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Managed care and the scale efficiency of US hospitals

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  • 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

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File URL: http://hdl.handle.net/10.1007/s10754-006-9005-4
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Bibliographic Info

Article provided by Springer in its journal International Journal of Health Care Finance and Economics.

Volume (Year): 6 (2006)
Issue (Month): 4 (December)
Pages: 278-289

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Handle: RePEc:kap:ijhcfe:v:6:y:2006:i:4:p:278-289

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Web page: http://www.springerlink.com/link.asp?id=106603

Related research

Keywords: Hospitals; Managed care; Scale efficiency; I11; L25;

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References

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  1. 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.
  2. H. Shelton Brown, 2003. "Managed care and technical efficiency," Health Economics, John Wiley & Sons, Ltd., vol. 12(2), pages 149-158.
  3. 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.
  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. 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.
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Cited by:
  1. Hai Fang & Nolan H. Miller & John A. Rizzo & Richard J. Zeckhauser, 2008. "Demanding Customers: Consumerist Patients and Quality of Care," NBER Working Papers 14350, National Bureau of Economic Research, Inc.
  2. 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, vol. 14(6), pages 979-994, December.
  3. Juergen Zerth & Stefanie Daum, 2012. "Budgetbereinigung zwischen Kollektiv- und Selektivvertrag: oekonomische Aspekte aus wettbewerblicher Sicht," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 232(4), pages 460-481, July.
  4. Ng, Ying Chu, 2011. "The productive efficiency of Chinese hospitals," China Economic Review, Elsevier, vol. 22(3), pages 428-439, September.

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