
1998
The Milbank Quarterly
, vol.76, no.4 (1998): 737-743
 Catherine G. McLaughlin, Paul B. Ginsburg
 ittle evidence exists of a relationship between competition and
    quality of medical care. In fact, they may not even be corsrelated with one another.
    Emergence of HMOs in the health care marketplace has altered provider behavior and has led
    to a dramatically different health insurance market, but they are neither a necessary nor
    sufficient condition for market competition among providers. A factor more directly linked
    to competition is the degree of sensitivity to price, which begins in the insurance market
    and also reflects the role of employers. When insurance markets are highly competitive,
    health plans are more sensitive to price differences among providers, an effect that can
    take place without a significant HMO presence in the market. Other factors include the way
    people interpret the meaning of competition; competing on the basis of price with no
    controls on quality; the way that health insurance carriers have introduced competition
    into the marketplace; the role of consumers; and the type and extent of consumer
    information about health care quality.
ittle evidence exists of a relationship between competition and
    quality of medical care. In fact, they may not even be corsrelated with one another.
    Emergence of HMOs in the health care marketplace has altered provider behavior and has led
    to a dramatically different health insurance market, but they are neither a necessary nor
    sufficient condition for market competition among providers. A factor more directly linked
    to competition is the degree of sensitivity to price, which begins in the insurance market
    and also reflects the role of employers. When insurance markets are highly competitive,
    health plans are more sensitive to price differences among providers, an effect that can
    take place without a significant HMO presence in the market. Other factors include the way
    people interpret the meaning of competition; competing on the basis of price with no
    controls on quality; the way that health insurance carriers have introduced competition
    into the marketplace; the role of consumers; and the type and extent of consumer
    information about health care quality.
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