Managed Care Discounting: Evidence from the MarketScan Database

Avi Dor, Siran M. Koroukian and Michael Grossman

No 10437, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The paper examines price discounting by health maintenance organizations and preferred provider organizations in markets for hospital services. Our empirical analysis focuses on transaction prices for angioplasty, which is a relatively common procedure, with well defined 'product' characteristics. After controlling for patient and procedure heterogeneity and market power we find that on average prices for PPOs are 8% lower than fee-for-service plans, followed by point-of-service HMOs who capture a 24% discount. Our results are in general agreement with earlier work that shows that managed care discounts are 'real', after accounting for process of care.

JEL-codes: I11 (search for similar items in EconPapers)
Date: 2004-04
New Economics Papers: this item is included in nep-hea
Note: EH
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Citations: View citations in EconPapers (8)

Published as Avi Dor & Siran M. Koroukian & Michael Grossman, 2004. "Managed Care Discounting: Evidence from the MarketScan Database," INQUIRY: The Journal of Health Care Organization, Provision, and Financing, vol 41(2), pages 159-169.

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