Health Plan Conversions: Are They in the Public Interest?

Nancy Dean Beaulieu

No 10127, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Recently, not-for-profit health plans have been converting to for-profit status and these conversions have frequently occurred as steps to facilitate merger or acquisition with a for-profit company. Some industry observers attribute these managed care market place trends to an industry shake out resulting from increased competition in the sector. At the same time, the perceived competitive pressures have led to questions about the long run viability of non-profit health plans. Furthermore, some industry and government leaders believe that some non-profits are already conducting themselves like for-profit health plans and question the state premium tax exemption ordinarily accorded to such plans. This paper develops a framework for evaluating health plan conversions and examines related health policy issues through the lens of a case study of the proposed conversion of the CareFirst Blue Cross Blue Shield Company. Analyses demonstrate that CareFirst wields substantial market power in some segments of its local market, that it is unlikely to realize cost savings through expanded economies of scale, and that quality of care appears to be lower in the plans typically acquiring converting health plans.

JEL-codes: I1 L3 (search for similar items in EconPapers)
Date: 2003-12
New Economics Papers: this item is included in nep-edu
Note: EH
References: Add references at CitEc
Citations:

Published as Nancy Dean Beaulieu, 2004. "An Economic Analysis of Health Plan Conversions: Are They in the Public Interest?," NBER Chapters, in: Frontiers in Health Policy Research, Volume 7, pages 129-177 National Bureau of Economic Research, Inc.
Published as Beaulieu, Nancy Dean. "An Economic Analysis Of Health Plan Conversions: Are They In The Public Interest?," Forum for Health Economics and Policy, 2004, v7, Article 6.

Downloads: (external link)
http://www.nber.org/papers/w10127.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:10127

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w10127

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().