Competition between managed care organizations and indemnity plans in health insurance markets
This paper examines a model of competition between two types of health insurers: Managed Care Organizations (MCOs) and "Conventional Insurers". MCOs vertically integrate health care providers and pay them at a competitive price, while conventional insurers work as indemnity plans and pay t...
- Autores:
-
Baranes, Edmond
Bardey, David
- Tipo de recurso:
- Work document
- Fecha de publicación:
- 2012
- Institución:
- Universidad de los Andes
- Repositorio:
- Séneca: repositorio Uniandes
- Idioma:
- eng
- OAI Identifier:
- oai:repositorio.uniandes.edu.co:1992/8318
- Acceso en línea:
- http://hdl.handle.net/1992/8318
- Palabra clave:
- Competition policy
Managed care organization
Vertical integration
Compañías de seguros - Investigaciones
Seguros de salud - Investigaciones
L42, I11, G22
- Rights
- openAccess
- License
- http://creativecommons.org/licenses/by-nc-nd/4.0/
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Competition between managed care organizations and indemnity plans in health insurance markets |
| dc.title.alternative.none.fl_str_mv |
Competencia entre aseguradores integrados y tradicionales en los mercados de seguros de salud |
| title |
Competition between managed care organizations and indemnity plans in health insurance markets |
| spellingShingle |
Competition between managed care organizations and indemnity plans in health insurance markets Competition policy Managed care organization Vertical integration Compañías de seguros - Investigaciones Seguros de salud - Investigaciones L42, I11, G22 |
| title_short |
Competition between managed care organizations and indemnity plans in health insurance markets |
| title_full |
Competition between managed care organizations and indemnity plans in health insurance markets |
| title_fullStr |
Competition between managed care organizations and indemnity plans in health insurance markets |
| title_full_unstemmed |
Competition between managed care organizations and indemnity plans in health insurance markets |
| title_sort |
Competition between managed care organizations and indemnity plans in health insurance markets |
| dc.creator.fl_str_mv |
Baranes, Edmond Bardey, David |
| dc.contributor.author.none.fl_str_mv |
Baranes, Edmond Bardey, David |
| dc.subject.keyword.none.fl_str_mv |
Competition policy Managed care organization Vertical integration |
| topic |
Competition policy Managed care organization Vertical integration Compañías de seguros - Investigaciones Seguros de salud - Investigaciones L42, I11, G22 |
| dc.subject.armarc.none.fl_str_mv |
Compañías de seguros - Investigaciones Seguros de salud - Investigaciones |
| dc.subject.jel.none.fl_str_mv |
L42, I11, G22 |
| description |
This paper examines a model of competition between two types of health insurers: Managed Care Organizations (MCOs) and "Conventional Insurers". MCOs vertically integrate health care providers and pay them at a competitive price, while conventional insurers work as indemnity plans and pay the health care providers that are freely chosen by their policyholders at a wholesale price. This first difference is called input price effect. Moreover, we assume that policyholders put a positive value on providers. diversity supplied by their health insurance plan and that this value increases with their probability of disease. Due to the restricted choice of health care providers in MCOs, a risk segmentation occurs: policyholders who choose conventional insurers are characterized by a higher risk. Surprisingly, our results point out that the effects of this input price and risk segmentation can be countervailing and do not necessarily work in the same direction. More precisely, we show that vertical integration in health insurance markets can create an anti-raise rivals' cost effect. Consequently, our results reveal that the penetration of vertical integration may decrease conventional insurers' premiums, which is a sufficient condition to be Pareto-improving. After more than three decades of vertical integration waves, our model may also explain why we observe an interior equilibrium in which conventional insurers have survived. |
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2012 |
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2012 |
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2018-09-27T16:52:07Z |
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2018-09-27T16:52:07Z |
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Documento de trabajo |
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http://purl.org/coar/version/c_970fb48d4fbd8a85 |
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info:eu-repo/semantics/workingPaper |
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http://purl.org/coar/resource_type/c_8042 |
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Text |
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http://purl.org/coar/resource_type/c_8042 |
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1657-5334 |
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http://hdl.handle.net/1992/8318 |
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1657-7191 |
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10.57784/1992/8318 |
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instname:Universidad de los Andes |
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reponame:Repositorio Institucional Séneca |
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1657-5334 1657-7191 10.57784/1992/8318 instname:Universidad de los Andes reponame:Repositorio Institucional Séneca repourl:https://repositorio.uniandes.edu.co/ |
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http://hdl.handle.net/1992/8318 |
| dc.language.iso.none.fl_str_mv |
eng |
| language |
eng |
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Documentos CEDE No. 16 Julio de 2012 |
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https://ideas.repec.org/p/col/000089/009802.html |
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http://creativecommons.org/licenses/by-nc-nd/4.0/ |
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openAccess |
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20 páginas |
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Universidad de los Andes, Facultad de Economía, CEDE |
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Universidad de los Andes, Facultad de Economía, CEDE |
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Al consultar y hacer uso de este recurso, está aceptando las condiciones de uso establecidas por los autores.http://creativecommons.org/licenses/by-nc-nd/4.0/info:eu-repo/semantics/openAccesshttp://purl.org/coar/access_right/c_abf2Baranes, Edmond4508f364-617e-4a54-a1d4-617410e9580f600Bardey, Davideb5d55eb-0c4d-4330-b74c-b4e0ef0037ac6002018-09-27T16:52:07Z2018-09-27T16:52:07Z20121657-5334http://hdl.handle.net/1992/83181657-719110.57784/1992/8318instname:Universidad de los Andesreponame:Repositorio Institucional Sénecarepourl:https://repositorio.uniandes.edu.co/This paper examines a model of competition between two types of health insurers: Managed Care Organizations (MCOs) and "Conventional Insurers". MCOs vertically integrate health care providers and pay them at a competitive price, while conventional insurers work as indemnity plans and pay the health care providers that are freely chosen by their policyholders at a wholesale price. This first difference is called input price effect. Moreover, we assume that policyholders put a positive value on providers. diversity supplied by their health insurance plan and that this value increases with their probability of disease. Due to the restricted choice of health care providers in MCOs, a risk segmentation occurs: policyholders who choose conventional insurers are characterized by a higher risk. Surprisingly, our results point out that the effects of this input price and risk segmentation can be countervailing and do not necessarily work in the same direction. More precisely, we show that vertical integration in health insurance markets can create an anti-raise rivals' cost effect. Consequently, our results reveal that the penetration of vertical integration may decrease conventional insurers' premiums, which is a sufficient condition to be Pareto-improving. After more than three decades of vertical integration waves, our model may also explain why we observe an interior equilibrium in which conventional insurers have survived.Este artículo propone un análisis en el cual se modela la competencia entre dos tipos de aseguradores: integrados (MCOs) y tradicionales. Los MCOs integran verticalmente a los proveedores de salud y les pagan sus servicios a un precio competitivo (costo marginal), mientras que, los aseguradores tradicionales simplemente reembolsan a los proveedores de salud, libremente escogidos por sus afiliados, a un precio de mercado. Esta primera diferencia es llamada efecto precio. Además, se asume que los asegurados valoran positivamente la diversidad de proveedores a los cuales tienen acceso gracias a su plan de salud y que esta valoración aumenta con su probabilidad de estar enfermo. Debido a las elecciones restringidas de los proveedores de salud con los MCOs, una segmentación de los riesgos ocurre: los asegurados que escogen aseguradores tradicionales se caracterizan por un riesgo mayor. De manera sorprendente, nuestros resultados revelan que estos efectos precios y de segmentación de los riesgos pueden actuar en direcciones opuestas. Más precisamente, se muestra que la integración vertical en los mercados de seguros de salud puede generar un efecto opuesto al efecto tradicional de incrementar el costo de los competidores. En consecuencia, nuestros resultados revelan que la penetración de la integración vertical disminuye las primas de los aseguradores tradicionales, lo cual constituye una condición suficiente para ser Pareto-improving. Después de tres décadas de ola de integración vertical, nuestro modelo permite explicar porque todavía existe un equilibrio interior en el cual los aseguradores tradicionales han sobrevivido.20 páginasapplication/pdfengUniversidad de los Andes, Facultad de Economía, CEDEDocumentos CEDE No. 16 Julio de 2012https://ideas.repec.org/p/col/000089/009802.htmlCompetition between managed care organizations and indemnity plans in health insurance marketsCompetencia entre aseguradores integrados y tradicionales en los mercados de seguros de saludDocumento de trabajoinfo:eu-repo/semantics/workingPaperhttp://purl.org/coar/resource_type/c_8042http://purl.org/coar/version/c_970fb48d4fbd8a85Texthttps://purl.org/redcol/resource_type/WPCompetition policyManaged care organizationVertical integrationCompañías de seguros - InvestigacionesSeguros de salud - InvestigacionesL42, I11, G22Facultad de EconomíaPublicationORIGINALdcede2012-16.pdfdcede2012-16.pdfapplication/pdf686289https://repositorio.uniandes.edu.co/bitstreams/53f5bf85-1806-41b5-9628-f7a483f6af82/download1d84560609e6c3bdffa1842eb7967d63MD51TEXTdcede2012-16.pdf.txtdcede2012-16.pdf.txtExtracted texttext/plain357813https://repositorio.uniandes.edu.co/bitstreams/338bc0f0-c278-4689-91c3-38f30786e7ea/download0ef0d5de7b47b7b478079a4572991cd2MD54THUMBNAILdcede2012-16.pdf.jpgdcede2012-16.pdf.jpgIM Thumbnailimage/jpeg9008https://repositorio.uniandes.edu.co/bitstreams/1b5c8a0f-8d2e-4b3a-a39a-11365a040f86/downloada5a41fde4db85b3bc3985f39fc089b78MD551992/8318oai:repositorio.uniandes.edu.co:1992/83182024-06-04 15:32:26.598http://creativecommons.org/licenses/by-nc-nd/4.0/open.accesshttps://repositorio.uniandes.edu.coRepositorio institucional Sénecaadminrepositorio@uniandes.edu.co |