"Efficiency outcomes of market concentration and managed care"
JEL codes: C23, I11, L41
Keywords: competition, cost efficiency, managed care, panel data, stochastic frontier function
paper examines how hospital cost efficiency has reacted to extensive horizontal
integrations of hospitals and rapid growth of managed care in the
US health care industry. Cost efficiency is
estimated by using panel data approaches to relax the assumptions for the
hospital effects imposed in earlier studies. The paper shows that higher
managed care penetration over time is associated with greater hospital
efficiency, and higher market concentration is positively associated with
efficiency when markets are highly competitive or highly concentrated.
Pre-publication pdf copy.