IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/10437.html
   My bibliography  Save this paper

Managed Care Discounting: Evidence from the MarketScan Database

Author

Listed:
  • Avi Dor
  • Siran M. Koroukian
  • Michael Grossman

Abstract

The paper examines price discounting by health maintenance organizations and preferred provider organizations in markets for hospital services. Our empirical analysis focuses on transaction prices for angioplasty, which is a relatively common procedure, with well defined 'product' characteristics. After controlling for patient and procedure heterogeneity and market power we find that on average prices for PPOs are 8% lower than fee-for-service plans, followed by point-of-service HMOs who capture a 24% discount. Our results are in general agreement with earlier work that shows that managed care discounts are 'real', after accounting for process of care.

Suggested Citation

  • Avi Dor & Siran M. Koroukian & Michael Grossman, 2004. "Managed Care Discounting: Evidence from the MarketScan Database," NBER Working Papers 10437, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:10437
    Note: HE
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w10437.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Keeler, Emmett B. & Melnick, Glenn & Zwanziger, Jack, 1999. "The changing effects of competition on non-profit and for-profit hospital pricing behavior," Journal of Health Economics, Elsevier, vol. 18(1), pages 69-86, January.
    2. Wholey, Douglas & Feldman, Roger & Christianson, Jon B., 1995. "The effect of market structure on HMO premiums," Journal of Health Economics, Elsevier, vol. 14(1), pages 81-105, May.
    3. Mark B. McClellan & Douglas O. Staiger, 2000. "Comparing Hospital Quality at For-Profit and Not- for-Profit Hospitals," NBER Chapters, in: The Changing Hospital Industry: Comparing Not-for-Profit and For-Profit Institutions, pages 93-112, National Bureau of Economic Research, Inc.
    4. Mark McClellan & Douglas Staiger, 1999. "The Quality of Health Care Providers," NBER Working Papers 7327, National Bureau of Economic Research, Inc.
    5. Brooks, John M. & Dor, Avi & Wong, Herbert S., 1997. "Hospital-insurer bargaining: An empirical investigation of appendectomy pricing," Journal of Health Economics, Elsevier, vol. 16(4), pages 417-434, August.
    6. Melnick, Glenn A. & Zwanziger, Jack & Bamezai, Anil & Pattison, Robert, 1992. "The effects of market structure and bargaining position on hospital prices," Journal of Health Economics, Elsevier, vol. 11(3), pages 217-233, October.
    7. Goldman, Fred & Grossman, Michael, 1978. "The Demand for Pediatric Care: An Hedonic Approach," Journal of Political Economy, University of Chicago Press, vol. 86(2), pages 259-280, April.
    8. Dranove, David & Ludwick, Richard, 1999. "Competition and pricing by nonprofit hospitals: a reassessment of Lynk's analysis," Journal of Health Economics, Elsevier, vol. 18(1), pages 87-98, January.
    9. Dranove, David & Shanley, Mark & White, William D, 1993. "Price and Concentration in Hospital Markets: The Switch from Patient-Driven to Payer-Driven Competition," Journal of Law and Economics, University of Chicago Press, vol. 36(1), pages 179-204, April.
    10. McClellan, Mark & Cutler, David & Newhous, Joseph P., 2000. "How Does Managed Care Do It?," Scholarly Articles 2643884, Harvard University Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Berden, Carolien & Croes, R. & Kemp, R. & Mikkers, Misja & van der Noll, Rob & Shestalova, V. & Svitak, Jan, 2019. "Hospital Competition in the Netherlands : An Empirical Investigation," Other publications TiSEM 5302ab6a-9099-4b5d-9874-8, Tilburg University, School of Economics and Management.
    2. Michael A. Morrisey & Alice M. Rivlin & Richard P. Nathan & Mark A. Hall, 2017. "Five‐State Study of ACA Marketplace Competition: A Summary Report," Risk Management and Insurance Review, American Risk and Insurance Association, vol. 20(2), pages 153-172, September.
    3. Berden, Carolien & Croes, R. & Kemp, R. & Mikkers, Misja & van der Noll, Rob & Shestalova, V. & Svitak, Jan, 2019. "Hospital Competition in the Netherlands : An Empirical Investigation," Discussion Paper 2019-008, Tilburg University, Tilburg Law and Economic Center.
    4. Berden, Carolien & Croes, R. & Kemp, R. & Mikkers, Misja & van der Noll, Rob & Shestalova, V. & Svitak, Jan, 2019. "Hospital Competition in the Netherlands : An Empirical Investigation," Other publications TiSEM e30db5a4-5c1c-450b-8f1d-6, Tilburg University, School of Economics and Management.
    5. Avi Dor & William Encinosa & Kathleen Carey, 2016. "Do Good Reports Mean Higher Prices? The Impact of Hospital Compare Ratings on Cardiac Pricing," NBER Working Papers 22858, National Bureau of Economic Research, Inc.
    6. David Bardey & Jean‐Charles Rochet, 2010. "Competition Among Health Plans: A Two‐Sided Market Approach," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 19(2), pages 435-451, June.
    7. Avi Dor & Partha Deb & Michael Grossman & Gregory Cooper & Siran Koroukian & Fang Xu, 2013. "Impact of Mortality-Based Performance Measures on Hospital Pricing: the Case of Colon Cancer Surgeries," NBER Working Papers 19447, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:10437. See general 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: (). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.