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Health Serv Res. 2008 Jun;43(3):971-87. doi: 10.1111/j.1475-6773.2007.00805.x.

Nonprice competition and quality of care in managed care: the New York SCHIP market.

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  • 1Department of Community and Preventive Medicine, University of Rochester, 601 Elmwood Avenue, Box 644, Rochester, NY 14642, USA.

Abstract

OBJECTIVE:

To examine the effect of nonprice competition among managed care plans on the quality of care in the New York SCHIP market.

DATA SOURCES:

U.S. Census 2000; 2002 New York State Managed Care Plan Performance Report; and 2001 New York State Managed Care Annual Enrollment Report.

STUDY DESIGN:

Each market is defined as a county, and competition is measured as the number of plans in a market. Quality of care is measured in percentages using three Consumer Assessment of Health Plans Survey and three Health Plan Employer Data and Information Set scores. Two-stage least squares is applied to address the endogeneity between competition and the quality of care, using population as an instrument.

PRINCIPAL FINDINGS:

We find a negative association between competition and quality of care. An additional managed care plan is significantly associated with a decrease of 0.40-2.31 percentage points in four out of six quality measures. After adjusting for production cost, a positive correlation is observed between price and quality measures across different pricing regions.

CONCLUSIONS:

It seems likely that pricing policy is a constraint on quality production, although it may not be interpreted as a causal relationship and further study is needed.

PMID:
18454776
[PubMed - indexed for MEDLINE]
PMCID:
PMC2442245
Free PMC Article
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