Health Plan Conversions: Are They in the Public Interest?
AbstractRecently, not-for-profit health plans have been converting to for-profit status and these conversions have frequently occurred as steps to facilitate merger or acquisition with a for-profit company. Some industry observers attribute these managed care market place trends to an industry shake out resulting from increased competition in the sector. At the same time, the perceived competitive pressures have led to questions about the long run viability of non-profit health plans. Furthermore, some industry and government leaders believe that some non-profits are already conducting themselves like for-profit health plans and question the state premium tax exemption ordinarily accorded to such plans. This paper develops a framework for evaluating health plan conversions and examines related health policy issues through the lens of a case study of the proposed conversion of the CareFirst Blue Cross Blue Shield Company. Analyses demonstrate that CareFirst wields substantial market power in some segments of its local market, that it is unlikely to realize cost savings through expanded economies of scale, and that quality of care appears to be lower in the plans typically acquiring converting health plans.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10127.
Date of creation: Dec 2003
Date of revision:
Publication status: published as Nancy Dean Beaulieu, 2004. "An Economic Analysis of Health Plan Conversions: Are They in the Public Interest?," NBER Chapters, in: Frontiers in Health Policy Research, Volume 7, pages 129-177 National Bureau of Economic Research, Inc.
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Web page: http://www.nber.org
More information through EDIRC
Find related papers by JEL classification:
- I1 - Health, Education, and Welfare - - Health
- L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
This paper has been announced in the following NEP Reports:
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
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 references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.