Unbiased Analysis of Today's Healthcare Issues
Social safety net services are necessary, but often unprofitable for hospitals. Is the expansion of HMOs and for-profit hospitals jeopardizing these safety net servies? This is the question researcher Yu-Chu Shen investigates. To test this hypothesis, Shen examines how changes in the market share of HMOs and for-profit HMOs affects probability of shutting down following…
Marketplace reports that UnitedHealth Group has just reached a large settlement with the State of New York. What did UnitedHealth Group do wrong? According to the State of New York, it was overcharging patients who went out of the network. The N.Y. Times gives a good example: “The patient might receive a doctor’s bill for $100,…
Throughout its history, Medicaid provided health insurance for the nation’s poor. It did this by reimbursing providers on a fee-for-service basis. In the 1990s, however, California and other states decided to let private insurance companies bid for the right to provide services for Medicaid patients. These HMOs would receive a fixed per patient per month…
David Whelan chronicles the rise (and possibly future fall) of Medicare Advantage programs in his article “Unfilled Prescription” in Forbes. Earlier laws privatizing Medicare, starting with a pilot program in 1985, were written to give insurance companies only 95% of the money otherwise spent per Medicare member. The insurers were supposed to figure out how…
Doctors often complain that health insurers are squeezing their profit margins. These insurers offer the physicians access to patients as part of their network in exchange for discounted fees. Physicians can decide not to join the network and charge higher prices, but may be left with fewer patients. The bargaining power of the health insurer…
According to the San Diego Union Tribune, yesterday PacifiCare was fined $3.5 million and the California Department of Managed Health Care is seeking up to $1.3 billion in additional penalties for “130,000 alleged claims-processing violations…in California between July 1, 2005, and May 31, 2007.” PacifiCare is the second largest HMO in San Diego and the…
Laurence Baker is a health economist at Stanford’s Center for Health Policy. Much of Mr. Baker’s work has dealt with how HMOs have affected care levels. Today I will briefly review three of Baker’s articles: HMO Penetration and the Cost of Health Care (AER 1996) In this paper, Baker and Corts look how HMO market…
The RAND health insurance experiment (HIE) demonstrated that increasing coinsurance rates decreases medical care utilization. The HIE also found that health outcomes did not vary between individuals with high, low and zero coinsurance rates. A working paper by Chandra, Gruber and McKnight (“Patient Cost Sharing…“) re-examines whether or not this is the case using a…
There is an interesting post at GoozNews (“Getting Doctors to Compete“) in which Merrill Goozner comments on Harvard Business School professor Michael Porter’s belief that competition and integrated care are the solutions to the nation’s health care woes. “Where we need to go is an integrated practice model,” he said. His model entails patient-focused practice…
It has been shown in various studies and opinion polls that consumers generally believe that HMOs provide an inferior level of care than non-HMO plans. This is true even when more objective measures of medical service quality are taken into account. Why is HMO satisfaction so low? A study by Reschovsky, et al. (2002) claims…