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Showing content from https://pubmed.ncbi.nlm.nih.gov/10169101/ below:

The effect of HMOs on fee-for-service health care expenditures: evidence from Medicare

Affiliations

• ¹ Department of Health Research and Policy, Stanford University School of Medicine, CA 94305-5092, USA. baker@osiris.stanford.edu

• PMID: 10169101
• DOI: 10.1016/s0167-6296(96)00535-8

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L C Baker. J Health Econ. 1997 Aug.

• ¹ Department of Health Research and Policy, Stanford University School of Medicine, CA 94305-5092, USA. baker@osiris.stanford.edu

• PMID: 10169101
• DOI: 10.1016/s0167-6296(96)00535-8

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This paper examines the relationship between HMO market share and fee-for-service health care expenditures using 1986-1990 county- and metropolitan statistical area-level data on Medicare expenditures and HMO market share. Fixed-effects estimates imply that fee-for-service expenditures are concave and decreasing in market share. Increases in market share from 20% to 30% are associated with 3-7% expenditure reductions. Instrumental variable estimates that exploit cross-sectional variation in HMO activity also indicate a concave relationship, with expenditures declining in market share for market shares above 15-18%, but imply larger expenditure responses to market share changes.

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