Learn More
We estimate a bargaining model of competition between hospitals and managed care organizations (MCOs) and use the estimates to evaluate the effects of hospital mergers. We find that MCO bargaining restrains hospital prices significantly. The model demonstrates the potential impact of coinsurance rates, which allow MCOs to partly steer patients towards(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)
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)
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)
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)
This paper investigates the impact of Medicare HMO penetration on the medical care expenditures incurred by Medicare fee-for-service (FFS) enrollees. We find that increasing penetration leads to reduced spending on FFS beneficiaries. In particular, our estimates suggest that the increase in HMO penetration during our study period led to approximately a 7%(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)
This article describes issues that should be considered in the development of a theory or theories about incentives from which testable hypotheses could be derived. Economic, psychological, and organizational theories are described, and issues that should be considered in hypothesis generation are presented. Psychological factors influencing incentives(More)