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:
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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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- Ma, Ching-to Albert, 2004. "Public rationing and private cost incentives," Journal of Public Economics, Elsevier, vol. 88(1-2), pages 333-352, January.
- Pedro Pita Barros & Xavier Martinez-Giralt, 2002.
"Public and Private Provision of Health Care,"
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- Pedro P. Barras & Xavier Martinez-Giralt, . "Public And Private Provision Of Healtch Care," UFAE and IAE Working Papers 438.99, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Martinez-Giralt, Xavier & Pita Barros, Pedro Luis, 2000. "Public and Private Provision of Health Care," CEPR Discussion Papers 2491, C.E.P.R. Discussion Papers.
- Marvel, Howard P. & Yang, Huanxing, 2008. "Group purchasing, nonlinear tariffs, and oligopoly," International Journal of Industrial Organization, Elsevier, vol. 26(5), pages 1090-1105, September.
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