Abstract
Managed care penetration has been partly responsible for slowing down increases in health care costs in recent years. This study uses a 1992–1996 Health Care Utilization Project sample of hospitals to analyze the relationship between managed care penetration in local insurance markets and hospital scale efficiency. After controlling for hospital and market area variables, we find that managed care insurance, particularly the preferred provider type, is associated with increases in hospital scale efficiency in tertiary cases. The results presented here are consistent with the view that managed care can lead to reductions in health cost inflation by controlling the diffusion of technology via improvements in the scale efficiency of hospitals.
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Dr. Pagán is also Director of the Institute for Population Health Policy at The University of Texas-Pan American and Adjunct Senior Fellow of the Leonard Davis Institute of Health Economics at the University of Pennsylvania. Financial support for Dr. Pagán was provided by the Robert Wood Johnson Health and Society Scholars Program. Support for Dr. Brown came from the Hispanic Health Research Center, supported by: NIH CMHD P20 MD000170-03 located at the Brownsville Regional Campus of the University of Texas School of Public Health.
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Brown, H.S., Pagán, J.A. Managed care and the scale efficiency of US hospitals. Int J Health Care Finance Econ 6, 278–289 (2006). https://doi.org/10.1007/s10754-006-9005-4
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DOI: https://doi.org/10.1007/s10754-006-9005-4