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Competition among Hospitals for HMO Business - Case Study Example

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The study of the effect of price and non-price attributes to the share of HMO business among hospitals based on an empirical analysis of Florida acute hospitals covering the period from 1992 to 1997 centered on finding answers to two questions: (1) In the competition among hospitals for HMO business, what is the relative importance of price versus non-price attributes and (2) Do patterns of competition among hospitals for HMO business appear to differ depending on market characteristics The theoretical framework used by the authors states that a hospital's share of HMO business in its market is a function of a combination of several price and non-price attributes, and that hospitals that offe…
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Competition among Hospitals for HMO Business
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Download file to see previous pages The independent variables are: an index of relative hospital prices for HMO business in each market (price); high tech-capability; teaching status (teaching or non-teaching); ownership status (non-profit, for-profit, or public); and location. To provide answer to the second research question, that is, to account for the effect of the structure of the hospital market on market share, three variables were added: no. of hospitals in the market, no. of HMOs in the market, and the HMO penetration rate.
For both price and non-price attributes, the regression test pointed to an effect on market share variables. Hospitals with lower prices had a bigger share of HMO business. The more high-tech a hospital was, the greater the share in the HMO business. Teaching hospitals were more preferred by HMOs than non-teaching ones. On the effect of ownership: on average, nonprofit and public hospitals had less market share than for-profit ones. ...Download file to see next pagesRead More
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