Buyer Alliances and Managed Competition
AbstractIn a health insurance market, a large employer or an organized "buyer alliance" is in a position to influence the design of plans offered to its members. We study how the sponsors of buyer alliances manage competition among insurance firms by focusing on their choices of the format of competition, the number of firms allowed to compete, and the quality of care offered by the firms. We find deviations from optimality in all three dimensions. Specifically, we find a tendency toward too many firms and too much quality, and a bias toward a format involving the prescreening of insurance plans by the sponsor. Copyright (c) 1997 Massachusetts Institute of Technology.
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Bibliographic InfoPaper provided by Wisconsin Madison - Social Systems in its series Working papers with number 9527.
Length: 26 pages
Date of creation: 1995
Date of revision:
Contact details of provider:
Postal: UNIVERSITY OF WISCONSIN MADISON, SOCIAL SYSTEMS RESEARCH INSTITUTE(S.S.R.I.), MADISON WISCONSIN 53706 U.S.A.
COMPETITION; HEALTH; INSURANCE;
Other versions of this item:
- I10 - Health, Education, and Welfare - - Health - - - General
- I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
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- Martinez-Giralt, Xavier & Pita Barros, Pedro Luis, 2000.
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