Skip to main content
SpringerLink
Log in

Managed care or carefully managed? Management of underwriting profitability by health insurers

  • Published:
The Geneva Papers on Risk and Insurance - Issues and Practice Aims and scope Submit manuscript

Abstract

Managed care provides health insurers a unique opportunity for discretion over certain aspects of financial reporting. Specifically, managed care mechanisms provide health insurers with a stronger ability to engage in loss control. To test whether and how health insurers exploit their ability to manage losses, we examine whether insurers with greater opportunity to manage care report significantly better underwriting performance in the fourth quarter relative to other health insurers. Using quarterly statutory filings from 2003 to 2016, we find evidence that a health insurer’s share of enrollment in health maintenance organisation (HMO) plans, characterised by their use of ‘gatekeeper’ physicians, is significantly and negatively related to their reported fourth quarter medical loss ratio (MLR). Additionally, while we find that fourth quarter MLRs are higher for all health insurers following the implementation of the Patient Protection and Affordable Care Act (ACA), the ACA does not appear to have intensified the loss control efforts of those insurers with more enrollment in HMO plans.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1

Similar content being viewed by others

Notes

  1. An HMO plan dictates which ‘in-network’ providers may be used, and which services may be rendered. If the enrollee receives services outside of this contracted arrangement, payment on services is not rendered. Indemnity plans and other forms of managed care allow more flexibility for enrollees, and therefore a lower degree of control for insurers. For example, enrollees are not subject to the gatekeeper mechanism nor are they barred from receiving reimbursement, albeit often at a lower rate, on services rendered ‘out-of-network’ for most other managed care plans.

  2. Prior studies examining the moral hazard consequences associated with individuals and families having met their annual deductible include Manning and Marquis (1996), Eichner (1998), Einav et al. (2013), Aron-Dine et al. (2015) and Brot-Goldberg et al. (2017).

  3. As managed care plans have grown over the last few decades, indemnity or fee-for-service plans have become all but obsolete in the U.S. market. In the group market, traditional indemnity plans represent one percent of plan types whereas, on average, HMOs plans represent over half of the market, alongside other types of managed care plans (Kaiser Family Foundation 2019).

  4. Point of Service (POS) plans may also use a gatekeeper mechanism. However, these plans provide some coverage for out-of-network services which limits their ability to control losses. Our study focuses on HMO plans because these insurers have more absolute control over claims.

  5. Of the USD 3.2 trillion spend on healthcare in 2016, private health insurance plans paid out USD 1.1 trillion on healthcare, Medicaid programs paid out USD 565.5 billion and Medicare spending totaled USD 672.1 billion (Hartman et al. 2018).

  6. For a review of the U.S. health insurance market, including a discussion on the growth of managed care and the implications for the market, see Cutler and Zeckhauser (2000).

  7. Other managed care mechanisms include the selection and organisation of provider networks and profiling of physicians to encourage cost-effective provision of services. See Glied (2000) for a comprehensive review of these mechanisms.

  8. In a study conducted in 1998, 57% of physicians surveyed reported that they felt pressure from the health insurer to limit referrals, and 38% reported that their compensation included some type of incentive in the form of a bonus (Grumbach et al. 1998).

  9. Mays et al. (2003) report that health plans in the early 2000s were increasingly seeking cost savings through new provider networks, payment systems and referral practices.

  10. Leone and Van Horn (2005) find that non-profit hospitals adjust discretionary spending to manage earnings and significant use of discretionary accruals to meet earnings objectives. Eldenberg et al. (2011) find real activities manipulation in the non-profit hospital context, including a decrease in non-operating and non-revenue-generating expenditures. Barniv et al. (2000) find a significant decline in capital expenditures following Medicare regulation and that this could have negative long-term effects on public health.

  11. From 2014 through 2018, a tax penalty was imposed on those who did not furnish such proof. The Tax Cuts and Jobs Act (2017) eliminated the tax penalty, effective 1 January 2019, though an unpenalised mandate still exists.

  12. As of March 2019, two thirds of all Medicaid enrollees are serviced by a Medicaid managed care organisation (MCO), which is a private market health insurer required to file statutory statements to state regulators. Only five states do not utilise MCOs in the process of executing state Medicaid objectives. See Rudowitz et al. (2018) for more details regarding the current state of the Medicaid programme.

  13. Insurers operating in the individual market reported lower performance after the exchanges opened in 2014. MLRs and losses per enrollee were significantly higher in the post-reform period and administrative expenses were significantly lower (Born and Sirmans 2018).

  14. It was the individual/small group market exchanges and Medicaid expansion, not the individual mandate, that explain coverage gains in the post-ACA period (Frean et al. 2017).

  15. See Patient Protection and Affordable Care Act (ACA) (2010). In Sec. 2701, mandated adjusted community rating dictates rating of plans in the individual and small group markets “with respect to the premium rate charged by a health insurance issuer for health insurance coverage offered in the individual or small group market—such a rate shall vary with respect to the particular plan or coverage involved only by (i) whether such plan or coverage covers an individual or family; (ii) rating area; (iii) age; and (iv) tobacco use.” In Sec. 2704, the use of medical underwriting is banned through the prohibition of pre-existing condition exclusions, “a group health plan and a health insurance issuer offering group or individual health insurance coverage may not impose any preexisting condition exclusion with respect to such plan or coverage.”

  16. See Born and Sirmans (2020) for evidence of adverse selection in the individual and group markets post-ACA.

  17. There are several confounding factors that make direct tests related to the ACA’s MLR requirement difficult in our setting. First, the ACA’s MLR provision is administered at the insurer-state-year-line level, while we are examining aggregate insurer-level data. Second, the ACA’s MLR calculation includes components (i.e., quality improvement expenses) that are not reported prior to the ACA, making reproduction of a comparable MLR impossible. Third, the accounting treatment of incurred claims under statutory filings are different compared to reporting requirements for MLR purposes. Finally, while statutory data is reported on a calendar-year basis, MLR reports are not due until 31 March, meaning that the incentive to manipulate reported MLRs in response to MLR regulations would not appear in the fourth quarter. Therefore, while we acknowledge that MLR regulation changed during our sample period, we do not explicitly test for how this regulation influenced MLRs reported in statutory accounting statements.

  18. The provisions discussed above suggest that health insurers have reasons to significantly change their operations and control losses post-ACA enactment. However, we recognise that the ACA also offers new opportunities for health insurers to manage risk, particularly in the individual and small group markets through state-level programmes such as the permanent risk adjustment programme, which began in 2014 and the temporary risk corridors and reinsurance programmes which were in effect from 2014 through 2016. The state-level risk adjustment programme redistributes funds from lower-risk plans to higher-risk plans in the individual and small group markets both on- and off-exchanges through payments from plans with lower actuarial risk made to plans with higher actuarial risk. The temporary state-level reinsurance programme provided payments to plans with higher-cost enrollees in the individual market from a reinsurance fund to which all health insurance issuers and self-insured plans contributed. Finally, the temporary state-level risk corridors programme limits the losses and gains of Qualified Health Plans offered on the exchanges. See Cox et al. (2016) for a comprehensive review of these three programmes.

  19. While a profit-maximising insurer will be incentivised to manage utilisation regardless of the quarter, we argue that this perspective ignores both costs of utilisation management as well as issues regarding timing. Since utilisation management is costly (e.g. additional effort, potential reputational concerns) insurers will not intensively manage utilisation in all cases. Insurers, therefore, may only want to ramp up utilisation management when it can provide a benefit. As losses occur and are reported throughout the year, the insurer will gain information on how their performance has turned out. By waiting until the beginning of the fourth quarter to decide whether to manage utilisation (or whether they even want to), insurers can minimise potential costs while still gaining potential accounting benefits.

  20. One potential concern in our study is whether managed care organisations (i.e. HMOs) have systematically different deductibles compared to PPOs. However, according to the Employer Health Benefits Survey of 2019, produced by Kaiser Family Foundation, the average deductible in a single coverage plan was USD 1200 for an HMO and USD 1,206 for a PPO plan. Thus, at least in single coverage plans, deductibles appear to be similar for HMOs and PPOs. While, the average deductible with family coverage for those in an aggregate structure do appear to differ (USD 861 vs. USD 1091), there is little difference in family coverage with separate per-person structure (USD 2905 vs. USD 2883). Based on this report, the assumption in our paper that HMOs and PPOs have similar deductibles seems reasonable.

  21. Data on enrollment are from page 17, Exhibit 1—Enrollment by Product Type for Health Business Only in the annual statutory statement.

  22. We define ‘total member months’ as all member months aside from member months in ‘PSO’ or ‘Other’ plans. Our results are robust to including PSO and Other member months in the denominator of HMO Percent.

  23. Unlike our Mutual variable, there is no direct measure in insurer statutory statements to identify if an insurer is publicly traded. We, therefore, determine whether a group is publicly traded using data from Schedule Y Part 1, which provides information on the entire group structure for insurers. We attempt to merge this data to the merged CRSP/Compustat database (where a firm must be publicly traded if it has data in CRSP) using employer identification numbers (which are present in both Schedule Y Part 1 and Compustat). If a firm has a match, we treat it as being publicly traded.

  24. Our results are also robust if we calculate HMO Percenti,t defining managed care as the percent of member months in both HMO and POS plans.

  25. In untabluated tests, we also weigh each observation by total member months. Our main results are unchanged.

  26. We also estimate this model with bootstrapped standard errors as well as with insurer fixed effects. In both cases, the results are quantitatively similar. These results are available on request.

  27. For robustness, we estimate this model without controlling for MLR Q1, MLR Q2 and MLR Q3. Results are quantitatively similar. The results are available on request.

  28. Even though the act was passed in 2010 and the implementation of certain provisions were staggered, minimum MLR requirements went into effect in 2011. Since minimum MLR requirements could impact fourth quarter MLRs, we define the ACA as beginning in 2011. For robustness, we re-define ACA as one if the year is 2014 or later, since 2014 represents implementation of some of the primary provisions of the ACA, including the opening of the online exchanges for individual and small group markets and the expansion of Medicaid. The results of this exercise are qualitatively similar and are available from the authors upon request.

  29. ACA Trend is equal to 0 for all years prior to 2011, 1 in 2011, 2 in 2012, 3 in in 2013, 4 in 2014, 5 in 2015, and 6 in 2016 (the final year of our sample). Unlike our binary variable (ACA), this variable construction acknowledges that the staggered introduction of certain provisions could have differential effects over time.

References

  • Arlen, J., and W.B. MacLeod. 2005. Torts, expertise, and authority: Liability of physicians and managed care organizations. RAND Journal of Economics 36 (3): 494–519.

    Google Scholar 

  • Aron-Dine, A., L. Einav, A. Finkelstein, and M. Cullen. 2015. Moral hazard in health insurance: Do dynamic incentives matter? Review of Economics and Statistics 97 (4): 725–741.

    Article  Google Scholar 

  • Baicker, K., S.L. Taubman, H.L. Allen, M. Bernstein, J.H. Gruber, J.P. Newhouse, E.C. Schneider, B.J. Wright, A.M. Zaslavsky, and A.N. Finkelstein. 2013. The Oregon experiment—effects of Medicaid on clinical outcomes. New England Journal of Medicine 368 (18): 1713–1722.

    Article  Google Scholar 

  • Barbaresco, S., C.J. Courtemanche, and Y. Qi. 2015. Impacts of the Affordable Care Act dependent coverage provision on health-related outcomes of young adults. Journal of Health Economics 40: 54–68.

    Article  Google Scholar 

  • Barniv, R., K. Danvers, and J. Healy. 2000. The impact of Medicare capital prospective payment regulation on hospital capital expenditures. Journal of Accounting and Public Policy 19 (1): 9–40.

    Article  Google Scholar 

  • Beaver, W.H., M.F. McNichols, and K.K. Nelson. 2003. Management of the loss reserve accrual and the distribution of earnings in the property-casualty insurance industry. Journal of Accounting and Economics 35 (3): 347–376.

    Article  Google Scholar 

  • Belina, H., K. Surysekar, and M. Weismann. 2019. On the medical loss ratio (MLR) and sticky selling general and administrative costs: Evidence from health insurers. Journal of Accounting and Public Policy 38 (1): 53–61.

    Article  Google Scholar 

  • Beneish, M.D. 2001. Earnings management: A perspective. Managerial Finance 27 (12): 3–17.

    Article  Google Scholar 

  • Berry-Stölzle, T.R., E.M. Eastman, and X. Jianren. 2018. CEO overconfidence and earnings management: Evidence from property-liability insurers’ loss reserves. North American Actuarial Journal 22 (3): 380–404.

    Article  Google Scholar 

  • Born, P., and C. Geckler. 1998. HMO quality and financial performance: Is there a connection? Journal of Health Care Finance 24 (2): 65–77.

    Google Scholar 

  • Born, P.H., and C.J. Simon. 2001. Patients and profits: The relationship between HMO financial performance and quality of care. Health Affairs 20 (2): 167–174.

    Article  Google Scholar 

  • Born, P.H., and E.T. Sirmans. 2020. Restrictive rating and adverse selection in health insurance. Journal of Risk and Insurance 87 (4): 919–933.

    Article  Google Scholar 

  • Born, P.H., and E. Sirmans. 2018. Individual market underwriting profitability in health insurance. Journal of Insurance Regulation 37 (7).

  • Boterenbrood, R. 2014. Income smoothing by Dutch hospitals. Journal of Accounting and Public Policy 33 (5): 510–524.

    Article  Google Scholar 

  • Brockett, P., L. Golden, C.C. Yang, and D. Young. 2021. Medicaid managed care: Efficiency, medical loss ratio, and quality of care. North American Actuarial Journal 25 (1): 1–16.

    Article  Google Scholar 

  • Brot-Goldberg, Z.C., A. Chandra, B.R. Handel, and J.T. Kolstad. 2017. What does a deductible do? The impact of cost-sharing on health care prices, quantities, and spending dynamics. The Quarterly Journal of Economics 132 (3): 1261–1318.

    Article  Google Scholar 

  • Bryce, H.J. 1994. Profitability of HMOs: Does non-profit status make a difference? Health Policy 28 (3): 197–210.

    Article  Google Scholar 

  • Buchmueller, T., and J. DiNardo. 2002. Did community rating induce an adverse selection death spiral? Evidence from New York, Pennsylvania, and Connecticut. American Economic Review 92 (1): 280–294.

    Article  Google Scholar 

  • Callaghan, S.R., E. Plummer, and W.F. Wempe. 2020. Health insurers’ claims and premiums under the Affordable Care Act: Evidence on the effects of bright line regulations. Journal of Risk and Insurance 87 (1): 67–93.

    Article  Google Scholar 

  • Cicala, S., E.M.J. Lieber, and V. Marone. 2019. Regulating markups in us health insurance. American Economic Journal: Applied Economics 11 (4): 71–104.

    Google Scholar 

  • Cohen, D.A., and P. Zarowin. 2010. Accrual-based and real earnings management activities around seasoned equity offerings. Journal of Accounting and Economics 50 (1): 2–19.

    Article  Google Scholar 

  • Cox, C., A. Semanskee, G. Claxton, and L. Levitt. 2016. Explaining health care reform: Risk adjustment, reinsurance, and risk corridors. Henry J. Kaiser Family Foundation.

  • Cutler, D.M., and R.J. Zeckhauser. 2000. The anatomy of health insurance. In Handbook of Health Economics, vol. 1, 563–643. Elsevier.

  • Dafny, L.S. 2010. Are health insurance markets competitive? American Economic Review 100 (4): 1399–1431.

    Article  Google Scholar 

  • Dechow, P., W. Ge, and C. Schrand. 2010. Understanding earnings quality: A review of the proxies, their determinants and their consequences. Journal of Accounting and Economics 50 (2–3): 344–401.

    Article  Google Scholar 

  • Degeorge, F., J. Patel, and R. Zeckhauser. 1999. Earnings management to exceed thresholds. Journal of Business 72 (1): 1–33.

    Article  Google Scholar 

  • Dhaliwal, D.S., C.A. Gleason, and L.F. Mills. 2004. Last-chance earnings management: Using the tax expense to meet analysts’ forecasts. Contemporary Accounting Research 21 (2): 431–459.

    Article  Google Scholar 

  • Eastman, E.M., D.L. Eckles, and A. Van Buskirk. 2021. Accounting-based regulation: Evidence from health insurers and the Affordable Care Act. The Accounting Review 96 (2): 231–259.

    Article  Google Scholar 

  • Eichner, M.J. 1998. The demand for medical care: What people pay does matter. American Economic Review 88 (2): 117–121.

    Google Scholar 

  • Einav, L., A. Finkelstein, S.P. Ryan, P. Schrimpf, and M.R. Cullen. 2013. Selection on moral hazard in health insurance. American Economic Review 103 (1): 178–219.

    Article  Google Scholar 

  • Eldenburg, L.G., K.A. Gunny, K.W. Hee, and N. Soderstrom. 2011. Earnings management using real activities: Evidence from nonprofit hospitals. The Accounting Review 86 (5): 1605–1630.

    Article  Google Scholar 

  • Foster, G. 1977. Quarterly accounting data: Time-series properties and predictive-ability results. The Accounting Review 1–21.

  • Frean, M., J. Gruber, and B.D. Sommers. 2017. Premium subsidies, the mandate, and Medicaid expansion: Coverage effects of the Affordable Care Act. Journal of Health Economics 53: 72–86.

    Article  Google Scholar 

  • Glied, S. 2000. Managed care. In Handbook of health economics, vol. 1, 707–753. Elsevier.

  • Grace, M.F., and J.T. Leverty. 2010. Political cost incentives for managing the property-liability insurer loss reserve. Journal of Accounting Research 48 (1): 21–49.

    Article  Google Scholar 

  • Grumbach, K., D. Osmond, K. Vranizan, D. Jaffe, and A.B. Bindman. 1998. Primary care physicians’ experience of financial incentives in managed-care systems. New England Journal of Medicine 339 (21): 1516–1521.

    Article  Google Scholar 

  • Hall, M.A. 1988. Institutional control of physician behavior: Legal barriers to health care cost containment. University of Pa. Law of Review 137: 431.

    Article  Google Scholar 

  • Hall, M.A. 1989. The malpractice standard under health care cost containment. Law, Medicine and Health Care 17 (4): 347–355.

    Article  Google Scholar 

  • Hall, M.A., B. Zheng, E. Dugan, F. Camacho, K.E. Kidd, A. Mishra, and R. Balkrishnan. 2002. Measuring patients’ trust in their primary care providers. Medical Care Research and Review 59 (3): 293–318.

    Article  Google Scholar 

  • Havighurst, C.C. 2000. Vicarious liability: Relocating responsibility for the quality of medical care. American Journal of Law & Medicine 26: 7.

    Article  Google Scholar 

  • Harrington, S.E. 2010. US health-care reform: The patient protection and affordable care act. Journal of Risk and Insurance 77 (3): 703–708.

    Article  Google Scholar 

  • Hartman, M., A.B. M., N. Espinosa, A. Catlin, and National Health Expenditure Accounts Team. 2018. National health care spending in 2016: Spending and enrollment growth slow after initial coverage expansions. Health Affairs 37 (1): 150–160.

    Article  Google Scholar 

  • Healy, P.M., and J.M. Wahlen. 1999. A review of the earnings management literature and its implications for standard setting. Accounting Horizons 13 (4): 365–383.

    Article  Google Scholar 

  • Hellinger, F.J. 1995. Selection bias in HMOs and PPOs: A review of the evidence. Inquiry 135–142.

  • Hellinger, F.J. 1998. The effect of managed care on quality: A review of recent evidence. Archives of Internal Medicine 158 (8): 833–841.

    Article  Google Scholar 

  • Higgins, M.L., and P.D. Thistle. 2000. Capacity constraints and the dynamics of underwriting profits. Economic Inquiry 38 (3): 442–457.

    Article  Google Scholar 

  • Hurley, R.E., B.C. Strunk, and J.S. White. 2004. The puzzling popularity of the PPO. Health Affairs 23 (2): 56–68.

    Article  Google Scholar 

  • Jacobson, C.K. 1994. Investor response to health care cost containment legislation: Is American health policy designed to fail? Academy of Management Journal 37 (2): 440–452.

    Article  Google Scholar 

  • Jacob, J., and B.N. Jorgensen. 2007. Earnings management and accounting income aggregation. Journal of Accounting and Economics 43 (2–3): 369–390.

    Article  Google Scholar 

  • Kaiser Family Foundation. 2019. Employer health benefits 2019 annual survey. http://files.kff.org/attachment/Report-Employer-Health-Benefits-Annual-Survey-2019. Accessed 17 Feb 2021.

  • Leone, A.J., and R.L. Van Horn. 2005. How do nonprofit hospitals manage earnings? Journal of Health Economics 24 (4): 815–837.

    Article  Google Scholar 

  • Manning, W.G., and M.S. Marquis. 1996. Health insurance: The tradeoff between risk pooling and moral hazard. Journal of Health Economics 15 (5): 609–639.

    Article  Google Scholar 

  • Mayers, D., and C.W. Smith, Jr. 1981. Contractual provisions, organizational structure, and conflict control in insurance markets. Journal of Business 54 (3): 407–434.

    Article  Google Scholar 

  • Mays, G.P., R.E. Hurley, and J.M. Grossman. 2003. An empty toolbox? Changes in health plans’ approaches for managing costs and care. Health Services Research 38 (1–2): 375–393.

    Article  Google Scholar 

  • Mechanic, D., and M. Schlesinger. 1996. The impact of managed care on patients’ trust in medical care and their physicians. Journal of the American Medical Association 275 (21): 1693–1697.

    Article  Google Scholar 

  • Mensah, Y.M., J.M. Considine, and L. Oakes. 1994. Statutory insolvency regulations and earnings management in the prepaid health-care industry. The Accounting Review 70–95.

  • Miller, R.H., and H.S. Luft. 1994. Managed care plan performance since 1980: A literature analysis. Journal of the American Medical Association 271 (19): 1512–1519.

    Article  Google Scholar 

  • Miller, R.H., and H.S. Luft. 1997. Does managed care lead to better or worse quality of care? Health Affairs 16 (5): 7–25.

    Article  Google Scholar 

  • Miller, R.H., and H.S. Luft. 2002. HMO plan performance update: An analysis of the literature, 1997–2001. Health Affairs 21 (4): 63–86.

    Article  Google Scholar 

  • Mittelstaedt, H.F., W.D. Nichols, and P.R. Regier. 1995. SFAS No. 106 and benefit reductions in employer-sponsored retiree health care plans. The Accounting Review 70 (4): 535–556.

    Google Scholar 

  • National Association of Insurance Commissioners. 2011. Adverse selection issues and health insurance exchanges under the Affordable Care Act. https://www.naic.org/store/free/ASE-OP.pdf. Accessed 5 July 2018.

  • Nelson, K.K. 2000. Rate regulation, competition, and loss reserve discounting by property-casualty insurers. The Accounting Review 75 (1): 115–138.

    Article  Google Scholar 

  • Protection, Patient, and Affordable Care Act. 2010. Patient protection and affordable care act. Public Law 111 (48): 759–762.

    Google Scholar 

  • Pauly, M.V. 1998. Managed care, market power, and monopsony. Health Services Research 33 (5 Pt 2): 1439.

    Google Scholar 

  • Petroni, K.R. 1992. Optimistic reporting in the property-casualty insurance industry. Journal of Accounting and Economics 15 (4): 485–508.

    Article  Google Scholar 

  • Roychowdhury, S. 2006. Earnings management through real activities manipulation. Journal of Accounting and Economics 42 (3): 335–370.

    Article  Google Scholar 

  • Rudowitz, R., R. Garfield, and E. Hinton. 2018. 10 things to know about Medicaid: Setting the facts straight. Kaiser Family Foundation 12. https://www.kff.org/medicaid/issue-brief/10-things-to-know-about-medicaid-setting-the-facts-straight/. Accessed 7 March 2019.

  • Scanlon, D.P., and M. Chernew. 2000. Managed care and performance measurement: Implications for insurance markets. North American Actuarial Journal 4 (2): 128–138.

    Article  Google Scholar 

  • Schessler, C.E. 1992. Liability implications of utilization review as a cost containment mechanism. Journal of Contemporary Health Law and Policy 8: 379.

    Google Scholar 

  • Schield, J., J.J. Murphy, and H.J. Bolnick. 2001. Evaluating managed care effectiveness: A societal perspective. North American Actuarial Journal 5 (4): 95–111.

    Article  Google Scholar 

  • Simonet, D. 2005. Patient satisfaction under managed care. International Journal of Health Care Quality Assurance 18 (6): 424–440.

    Article  Google Scholar 

  • Sommers, B.D., M.Z. Gunja, K. Finegold, and T. Musco. 2015. Changes in self-reported insurance coverage, access to care, and health under the Affordable Care Act. Journal of the American Medical Association 314 (4): 366–374.

    Article  Google Scholar 

  • Strange, M.L., and J.R. Ezzell. 2000. Valuation effects of health cost containment measures. Journal of Health Care Finance 27 (1): 54–66.

    Google Scholar 

  • Tax Cuts and Jobs Act. 2017. Tax cuts and job act. Public Law. 2017. No. 115-97.

  • Vansant, B. 2016. Institutional pressures to provide social benefits and the earnings management behavior of nonprofits: Evidence from the US hospital industry. Contemporary Accounting Research 33 (4): 1576–1600.

    Article  Google Scholar 

  • Weech-Maldonado, R. 2002. Impact of HMO mergers and acquisitions on financial performance. Journal of Health Care Finance 29 (2): 64–64.

    Google Scholar 

  • Winter, R.A. 1994. The dynamics of competitive insurance markets. Journal of Financial Intermediation 3 (4): 379–415.

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Florida State University, Tallahassee, USA

    Patricia H. Born & Evan M. Eastman

  2. Illinois State University, Normal, USA

    E. Tice Sirmans

Authors
  1. Patricia H. Born
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Evan M. Eastman
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. E. Tice Sirmans
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to E. Tice Sirmans.

Ethics declarations

Conflict of interest

On behalf of all authors, the corresponding author states there is no conflict of interest.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Born, P.H., Eastman, E.M. & Sirmans, E.T. Managed care or carefully managed? Management of underwriting profitability by health insurers. Geneva Pap Risk Insur Issues Pract 48, 5–31 (2023). https://doi.org/10.1057/s41288-021-00239-1

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1057/s41288-021-00239-1

Keywords

Search

Navigation