Joyce Mann

Price competition and hospital cost growth in the United States (1989–1994)

In recent years, most health care markets in the United States (US) have experienced rapid penetration by health maintenance organizations (HMOs) and preferred provider organizations (PPOs). During this same period, the US has also experienced slowing health care costs. Using a national database, we demonstrate that HMOs and PPOs have significantly restrained cost growth among hospitals located in competitive hospital markets, but not so in the case of hospitals located in relatively concentrated markets. In relative terms, we estimate that HMOs have contained cost growth more effectively than PPOs.

Measures of hospital market structure: a review of the alternatives and a proposed approach

Efforts to evaluate the plethora of recent programs adopted by public and private payers to promote hospital price competition critically depend on the availability of measures of local market structure. To gauge the effects of these policies, researchers must be able to delineate hospital market areas and measure the intensity of competition within these markets. This article reviews alternative methods that have been used to define hospital market areas and measure market structure. We propose an empirical patient origin-based method for measuring hospital market structure. The results of sensitivity analyses using data on California hospitals demonstrate the robustness of our measures over a broad range of parameter values.

A randomized trial to evaluate the effectiveness of a Medicaid HMO

The value of health-care services used by AFDC Medicaid patients receiving care in a voluntary enrollment HMO is contrasted with that of health care services used by Medicaid patients receiving fee-for-service (FFS) care. The randomized assignment of Medicaid recipients to the HMO or to FFS allows the authors to conclude that the apparent lower use of HMO enrollees results from the HMOs selection of patients with lower needs for care rather than from technical efficiency. Patients had lower use while in the HMO, but disenrollees and those who refused enrollment had significantly higher use than FFS participants. In contrast to the effect of HMOs on non-Medicaid populations, the Medicaid HMO studied provided significantly fewer outpatient services, but the same level of inpatient services as the FFS sector. Overall, voluntary enrollment of Medicaid eligibles into the HMO resulted in higher state expenditures for Medicaid because of favorable selection.

Uncompensated Emergency Care in Hospital Markets in Los Angeles County

A survey of hospital emergency rooms in Los Angeles County was conducted in March 1987. Analysis of the distribution of uninsured emergency care patients revealed that private hospitals play a significant frontline role in terms of entry into the hospital system for patients who are unable to pay--almost one-half of such patients were treated in the emergency rooms of private hospitals. Hospitals serving markets in which a higher proportion of residents had incomes below the poverty level provided a greater share of uncompensated emergency room services.