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Nonprice rivalry among health insurers and coverage of new technologies

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  • Kevin Frick
  • Neil Powe

Abstract

This paper develops a multiple-period theoretical model of health maintenance organization (HMO) coverage of medical procedures as a function of HMO competition and a market's predisposition toward managed care. Previous empirical results regarding one laser procedure were not predicted by a single-period model. The new model predicts that more favorable predisposition toward managed care is positively associated with coverage of procedures for which coverage is discretionary. The empirical analysis in this paper focuses on 13 additional laser procedures. The new empirical findings are different from the previous findings and are more consistent with the hypotheses generated by the new theoretical model. Copyright International Atlantic Economic Society 2000

Suggested Citation

  • Kevin Frick & Neil Powe, 2000. "Nonprice rivalry among health insurers and coverage of new technologies," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 28(4), pages 450-462, December.
    • Handle: RePEc:kap:atlecj:v:28:y:2000:i:4:p:450-462
    DOI: 10.1007/BF02298397
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    References listed on IDEAS

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    1. Kevin Frick & Neil Powe, 1998. "HMO coverage of cosmetic procedures: Response to market competition," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 4(4), pages 398-410, November.
    2. Wholey, Douglas & Feldman, Roger & Christianson, Jon B., 1995. "The effect of market structure on HMO premiums," Journal of Health Economics, Elsevier, vol. 14(1), pages 81-105, May.
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