HSA 4321 Lecture Notes - Lecture 14: Independence Blue Cross, Health Maintenance Organization
Document Summary
Ocean state (rhode island: bcbs of rhode island has a large health insurance market share. Discovers that it is paying more for physician services than the upstart ocean state hmo: bcbs in 1986 initiated an mfn provision in its physician service contracts, ocean state sued bcbs prevailed and the mfn provision survived intact. In the period prior to the mfn clause (1978 1986), hmo enrollment increased from approximately 35,000 to 150,000 people (~14,000 per year) After the mfn clause (1986 1994), hmo enrollment increased from 150,000 to approximately 275,000 (~15,600 per year) Post-mfn enrollment increased ~ 147,000 per year: enrollments increased for non blue cross hmos, too. Effects on net price, discount level, and hospital profitability: results from philadelphia comparisons, net price. Effectively did not change after mfn: discount level. Essentially constant after mfn: none of this is consistent with harming competitors. Price and cost ranges for philadelphia hospitals, 1992: gross price per admission.
