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Do Hmo Plans Reduce Health Care Expenditure In The Private Sector?

Author

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  • JAEUN SHIN
  • SANGHO MOON

Abstract

The cost containment performance of health maintenance organization (HMO) plans relative to non‐HMOs is examined using data from the 2000 Medical Expenditure Panel Survey. When various compounding factors are controlled for, among the privately insured, nonelderly population, HMO enrollment is found to contain neither total health care spending nor total insurance payment, though it reduces total out‐of‐pocket expenditure. We further find that this result is not attributed to selectivity in health plan choice due to health risk. The favorable cost sharing for enrollees and the distinct reimbursement schemes in HMO plans seem to account for no significant overall cost saving. (JEL I11, C25)

Suggested Citation

  • Jaeun Shin & Sangho Moon, 2007. "Do Hmo Plans Reduce Health Care Expenditure In The Private Sector?," Economic Inquiry, Western Economic Association International, vol. 45(1), pages 82-99, January.
    • Handle: RePEc:bla:ecinqu:v:45:y:2007:i:1:p:82-99
    DOI: 10.1093/ei-cbl008
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    Cited by:

    1. Stefan Meyer, 2016. "Obesity and Health-Care Costs in Switzerland: Dealing with Endogeneity in Non-Linear Regression Models," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 152(3), pages 243-286, July.
    2. Terza, Joseph V. & Basu, Anirban & Rathouz, Paul J., 2008. "Two-stage residual inclusion estimation: Addressing endogeneity in health econometric modeling," Journal of Health Economics, Elsevier, vol. 27(3), pages 531-543, May.
    3. Chantal Grandchamp & Lucien Gardiol, 2011. "Does a mandatory telemedicine call prior to visiting a physician reduce costs or simply attract good risks?," Health Economics, John Wiley & Sons, Ltd., vol. 20(10), pages 1257-1267, October.
    4. Boyer, Robert, 2015. "L’essor du secteur de la santé annonce-t-il un modèle de développement anthropogénétique ?," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 17.
    5. Anjani Kumar & Ashok K. Mishra & Sunil Saroj & Vinay K. Sonkar & Ganesh Thapa & Pramod K. Joshi, 2020. "Food safety measures and food security of smallholder dairy farmers: Empirical evidence from Bihar, India," Agribusiness, John Wiley & Sons, Ltd., vol. 36(3), pages 363-384, June.
    6. Chantal Grandchamp & Lucien Gardiol, 2008. "Does a mandatory telemedicine call prior to visiting a physician reduce costs or simply attract good risks?," Working Papers 0801, University of Lausanne, Institute of Health Economics and Management (IEMS).
    7. Miller, Cristina D. M. & Mishra, Ashok K., 2022. "Health Insurance Coverage, Government Payments, and Labor Allocation," IZA Discussion Papers 15262, Institute of Labor Economics (IZA).
    8. World Bank, 2009. "Europe and Central Asia - Health insurance and competition," World Bank Publications - Reports 3064, The World Bank Group.
    9. Hai Fang & John Rizzo, 2010. "Has the influence of managed care waned? Evidence from the market for physician services," International Journal of Health Economics and Management, Springer, vol. 10(1), pages 85-103, March.
    10. Mishra, Ashok K. & Villacis, Alexis H. & Miller, Cristina D. M., 2022. "Market Facilitation Program Payments, Employer-Sponsored Health Insurance Coverage and Off-Farm Employment," IZA Discussion Papers 15834, Institute of Labor Economics (IZA).
    11. Mishra, Ashok K. & Harris, Michael & Bampasidou, Maria, 2018. "Health Insurance Coverage and Labor Allocation of Beginning Farm Operator Households," 2018 Annual Meeting, August 5-7, Washington, D.C. 274172, Agricultural and Applied Economics Association.
    12. Humphreys, Brad & Nyman, John & Ruseski, Jane, 2011. "The Effect of Gambling on Health: Evidence from Canada," Working Papers 2011-18, University of Alberta, Department of Economics.
    13. Stefan J Meyer, 2016. "Obesity and Health-Care Costs in Switzerland: Dealing with Endogeneity in Non-Linear Regression Models," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 152(III), pages 243-286, September.

    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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