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We develop a framework for analyzing bargaining relationships between hospitals and HMOs under selective contracting. Using a unique dataset on hospitals in the Los Angeles area from 1990 to 1993, we estimate the determinants of actual negotiated prices paid to hospitals by two major HMOs. We find that a hospital's bargaining power, and thus its price,(More)
OBJECTIVE To estimate the effects of competition for both Medicare and HMO patients on the quality decisions of hospitals in Southern California. DATA SOURCE Secondary discharge data from the Office of Statewide Health Planning and Development for the State of California for the period 1989-1993. STUDY DESIGN Outcome variables are the risk-adjusted(More)
We estimate the welfare associated with the Medicare HMO program, now known as Medicare+Choice (M+C). We find that the creation of the M+C program resulted in approximately $15.6 billion in consumer surplus and $52 billion in profits from 1993 to 2000 (in 2000 dollars). This program most likely generated significant net social welfare. However, we find that(More)
Mortality rates are a widely used measure of hospital quality. A central problem with this measure is selection bias: simply put, severely ill patients may choose high quality hospitals. We control for severity of illness with an instrumental variables (IV) framework using geographic location data. We use IV to examine the quality of pneumonia care in(More)
The US health care sector is large and growing – health care spending in 2011 amounted to $2.7 trillion and 18% of GDP. Approximately half of health care output is allocated via markets. In this paper, we analyze the industrial organization literature on health care markets focusing on the impact of competition on price, quality and treatment decisions for(More)
Lower extremity peripheral arterial disease (PAD) is prevalent in the Medicare population and is associated with high rates of myocardial infarction, stroke, amputation, and death. Nevertheless, national health expenditures for PAD are not known. We hypothesized that PAD-related costs are high, increase with age, and that treatment rates would be less than(More)
Improving participation in preventive activities will require finding methods to encourage consumers to engage in and remain in such efforts. This review assesses the effects of economic incentives on consumers' preventive health behaviors. A study was classified as complex preventive health if a sustained behavior change was required of the consumer; if it(More)
A systematic review of the randomized trial literature examining the impact of financial incentives on provider preventive care delivery was conducted. English-language studies published between 1966 and 2002 that addressed primary or secondary preventive care or health promotion behaviors were included in the review. Six studies that met the inclusion(More)
We present a dynamic model of the hospital industry in which nonprofit and for-profit hospitals coexist and compete and are differentiated by their objective functions, investment technologies, and taxation rates. In our model, patients differ by income and type of insurance coverage, and choose admission to their preferred hospital, while hospitals choose(More)
OBJECTIVE We evaluate the effects of the Nursing Home Quality Initiative (NHQI), which introduced quality measures to the Centers for Medicare and Medicaid Services' Nursing Home Compare website, on facility performance and consumer demand for services. DATA SOURCES The nursing home Minimum Data Set facility reports from 1999 to 2005 merged with(More)