Logo Logo

Is the Impact of Managed Care on Hospital Prices Decreasing?, Journal of Health Economics

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 2001, while addressing the potential endogeneity of concentration. We find an increasingly positive price/concentration relationship through 1999. Between 1999 and 2001, the relationship weakens and possibly reverses.

Type

Article

Author(s)

David Dranove, Richard C. Lindrooth, William D. White, Jack Zwanziger

Date Published

2008

Citations

Dranove, David, Richard C. Lindrooth, William D. White, and Jack Zwanziger. 2008. Is the Impact of Managed Care on Hospital Prices Decreasing?. Journal of Health Economics. 27(2): 362-376.

KELLOGG INSIGHT

Explore leading research and ideas

Find articles, podcast episodes, and videos that spark ideas in lifelong learners, and inspire those looking to advance in their careers.
learn more

COURSE CATALOG

Review Courses & Schedules

Access information about specific courses and their schedules by viewing the interactive course scheduler tool.
LEARN MORE

DEGREE PROGRAMS

Discover the path to your goals

Whether you choose our Full-Time, Part-Time or Executive MBA program, you’ll enjoy the same unparalleled education, exceptional faculty and distinctive culture.
learn more