Number Of Health Maintenance Organizations Research Articles

PHP185 - BRAZIL'S ECONOMIC SITUATION AND THE EVOLUTION OF THE PRIVATE HEALTHCARE SYSTEM

This study aimed to analyze the evolution of health maintenance organizations (HMOs) in the period pre, during and post-economic crisis in different regions of Brazil. The number of lives and number of HMOs, stratified by 5 regions of Brazil (South, Southeast, Midwest, North and Northeast) and by modalities (Insurance, Medical Group, Medical Cooperative, and Self-management), were obtained from the National Agency of Supplementary Health website. The time horizon of the analysis was divided in pre-crisis (2012−2014), during (2015−2016), and post-crisis (2017). In the pre-crisis period, there was an increase of 8.7% in the number of lives, with the higher growth in Midwest region. Regarding the type of HMO, there was a greater increase of insurers (21.4%). During the crisis, HMOs lost 5% of the number of lives, mainly in the North/Southeast regions. Medical group type HMOs did not have a loss of lives for the period (growth of 1.9%). In 2017, there was a recovery of beneficiaries (5%), with the exception of the Midwest region. Cooperatives and insurers were the fastest recovering types of HMOs, with 7.2% and 8.5% increase compared to 2015−2016, respectively. The number of HMOs with beneficiaries has been decreasing, with 962 in December 2012 to 766 in December 2017, but the coverage rate remained similar, being 22.1% and 22.7% in those periods. The number of HMOs and HMO subscribers seems to be influenced by the economic situation in Brazil. Given the uncertainties about the economic, financial, and political situation in Brazil over the next few years, this is likely to influence the HMO sector. Expected trends include expansion of market consolidation with big mergers/acquisitions; expansion of private investment; and increased demand for popular individual plans. The impact of these trends on health care delivery and patient health care outcomes should be the subject of study.

Competition between health maintenance organizations and nonintegrated health insurance companies in health insurance markets.

This article examines a model of competition between two types of health insurer: Health Maintenance Organizations (HMOs) and nonintegrated insurers. HMOs vertically integrate health care providers and pay them at a competitive price, while nonintegrated health insurers work as indemnity plans and pay the health care providers freely chosen by policyholders at a wholesale price. Such difference is referred to as an input price effect which, at first glance, favors HMOs. Moreover, we assume that policyholders place a positive value on the provider diversity supplied by their health insurance plan and that this value increases with the probability of disease. Due to the restricted choice of health care providers in HMOs a risk segmentation occurs: policyholders who choose nonintegrated health insurers are characterized by higher risk, which also tends to favor HMOs. Our equilibrium analysis reveals that the equilibrium allocation only depends on the number of HMOs in the case of exclusivity contracts between HMOs and providers. Surprisingly, our model shows that the interplay between risk segmentation and input price effects may generate ambiguous results. More precisely, we reveal that vertical integration in health insurance markets may decrease health insurers’ premiums.

A Profile of Hospital Acquisitions

The number of hospitals acquired by hospital systems has declined from 99 facilities in 1996 to less than 63 facilities between 1999 and 2000. We evaluated the market, operating and organizational factors, and their relationship to these hospital acquisitions that occurred during this period of decline. We found that acquired hospitals, on average, operated at a loss, incurred higher debt levels, and were more likely to be located in markets with a large number of health maintenance organizations. Older, for-profit hospitals with fewer occupied beds were also likely targets for hospital acquisitions.

Competition among hospitals for HMO business: effect of price and nonprice attributes.

To investigate patterns of competition among hospitals for the business of health maintenance organizations (HMOs). The study focused on the relative importance of hospital price and nonprice attributes in the competition for HMO business. The study capitalized on hospital cost reports from Florida that are unique in their inclusion of financial data regarding HMO business activity. The time frame was 1992 to 1997. The study was designed as an observational investigation of acute care hospitals. Results indicated that a hospital's share of HMO business was related to both its price and nonprice attributes. However, the importance of both price and nonprice attributes diminished as the number of HMOs in a market increased. Hospitals that were market share leaders in terms of HMO business (i.e., 30 percent or more market share) were superior, on average, to their competitors on both price and nonprice attributes. Study results indicate that competition among hospitals for HMO business involves a complex set of price and nonprice attributes. The HMOs do not appear to focus on price alone. Hospitals likely to be the most attractive to HMOs are those that can differentiate themselves on the basis of nonprice attributes while being competitive on price as well.

Reversal of fortune: commercial HMOs in the Medicaid market.

Between 1992 and 1996 the number of health maintenance organizations (HMOs) entering the Medicaid market grew at an average annual rate of approximately 22 percent. Participation among all ownership segments grew, resulting in a broad distribution of beneficiaries across the HMO industry. However, recent declines in financial performance within the industry appear to be more dramatic for plans with many Medicaid members. In addition, growing concerns about rate adequacy and volatility as well as expanding administrative demands raise questions about the long-term commitment of commercial HMOs to Medicaid participation. This paper analyzes operating characteristics and financial performance of licensed commercial HMOs from 1992 through 1996, drawing on indepth interviews with health plan executives and managed care stock analysts.

HMO coverage of cosmetic procedures: Response to market competition

Theory suggests that insurance policies should not cover purely cosmetic procedures. This paper attempts to explain empirical variation in coverage of a purely cosmetic procedure. Health maintenance organizations (HMOs) are modeled in a Cournot competition with two decisions—the number of policies and the limits placed on medical care utilization. Comparative statics for an individual market suggest, first, that restrictiveness is positively associated with the number of HMOs. Second, restrictiveness is positively associated with the predisposition to demand managed care products. Third, each effect is strengthened by increasing the other parameter. Restriction of tattoo ablation, a purely cosmetic procedure, is examined empirically. The first and second predictions are supported at low levels of predisposition and numbers of HMOs, while the third prediction is not supported.

Health maintenance organizations and their implications for psychiatry.

Rapidly rising health care costs, a growing surplus of physicians, and recent federal legislation have created a more competitive health care market and have led to rapid growth in the number of health maintenance organizations, or HMOs. HMOs may place psychiatrists and their patients at a disadvantage because they generally restrict coverage of mental illness, use mental health practitioners other than psychiatrists, and lack provision for treating chronic and indigent mentally ill patients. In this review article, the authors describe the characteristics of HMOs, review the historical, legislative, and economic forces that have contributed and will contribute to their explosive growth, and outline measures that psychiatrists must take to ensure that mental health care is not compromised in HMOs and other price-competitive health care delivery systems.

HMOs, Competition, and Government

This article considers the role of three sets of forces affecting the development of health maintenance organizations (HMOs) during the early 1970s: legal restrictions, market conditions, and the federal government's policy stance. Our review of the evidence suggests that the rapid increase in the number of HMOs during this period was primarily due to favorable market conditions in certain areas of the country combined with a highly encouraging federal policy toward HMOs. Legal restrictions do not appear to have been as serious a barrier to HMO development as was earlier believed. In 1973-74, major new legislation was enacted at both the federal and state levels, ostensibly to encourage HMO development. Our review of this legislation suggests that, while it removes many of the old legal requirements which apparently were not serious barriers to HMO development, the new legislation imposes a host of new conditions and requirements on HMO participation in the health care marketplace. Ironically, some of these new features may impede the operation of the very market forces which encouraged the earlier HMO growth.

The Health Maintenance Organization Act of 1973 (P.L. 93-222) and Prepaid Group Practice Plans

Passage of the 1973 Health Maintenance Organization Act (P.L. 93-222) represents a significant effort by the Federal government to experiment with organizational change in the structure of the health care delivery system. The history of the bill is briefly reviewed. The most important sections of the bill are analyzed from the perspective of an existing prepaid group practice plan. The author concludes that the bill contains sufficiently stringent requirements that it will not result in a major increase in the number of Health Maintenance Organizations unless similar requirements are imposed on other private insurance carriers. Furthermore, significant allowance for "phasing in" will be required for the existing prepaid group practice prototype plans to qualify for Federal certification.