sons, 1981); and R.H. Miller and H.S. Luft, "Managed Care Plan Performance since 1980," Journal of the American Medical Association 271, no. 19 (1994): 1512-1519.
10. American International Healthcare, AIH Profile Diskette Version, 1985-1989, Series 85 to 89 (Rockville, Maryland); and Health Care Investment Analysts, HMO Database Diskette Version, 1990-1995 (Baltimore, Maryland).
11. American International Healthcare, AIH Profile Diskette Version, 1985-1989, Series 85 to 89 (Rockville, Maryland); and Health Care Investment Analysts, HMO Database Diskette Version, 1990-1995 (Baltimore, Maryland).
12. HMO market structure measures were developed following the procedure developed by Wholey et al., in "The Effect of Market Structure."
13. Ibid.; and R. Feldman, D.R. Wholey, and J.B. Christianson, "The Effect of Mergers on Health Maintenance Organization Premiums," Health Care Financing Review 17, no. 3 (1996): 171-190. The independent variables are market structure; indicator variables for group, staff, network, and mixed model; for-profit status; federal qualification; national affiliation with an HMO-based national firm; national affiliation with a non-HMO-based firm; affiliation with Blue Cross; and the offering of an open-ended product. Community characteristics are hospital per diem costs, physician charges for an office visit, population density, and per capita income. The data source for community characteristics was the Area Resource File (Rockville, Md.: Bureau of Health Professions, Office of Research and Planning, February 1996).
14. Ibid.; and R. Feldman, D.R. Wholey, and J.B. Christianson, "The Effect of Mergers on Health Maintenance Organization Premiums," Health Care Financing Review 17, no. 3 (1996): 171-190. The independent variables are market structure; indicator variables for group, staff, network, and mixed model; for-profit status; federal qualification; national affiliation with an HMO-based national firm; national affiliation with a non-HMO-based firm; affiliation with Blue Cross; and the offering of an open-ended product. Community characteristics are hospital per diem costs, physician charges for an office visit, population density, and per capita income. The data source for community characteristics was the Area Resource File (Rockville, Md.: Bureau of Health Professions, Office of Research and Planning, February 1996).
15. Ibid.; and R. Feldman, D.R. Wholey, and J.B. Christianson, "The Effect of Mergers on Health Maintenance Organization Premiums," Health Care Financing Review 17, no. 3 (1996): 171-190. The independent variables are market structure; indicator variables for group, staff, network, and mixed model; for-profit status; federal qualification; national affiliation with an HMO-based national firm; national affiliation with a non-HMO-based firm; affiliation with Blue Cross; and the offering of an open-ended product. Community characteristics are hospital per diem costs, physician charges for an office visit, population density, and per capita income. The data source for community characteristics was the Area Resource File (Rockville, Md.: Bureau of Health Professions, Office of Research and Planning, February 1996).
16. We used the natural logarithm of market penetration and number of HMOs to deemphasize the impact of a very few markets with very large numbers of HMOs and very high penetration.
17. In calculating predicted effects of market structure, we used Peter Kennedy's correction where appropriate. P.E. Kennedy, "Estimation with Correctly Interpreted Dummy Variables in Semilogarithmic Equations," American Economic Review 71, no. 4 (1981): 801.
18. On formation rates, see D.R. Wholey, J.B. Christianson, and S. Sanchez, "Professional Reorganization: The Effect of Physician and Corporate Interests on the Formation of Health Maintenance Organizations," American Journal of Sociology 99, no. 1 (1993): 175-211. On structure, see D.R. Wholey and L.R. Burns, "Organizational Transitions: Form Changes by Health Maintenance Organizations," in Research in the Sociology of Organizations, ed. S. Bacharach (Greenwich, Conn.: JAI Press, 1993), 257-293. On failure rates, see D.R. Wholey, J.B. Christianson, and S. Sanchez, "Organizational Size and Failure among Health Maintenance Organizations," American Sociological Review 57, no. 6 (1992): 829-842. On costs and premiums, see D.R. Wholey, R. Feldman, and J. Christianson, "Scale and Scope Economies among HMOs," Journal of Health Economics 15, no. 6 (1996): 657-684. On product differentiation strategies, see D.R. Wholey and J.B. Christianson,. "Product Differentiation among Health Maintenance Organizations: Causes and Consequences of Offering Open-Ended Products," Inquiry 31, no. 1 (1994): 25-39. On mental health services delivery, see D.R. Wholey, J.B. Christianson, and M. Peterson, "Organizing the Delivery of Mental Health Services: Contracting for Mental Health Care by Health Maintenance Organizations," Administration and Policy in Mental Health 23, no. 4 (1996): 307-328; and J.B. Christianson, D.R. Wholey, and M. Peterson, "Strategies for Managing Service Delivery in HMOs: An Application to Mental Health Care," Medical Care Research and Review 54, no. 2 (1997): 200-222. And on hospital contracting, see R. Feldman et al., "Contracts between Hospitals and Health Maintenance Organizations," Health Care Management Review 15, no. 1 (1990): 47-60; and J.E. Kralewski et al., "Strategies Employed by HMOs to Achieve Hospital Discounts: A Case Study of Seven HMOs," Health Care Management Review 16, no. 1 (1991): 9-16.
19. On formation rates, see D.R. Wholey, J.B. Christianson, and S. Sanchez, "Professional Reorganization: The Effect of Physician and Corporate Interests on the Formation of Health Maintenance Organizations," American Journal of Sociology 99, no. 1 (1993): 175-211. On structure, see D.R. Wholey and L.R. Burns, "Organizational Transitions: Form Changes by Health Maintenance Organizations," in Research in the Sociology of Organizations, ed. S. Bacharach (Greenwich, Conn.: JAI Press, 1993), 257-293. On failure rates, see D.R. Wholey, J.B. Christianson, and S. Sanchez, "Organizational Size and Failure among Health Maintenance Organizations," American Sociological Review 57, no. 6 (1992): 829-842. On costs and premiums, see D.R. Wholey, R. Feldman, and J. Christianson, "Scale and Scope Economies among HMOs," Journal of Health Economics 15, no. 6 (1996): 657-684. On product differentiation strategies, see D.R. Wholey and J.B. Christianson,. "Product Differentiation among Health Maintenance Organizations: Causes and Consequences of Offering Open-Ended Products," Inquiry 31, no. 1 (1994): 25-39. On mental health services delivery, see D.R. Wholey, J.B. Christianson, and M. Peterson, "Organizing the Delivery of Mental Health Services: Contracting for Mental Health Care by Health Maintenance Organizations," Administration and Policy in Mental Health 23, no. 4 (1996): 307-328; and J.B. Christianson, D.R. Wholey, and M. Peterson, "Strategies for Managing Service Delivery in HMOs: An Application to Mental Health Care," Medical Care Research and Review 54, no. 2 (1997): 200-222. And on hospital contracting, see R. Feldman et al., "Contracts between Hospitals and Health Maintenance Organizations," Health Care Management Review 15, no. 1 (1990): 47-60; and J.E. Kralewski et al., "Strategies Employed by HMOs to Achieve Hospital Discounts: A Case Study of Seven HMOs," Health Care Management Review 16, no. 1 (1991): 9-16.
20. On formation rates, see D.R. Wholey, J.B. Christianson, and S. Sanchez, "Professional Reorganization: The Effect of Physician and Corporate Interests on the Formation of Health Maintenance Organizations," American Journal of Sociology 99, no. 1 (1993): 175-211. On structure, see D.R. Wholey and L.R. Burns, "Organizational Transitions: Form Changes by Health Maintenance Organizations," in Research in the Sociology of Organizations, ed. S. Bacharach (Greenwich, Conn.: JAI Press, 1993), 257-293. On failure rates, see D.R. Wholey, J.B. Christianson, and S. Sanchez, "Organizational Size and Failure among Health Maintenance Organizations," American Sociological Review 57, no. 6 (1992): 829-842. On costs and premiums, see D.R. Wholey, R. Feldman, and J. Christianson, "Scale and Scope Economies among HMOs," Journal of Health Economics 15, no. 6 (1996): 657-684. On product differentiation strategies, see D.R. Wholey and J.B. Christianson,. "Product Differentiation among Health Maintenance Organizations: Causes and Consequences of Offering Open-Ended Products," Inquiry 31, no. 1 (1994): 25-39. On mental health services delivery, see D.R. Wholey, J.B. Christianson, and M. Peterson, "Organizing the Delivery of Mental Health Services: Contracting for Mental Health Care by Health Maintenance Organizations," Administration and Policy in Mental Health 23, no. 4 (1996): 307-328; and J.B. Christianson, D.R. Wholey, and M. Peterson, "Strategies for Managing Service Delivery in HMOs: An Application to Mental Health Care," Medical Care Research and Review 54, no. 2 (1997): 200-222. And on hospital contracting, see R. Feldman et al., "Contracts between Hospitals and Health Maintenance Organizations," Health Care Management Review 15, no. 1 (1990): 47-60; and J.E. Kralewski et al., "Strategies Employed by HMOs to Achieve Hospital Discounts: A Case Study of Seven HMOs," Health Care Management Review 16, no. 1 (1991): 9-16.
21. On formation rates, see D.R. Wholey, J.B. Christianson, and S. Sanchez, "Professional Reorganization: The Effect of Physician and Corporate Interests on the Formation of Health Maintenance Organizations," American Journal of Sociology 99, no. 1 (1993): 175-211. On structure, see D.R. Wholey and L.R. Burns, "Organizational Transitions: Form Changes by Health Maintenance Organizations," in Research in the Sociology of Organizations, ed. S. Bacharach (Greenwich, Conn.: JAI Press, 1993), 257-293. On failure rates, see D.R. Wholey, J.B. Christianson, and S. Sanchez, "Organizational Size and Failure among Health Maintenance Organizations," American Sociological Review 57, no. 6 (1992): 829-842. On costs and premiums, see D.R. Wholey, R. Feldman, and J. Christianson, "Scale and Scope Economies among HMOs," Journal of Health Economics 15, no. 6 (1996): 657-684. On product differentiation strategies, see D.R. Wholey and J.B. Christianson,. "Product Differentiation among Health Maintenance Organizations: Causes and Consequences of Offering Open-Ended Products," Inquiry 31, no. 1 (1994): 25-39. On mental health services delivery, see D.R. Wholey, J.B. Christianson, and M. Peterson, "Organizing the Delivery of Mental Health Services: Contracting for Mental Health Care by Health Maintenance Organizations," Administration and Policy in Mental Health 23, no. 4 (1996): 307-328; and J.B. Christianson, D.R. Wholey, and M. Peterson, "Strategies for Managing Service Delivery in HMOs: An Application to Mental Health Care," Medical Care Research and Review 54, no. 2 (1997): 200-222. And on hospital contracting, see R. Feldman et al., "Contracts between Hospitals and Health Maintenance Organizations," Health Care Management Review 15, no. 1 (1990): 47-60; and J.E. Kralewski et al., "Strategies Employed by HMOs to Achieve Hospital Discounts: A Case Study of Seven HMOs," Health Care Management Review 16, no. 1 (1991): 9-16.
22. On formation rates, see D.R. Wholey, J.B. Christianson, and S. Sanchez, "Professional Reorganization: The Effect of Physician and Corporate Interests on the Formation of Health Maintenance Organizations," American Journal of Sociology 99, no. 1 (1993): 175-211. On structure, see D.R. Wholey and L.R. Burns, "Organizational Transitions: Form Changes by Health Maintenance Organizations," in Research in the Sociology of Organizations, ed. S. Bacharach (Greenwich, Conn.: JAI Press, 1993), 257-293. On failure rates, see D.R. Wholey, J.B. Christianson, and S. Sanchez, "Organizational Size and Failure among Health Maintenance Organizations," American Sociological Review 57, no. 6 (1992): 829-842. On costs and premiums, see D.R. Wholey, R. Feldman, and J. Christianson, "Scale and Scope Economies among HMOs," Journal of Health Economics 15, no. 6 (1996): 657-684. On product differentiation strategies, see D.R. Wholey and J.B. Christianson,. "Product Differentiation among Health Maintenance Organizations: Causes and Consequences of Offering Open-Ended Products," Inquiry 31, no. 1 (1994): 25-39. On mental health services delivery, see D.R. Wholey, J.B. Christianson, and M. Peterson, "Organizing the Delivery of Mental Health Services: Contracting for Mental Health Care by Health Maintenance Organizations," Administration and Policy in Mental Health 23, no. 4 (1996): 307-328; and J.B. Christianson, D.R. Wholey, and M. Peterson, "Strategies for Managing Service Delivery in HMOs: An Application to Mental Health Care," Medical Care Research and Review 54, no. 2 (1997): 200-222. And on hospital contracting, see R. Feldman et al., "Contracts between Hospitals and Health Maintenance Organizations," Health Care Management Review 15, no. 1 (1990): 47-60; and J.E. Kralewski et al., "Strategies Employed by HMOs to Achieve Hospital Discounts: A Case Study of Seven HMOs," Health Care Management Review 16, no. 1 (1991): 9-16.
23. On formation rates, see D.R. Wholey, J.B. Christianson, and S. Sanchez, "Professional Reorganization: The Effect of Physician and Corporate Interests on the Formation of Health Maintenance Organizations," American Journal of Sociology 99, no. 1 (1993): 175-211. On structure, see D.R. Wholey and L.R. Burns, "Organizational Transitions: Form Changes by Health Maintenance Organizations," in Research in the Sociology of Organizations, ed. S. Bacharach (Greenwich, Conn.: JAI Press, 1993), 257-293. On failure rates, see D.R. Wholey, J.B. Christianson, and S. Sanchez, "Organizational Size and Failure among Health Maintenance Organizations," American Sociological Review 57, no. 6 (1992): 829-842. On costs and premiums, see D.R. Wholey, R. Feldman, and J. Christianson, "Scale and Scope Economies among HMOs," Journal of Health Economics 15, no. 6 (1996): 657-684. On product differentiation strategies, see D.R. Wholey and J.B. Christianson,. "Product Differentiation among Health Maintenance Organizations: Causes and Consequences of Offering Open-Ended Products," Inquiry 31, no. 1 (1994): 25-39. On mental health services delivery, see D.R. Wholey, J.B. Christianson, and M. Peterson, "Organizing the Delivery of Mental Health Services: Contracting for Mental Health Care by Health Maintenance Organizations," Administration and Policy in Mental Health 23, no. 4 (1996): 307-328; and J.B. Christianson, D.R. Wholey, and M. Peterson, "Strategies for Managing Service Delivery in HMOs: An Application to Mental Health Care," Medical Care Research and Review 54, no. 2 (1997): 200-222. And on hospital contracting, see R. Feldman et al., "Contracts between Hospitals and Health Maintenance Organizations," Health Care Management Review 15, no. 1 (1990): 47-60; and J.E. Kralewski et al., "Strategies Employed by HMOs to Achieve Hospital Discounts: A Case Study of Seven HMOs," Health Care Management Review 16, no. 1 (1991): 9-16.
24. On formation rates, see D.R. Wholey, J.B. Christianson, and S. Sanchez, "Professional Reorganization: The Effect of Physician and Corporate Interests on the Formation of Health Maintenance Organizations," American Journal of Sociology 99, no. 1 (1993): 175-211. On structure, see D.R. Wholey and L.R. Burns, "Organizational Transitions: Form Changes by Health Maintenance Organizations," in Research in the Sociology of Organizations, ed. S. Bacharach (Greenwich, Conn.: JAI Press, 1993), 257-293. On failure rates, see D.R. Wholey, J.B. Christianson, and S. Sanchez, "Organizational Size and Failure among Health Maintenance Organizations," American Sociological Review 57, no. 6 (1992): 829-842. On costs and premiums, see D.R. Wholey, R. Feldman, and J. Christianson, "Scale and Scope Economies among HMOs," Journal of Health Economics 15, no. 6 (1996): 657-684. On product differentiation strategies, see D.R. Wholey and J.B. Christianson,. "Product Differentiation among Health Maintenance Organizations: Causes and Consequences of Offering Open-Ended Products," Inquiry 31, no. 1 (1994): 25-39. On mental health services delivery, see D.R. Wholey, J.B. Christianson, and M. Peterson, "Organizing the Delivery of Mental Health Services: Contracting for Mental Health Care by Health Maintenance Organizations," Administration and Policy in Mental Health 23, no. 4 (1996): 307-328; and J.B. Christianson, D.R. Wholey, and M. Peterson, "Strategies for Managing Service Delivery in HMOs: An Application to Mental Health Care," Medical Care Research and Review 54, no. 2 (1997): 200-222. And on hospital contracting, see R. Feldman et al., "Contracts between Hospitals and Health Maintenance Organizations," Health Care Management Review 15, no. 1 (1990): 47-60; and J.E. Kralewski et al., "Strategies Employed by HMOs to Achieve Hospital Discounts: A Case Study of Seven HMOs," Health Care Management Review 16, no. 1 (1991): 9-16.
25. On formation rates, see D.R. Wholey, J.B. Christianson, and S. Sanchez, "Professional Reorganization: The Effect of Physician and Corporate Interests on the Formation of Health Maintenance Organizations," American Journal of Sociology 99, no. 1 (1993): 175-211. On structure, see D.R. Wholey and L.R. Burns, "Organizational Transitions: Form Changes by Health Maintenance Organizations," in Research in the Sociology of Organizations, ed. S. Bacharach (Greenwich, Conn.: JAI Press, 1993), 257-293. On failure rates, see D.R. Wholey, J.B. Christianson, and S. Sanchez, "Organizational Size and Failure among Health Maintenance Organizations," American Sociological Review 57, no. 6 (1992): 829-842. On costs and premiums, see D.R. Wholey, R. Feldman, and J. Christianson, "Scale and Scope Economies among HMOs," Journal of Health Economics 15, no. 6 (1996): 657-684. On product differentiation strategies, see D.R. Wholey and J.B. Christianson,. "Product Differentiation among Health Maintenance Organizations: Causes and Consequences of Offering Open-Ended Products," Inquiry 31, no. 1 (1994): 25-39. On mental health services delivery, see D.R. Wholey, J.B. Christianson, and M. Peterson, "Organizing the Delivery of Mental Health Services: Contracting for Mental Health Care by Health Maintenance Organizations," Administration and Policy in Mental Health 23, no. 4 (1996): 307-328; and J.B. Christianson, D.R. Wholey, and M. Peterson, "Strategies for Managing Service Delivery in HMOs: An Application to Mental Health Care," Medical Care Research and Review 54, no. 2 (1997): 200-222. And on hospital contracting, see R. Feldman et al., "Contracts between Hospitals and Health Maintenance Organizations," Health Care Management Review 15, no. 1 (1990): 47-60; and J.E. Kralewski et al., "Strategies Employed by HMOs to Achieve Hospital Discounts: A Case Study of Seven HMOs," Health Care Management Review 16, no. 1 (1991): 9-16.
26. On formation rates, see D.R. Wholey, J.B. Christianson, and S. Sanchez, "Professional Reorganization: The Effect of Physician and Corporate Interests on the Formation of Health Maintenance Organizations," American Journal of Sociology 99, no. 1 (1993): 175-211. On structure, see D.R. Wholey and L.R. Burns, "Organizational Transitions: Form Changes by Health Maintenance Organizations," in Research in the Sociology of Organizations, ed. S. Bacharach (Greenwich, Conn.: JAI Press, 1993), 257-293. On failure rates, see D.R. Wholey, J.B. Christianson, and S. Sanchez, "Organizational Size and Failure among Health Maintenance Organizations," American Sociological Review 57, no. 6 (1992): 829-842. On costs and premiums, see D.R. Wholey, R. Feldman, and J. Christianson, "Scale and Scope Economies among HMOs," Journal of Health Economics 15, no. 6 (1996): 657-684. On product differentiation strategies, see D.R. Wholey and J.B. Christianson,. "Product Differentiation among Health Maintenance Organizations: Causes and Consequences of Offering Open-Ended Products," Inquiry 31, no. 1 (1994): 25-39. On mental health services delivery, see D.R. Wholey, J.B. Christianson, and M. Peterson, "Organizing the Delivery of Mental Health Services: Contracting for Mental Health Care by Health Maintenance Organizations," Administration and Policy in Mental Health 23, no. 4 (1996): 307-328; and J.B. Christianson, D.R. Wholey, and M. Peterson, "Strategies for Managing Service Delivery in HMOs: An Application to Mental Health Care," Medical Care Research and Review 54, no. 2 (1997): 200-222. And on hospital contracting, see R. Feldman et al., "Contracts between Hospitals and Health Maintenance Organizations," Health Care Management Review 15, no. 1 (1990): 47-60; and J.E. Kralewski et al., "Strategies Employed by HMOs to Achieve Hospital Discounts: A Case Study of Seven HMOs," Health Care Management Review 16, no. 1 (1991): 9-16.