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Price competition and hospital cost growth in the United States (1989–1994)
Author(s) -
Bamezai Anil,
Zwanziger Jack,
Melnick Glenn A.,
Mann Joyce M.
Publication year - 1999
Publication title -
health economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.55
H-Index - 109
eISSN - 1099-1050
pISSN - 1057-9230
DOI - 10.1002/(sici)1099-1050(199905)8:3<233::aid-hec406>3.0.co;2-x
Subject(s) - competition (biology) , economics , economic competition , market competition , market economy , ecology , biology
In recent years, most health care markets in the United States (US) have experienced rapid penetration by health maintenance organizations (HMOs) and preferred provider organizations (PPOs). During this same period, the US has also experienced slowing health care costs. Using a national database, we demonstrate that HMOs and PPOs have significantly restrained cost growth among hospitals located in competitive hospital markets, but not so in the case of hospitals located in relatively concentrated markets. In relative terms, we estimate that HMOs have contained cost growth more effectively than PPOs. Copyright © 1999 John Wiley & Sons, Ltd.