IDEAS home Printed from https://ideas.repec.org/a/kap/ijhcfe/v6y2006i4p278-289.html
   My bibliography  Save this article

Managed care and the scale efficiency of US hospitals

Author

Listed:
  • H. Brown
  • José Pagán

Abstract

Managed care penetration has been partly responsible for slowing down increases in health care costs in recent years. This study uses a 1992–1996 Health Care Utilization Project sample of hospitals to analyze the relationship between managed care penetration in local insurance markets and hospital scale efficiency. After controlling for hospital and market area variables, we find that managed care insurance, particularly the preferred provider type, is associated with increases in hospital scale efficiency in tertiary cases. The results presented here are consistent with the view that managed care can lead to reductions in health cost inflation by controlling the diffusion of technology via improvements in the scale efficiency of hospitals. Copyright Springer Science+Business Media, LLC 2006

Suggested Citation

  • H. Brown & José Pagán, 2006. "Managed care and the scale efficiency of US hospitals," International Journal of Health Economics and Management, Springer, vol. 6(4), pages 278-289, December.
    • Handle: RePEc:kap:ijhcfe:v:6:y:2006:i:4:p:278-289
    DOI: 10.1007/s10754-006-9005-4
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s10754-006-9005-4
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s10754-006-9005-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hill, Steven C. & Wolfe, Barbara L., 1997. "Testing the HMO competitive strategy: An analysis of its impact on medical care resources," Journal of Health Economics, Elsevier, vol. 16(3), pages 261-286, June.
    2. Laurence C. Baker & Ciaran S. Phibbs, 2002. "Managed Care, Technology Adoption, and Health Care: The Adoption of Neonatal Intensive Care," RAND Journal of Economics, The RAND Corporation, vol. 33(3), pages 524-548, Autumn.
    3. Newhouse, Joseph P., 1994. "Frontier estimation: How useful a tool for health economics?," Journal of Health Economics, Elsevier, vol. 13(3), pages 317-322, October.
    4. Sherry Glied, 2003. "Health Care Costs: On the Rise Again," Journal of Economic Perspectives, American Economic Association, vol. 17(2), pages 125-148, Spring.
    5. Baker, Laurence C., 2001. "Managed care and technology adoption in health care: evidence from magnetic resonance imaging," Journal of Health Economics, Elsevier, vol. 20(3), pages 395-421, May.
    6. James R. Baumgardner, 1991. "The Interaction between Forms of Insurance Contract and Types of Technical Change in Medical Care," RAND Journal of Economics, The RAND Corporation, vol. 22(1), pages 36-53, Spring.
    7. H. Shelton Brown, 2003. "Managed care and technical efficiency," Health Economics, John Wiley & Sons, Ltd., vol. 12(2), pages 149-158, February.
    8. Laurence C. Baker & Christopher C. Afendulis & Paul A. Heidenreich, 2004. "Managed Care, Information, and Diffusion: The Case of Treatment for Heart-Attack Patients," American Economic Review, American Economic Association, vol. 94(2), pages 347-351, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ng, Ying Chu, 2011. "The productive efficiency of Chinese hospitals," China Economic Review, Elsevier, vol. 22(3), pages 428-439, September.
    2. George Fragkiadakis & Michael Doumpos & Constantin Zopounidis & Christophe Germain, 2016. "Operational and economic efficiency analysis of public hospitals in Greece," Post-Print hal-01414677, HAL.
    3. Fang Hai & Miller Nolan H. & Rizzo John & Zeckhauser Richard, 2011. "Demanding Customers: Consumerist Patients and Quality of Care," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-51, September.
    4. Abdullah M. Alsabah & Hassan Haghparast-Bidgoli & Jolene Skordis, 2020. "Measuring the Efficiency of Public Hospitals in Kuwait: A Two-Stage Data Envelopment Analysis and a Qualitative Survey Study," Global Journal of Health Science, Canadian Center of Science and Education, vol. 12(3), pages 121-121, March.
    5. Kostas Kounetas & Fotis Papathanassopoulos, 2013. "How efficient are Greek hospitals? A case study using a double bootstrap DEA approach," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 14(6), pages 979-994, December.
    6. Mansour Abdullah Almiman, 2021. "Measuring the Efficiency of Public Hospitals in Saudi Arabia Using the Data Envelopment Analysis Approach," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(12), pages 111-111, July.
    7. Mehmet Gok & Erkut Altındağ, 2015. "Analysis of the cost and efficiency relationship: experience in the Turkish pay for performance system," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 16(5), pages 459-469, June.
    8. Zerth Jürgen & Daum Stefanie, 2012. "Budgetbereinigung zwischen Kollektiv- und Selektivvertrag: ökonomische Aspekte aus wettbewerblicher Sicht / Selective Contracting and Collectively Financed Fund: The Way of Appropriate Adjustment," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 232(4), pages 460-481, August.
    9. George Fragkiadakis & Michael Doumpos & Constantin Zopounidis & Christophe Germain, 2016. "Operational and economic efficiency analysis of public hospitals in Greece," Annals of Operations Research, Springer, vol. 247(2), pages 787-806, December.
    10. repec:rre:publsh:v:38:y:2008:i:3:p:381-93 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Karine Lamiraud & Stephane Lhuillery, 2016. "Endogenous Technology Adoption and Medical Costs," Health Economics, John Wiley & Sons, Ltd., vol. 25(9), pages 1123-1147, September.
    2. Shin‐Yi Chou & Jin‐Tan Liu & James K. Hammitt, 2004. "National Health Insurance and Technology Adoption: Evidence from Taiwan," Contemporary Economic Policy, Western Economic Association International, vol. 22(1), pages 26-38, January.
    3. Selder, Astrid, 2005. "Physician reimbursement and technology adoption," Journal of Health Economics, Elsevier, vol. 24(5), pages 907-930, September.
    4. Pedro Pita Barros & Xavier Martínez-Giralt, 2009. "Technological adoption in health care," Working Papers 413, Barcelona School of Economics.
    5. Bokhari, Farasat A.S., 2009. "Managed care competition and the adoption of hospital technology: The case of cardiac catheterization," International Journal of Industrial Organization, Elsevier, vol. 27(2), pages 223-237, March.
    6. Karine Lamiraud & Stéphane Lhuillery, 2015. "Endogenous Technology Adoption and Medical Costs," Working Papers hal-01218064, HAL.
    7. Daron Acemoglu & Amy Finkelstein, 2008. "Input and Technology Choices in Regulated Industries: Evidence from the Health Care Sector," Journal of Political Economy, University of Chicago Press, vol. 116(5), pages 837-880, October.
    8. Mehdi Farsi, 2008. "The temporal variation of cost-efficiency in Switzerland’s hospitals: an application of mixed models," Journal of Productivity Analysis, Springer, vol. 30(2), pages 155-168, October.
    9. Frankovic, Ivan & Kuhn, Michael, 2023. "Health insurance, endogenous medical progress, health expenditure growth, and welfare," Journal of Health Economics, Elsevier, vol. 87(C).
    10. Laurence Baker & Joanne Spetz, 1999. "Managed Care and Medical Technology Growth," NBER Chapters, in: Frontiers in Health Policy Research, volume 2, pages 27-52, National Bureau of Economic Research, Inc.
    11. Yu‐Chu Shen, 2009. "Do HMO and its for‐profit expansion jeopardize the survival of hospital safety net services?," Health Economics, John Wiley & Sons, Ltd., vol. 18(3), pages 305-320, March.
    12. Jos L. T. Blank & Vivian G. Valdmanis, 2015. "Technology diffusion in hospitals: a log odds random effects regression model," International Journal of Health Planning and Management, Wiley Blackwell, vol. 30(3), pages 246-259, July.
    13. Amalia R. Miller & Catherine Tucker, 2018. "Privacy Protection, Personalized Medicine, and Genetic Testing," Management Science, INFORMS, vol. 64(10), pages 4648-4668, October.
    14. Finocchiaro Castro, Massimo & Guccio, Calogero & Pignataro, Giacomo & Rizzo, Ilde, 2014. "The effects of reimbursement mechanisms on medical technology diffusion in the hospital sector in the Italian NHS," Health Policy, Elsevier, vol. 115(2), pages 215-229.
    15. Freedman, Seth & Lin, Haizhen & Simon, Kosali, 2015. "Public health insurance expansions and hospital technology adoption," Journal of Public Economics, Elsevier, vol. 121(C), pages 117-131.
    16. Yevgeniy Feyman & Steven D. Pizer & Austin B. Frakt, 2021. "The persistence of medicare advantage spillovers in the post‐Affordable Care Act era," Health Economics, John Wiley & Sons, Ltd., vol. 30(2), pages 311-327, February.
    17. Daron Acemoglu & Amy Finkelstein & Matthew J. Notowidigdo, 2013. "Income and Health Spending: Evidence from Oil Price Shocks," The Review of Economics and Statistics, MIT Press, vol. 95(4), pages 1079-1095, October.
    18. Elizabeth L. Munnich & Michael R. Richards, 2020. "Treatment flows after outsourcing public insurance provision: Evidence from Florida Medicaid," Health Economics, John Wiley & Sons, Ltd., vol. 29(11), pages 1343-1363, November.
    19. Mehdi Farsi & Massimo Filippini, 2008. "Effects of ownership, subsidization and teaching activities on hospital costs in Switzerland," Health Economics, John Wiley & Sons, Ltd., vol. 17(3), pages 335-350, March.
    20. Yu-Chu Shen & Karen Eggleston, 2009. "The effect of soft budget constraints on access and quality in hospital care," International Journal of Health Economics and Management, Springer, vol. 9(2), pages 211-232, June.

    More about this item

    Keywords

    Hospitals; Managed care; Scale efficiency; I11; L25;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:ijhcfe:v:6:y:2006:i:4:p:278-289. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.