Abstract
Prior studies find that the growth of managed care through the early 1990s introduced a strong positive relationship between price and concentration in hospital markets. We hypothesize that the relaxation of constraints on consumer choice in response to a "managed care backlash" has diminished the price sensitivity of demand facing hospitals, reducing or possibly reversing the price-concentration relationship. We test this hypothesis by studying the price/concentration relationship for hospitals in California and Florida for selected years between 1990 and 2003, while addressing the potential endogeneity of concentration. We find an increasingly positive price/concentration in the 1990s with a peak occurring by 2001. Between 2001 and 2003, the growth in this relationship halts and possibly reverses.
Original language | English (US) |
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Pages (from-to) | 362-376 |
Number of pages | 15 |
Journal | Journal of Health Economics |
Volume | 27 |
Issue number | 2 |
DOIs | |
State | Published - Mar 2008 |
Keywords
- Competition
- Hospitals
- Managed care
ASJC Scopus subject areas
- Health Policy
- Public Health, Environmental and Occupational Health