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Managed Care Incentives and Inpatient Complications

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  • Philip A. Haile
  • Rebecca M. Stein

Abstract

Managed care organizations control costs through restrictions on patient access to specialized services, oversight of treatment protocols, and financial incentives for providers. We investigate possible effects of such practices on the care patients receive by studying frequencies of in‐hospital complications. We find significant differences in complication rates between managed care and fee‐for‐service patients. We investigate the sources of this variation by comparing probabilities of complications among patients with different types of managed care coverage and patients treated in different hospitals. For several patient categories, the differences in outcomes we find appear to arise not from differential treatment of patients within hospitals or from heterogeneity in patients, but from variations in care across hospitals that tend to treat patients with different insurance types.

Suggested Citation

  • Philip A. Haile & Rebecca M. Stein, 2002. "Managed Care Incentives and Inpatient Complications," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 11(1), pages 37-79, March.
    • Handle: RePEc:bla:jemstr:v:11:y:2002:i:1:p:37-79
    DOI: 10.1111/j.1430-9134.2002.00037.x
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    1. Cutler, David M, 1995. "The Incidence of Adverse Medical Outcomes under Prospective Payment," Econometrica, Econometric Society, vol. 63(1), pages 29-50, January.
    2. McClellan, Mark & Cutler, David & Newhous, Joseph P., 2000. "How Does Managed Care Do It?," Scholarly Articles 2643884, Harvard University Department of Economics.
    3. Levinson, Arik & Ullman, Frank, 1998. "Medicaid managed care and infant health," Journal of Health Economics, Elsevier, vol. 17(3), pages 351-368, June.
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    Cited by:

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    2. Richard C. Lindrooth & Gloria J. Bazzoli & Jan Clement, 2007. "The Effect of Reimbursement on the Intensity of Hospital Services," Southern Economic Journal, John Wiley & Sons, vol. 73(3), pages 575-587, January.

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