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Competition in Health Care Markets and Vertical Restraints

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Author Info

  • Baranes, E.
  • Bardey, D.

Abstract

This paper studies competition between Managed Care Organizations (MCOs) and Conventional Insurers. Most of the time, MCOs sign exclusive contracts with providers and these vertical restrictions associated to differentiation in the providers’ market imply a risk segmentation. Taking into account this phenomenon, we show that vertical restrictions in the health insurance sector can paradoxically create an anti-raise rivals’ cost effect in which MCOs’ penetration allows to decrease conventional insurers’ premiums.

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File URL: http://www.laser.univ-montp1.fr/Cahiers/cahier130404.pdf
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Bibliographic Info

Paper provided by LASER (Laboratoire de Science Economique de Richter), Faculty of Economics, University of Montpellier 1 in its series Cahiers du LASER (LASER Working Papers) with number 2004.13.

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Length: 17 pages
Date of creation: 2004
Date of revision:
Handle: RePEc:mop:lasrwp:2004.13

Contact details of provider:
Postal: Université de Montpellier 1, Faculté des Sciences Economiques, LASER, Rue Raymond Dugrand - Espace Richter, CS 79606, 34960 Montpellier Cedex 2, France
Web page: http://www.laser.univ-montp1.fr
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Related research

Keywords: VERTICAL RESTRAINTS ; MANAGED CARE ; COMPETITION POLICY.;

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Cited by:
  1. Martin Gaynor & Robert J Town, 2012. "Competition in Health Care Markets," The Centre for Market and Public Organisation 12/282, Department of Economics, University of Bristol, UK.

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