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Competition, Quality of Care and the Role of the Consumer

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.

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The Center for Studying Health System Change Ceased operation on Dec. 31, 2013.