The impact of HMO penetration on the rate of hospital cost inflation, 1985-1993

Article Abstract:

The rise of enrollment among health maintenance organizations was instrumental in reducing hospital cost inflation during the 1985-1993 period. Although the reduction rate in hospital inflation varied over the period examined, it was established that the trend can be attributed to the transformation of HMOs from a non-profit entity to a for-profit network. Results revealed that areas with high HMO penetration recorded hospital expenses that are 2.3% lower compared to areas with low HMO enrollment. From 1992 to 1993, hospital inflation was reduced by .34 to 3.40 percentage points as a result of HMO growth.

Medical care, Cost of, Health care costs

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Economic and organizational determinants of HMO mergers and failures

Article Abstract:

Mergers between health maintenance organizations (HMO) were undertaken beginning in the 1980s to minimize the operating costs and optimize markets of the merging organizations. However, HMO mergers are negatively perceived as creating more inefficient organizations that are prone to failure for lack of competition. An analysis of HMO performance in terms of enrollment and profitability found that large and profitable HMOs benefited from merging, while smaller HMOs and those existing in markets with high penetration were more likely to fail.

Mergers, acquisitions and divestments, Health care industry, Acquisitions and mergers

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Do Medicare HMOs cost shift?

Article Abstract:

Health maintenance organizations (HMOs) have not transferred costs from Medicare to commercial premiums. HMOs are often accused of increasing their commercial premiums when Medicare pay less. This occurrence is termed "cost shifting" and is hypercritically looked upon by economists. Cost shifting occurs when hospital management charge more for regular patients to "compensate for" low Medicare payments. Moreover, state regulations that require HMOs to provide low premiums have also been found to endanger HMO's financial viability.

Administration of Public Health Programs, Health Care Services, Management, Medical care, Medicare, Cost shifting (Medical care)

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