This paper examines how differentiation among Health Maintenance Organizations (HMOs) affects local market competition. Most markets for HMOs appear sufficiently unconcentrated; however, differences among HMOs may make competition less intense than the number of competitors would suggest. To investigate this possibility, we distinguish HMOs that serve only local markets from those that operate regional or national networks. We analyze how HMOs of one type affect the profitability of the other using an equilibrium model of entry and product choice. While the two types of HMOs have strong competitive effects within segments, the competitive effect of differentiated firms is negligible.
There is much debate on how recent increases in medical malpractice premiums affect patients' access to care. We examined activity levels of neurosurgeons and obstetricians, as well as the incidence of high-risk surgery and patients' travel times in Florida, where malpractice insurance premiums have soared since 2000. Compared with 1997-2000, we found that during 2000-2003, many neurosurgeons cut back their volume of brain surgeries and that craniotomy patients traveled longer for care without any significant change in the overall incidence of craniotomies. Women undergoing high-risk deliveries did not see increases in travel times.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.