The effect of mergers on firms’ costs: evidence from the HMO industry

We examine the effect of mergers on firms’ costs, using a national data set that contains information on both pre- and post-merger costs for firms in the Health Maintenance Organization (HMO) industry. By utilizing data on all HMOs that operated in the United States from 1985 to 1997, we observe enough mergers to obtain estimates of both short-run and relatively permanent merger effects. On average, we do not find evidence that mergers allowed HMOs to realize greater economies of scale or that mergers improved efficiency by shifting the cost function. On the other hand, mergers between HMOs that produce Medicare and other products are likely to create dis-economies of scope that increase costs.     

Impacts of health maintenance organization growth on community health care costs.

The paper presents a model of health maintenance organization (HMO) growth, traditional health delivery system response, and total community health care costs. Simulations using a range of assumptions about the response of government and the traditional sector to HMO growth suggest three conclusions. First, HMO growth reduces total community health costs, but a substantial fraction of HMO subscribers' savings is added to the cost of other sector subscribers. Second, HMO cost savings depend as much on HMO control of inflation rates as on control of hospital utilization. Third, while HMOs can have significant impact even when they share hospital resources with the traditional sector, HMOs must control captive hospitals in order to achieve all of their potential savings, growth, and community impact.     

Utilization control in HMOs.

Health Maintenance Organizations (HMOs) have emerged as a major vehicle to reduce transaction costs associated with defining the limits of health insurance coverage and to provide appropriate provider incentives. This article explains the heterogeneous set of incentives used by HMOs to reimburse providers and performs empirical tests of their effectiveness. The empirical analyses reveal that utilization of health care services is reduced when (1) physician compensation is based on salary or capitation arrangements rather than some measure of output; (2) bonuses and paybacks are based on individual rather than group performance; and (3) when the HMO operates as a proprietary (for-profit) organization. Utilization is not significantly affected by incentives placed on the hospital. Finally, physician ownership of the HMO was found to lead to higher levels of utilization.     

The Effects of Competition on Variation in the Quality and Cost of Medical Care

We estimate the effects of hospital competition on the level of and the variation in quality of care and hospital expenditures for elderly Medicare beneficiaries with heart attack. We compare competition's effects on more-severely ill patients, whom we assume value quality more highly, to the effects on less-severely ill, low-valuation patients. We find that low-valuation patients in competitive markets receive less intensive treatment than in uncompetitive markets, but have statistically similar health outcomes. In contrast, high-valuation patients in competitive markets receive more intensive treatment than in uncompetitive markets, and have significantly better health outcomes. Because this competition-induced increase in variation in expenditures is, on net, expenditure-decreasing and outcome-beneficial, we conclude that it is welfare-enhancing. These findings are inconsistent with conventional models of vertical differentiation, although they can be accommodated by more recent models.     

The diffusion of medical practice patterns in a community hospital.

There has been some evidence which suggests that HMOs alter the hospitalization rate of the fee for service medical sector. If true, this spillover effect would have important implications for reducing hospital utilization, because HMO affiliated physicians use substantially less resource intensive in-patient services. This research investigates one possible mechanism, whether there is a diffusion of medical practice patterns from HMO affiliated physicians to non-HMO physicians when both groups share admitting privileges in the same hospital. Intervention analysis was used to test this hypothesis by comparing the time series of in-patient utilization, in a community hospital, before and after the hospital became affiliated with a HMO. The results of this analysis did not substantiate the theorized HMO spillover effect.     

A health maintenance organization design for long term care under medicaid

The rapid increase in public expenditures for long term care under Medicaid is discussed. The major cause of this increase is identified as the high and often excessive utilization of nursing home care. Health maintenance organizations (HMOs) are considered in terms of their ability to reduce health care costs by curbing unnecessary hospitalization. The HMO structure is extended to long term care, where it is argued that unnecessary nursing home care can be reduced. A health maintenance organization targeted to the Medicaid long term care population is proposed and a detail flow analysis of the HMO is presented.     

Effects of managed care market penetration on physicians’ labor supply decisions

This paper examines data from a 1991 nationally representative survey of physicians under the age of 45 to evaluate the effects of HMO enrollment growth and the changing demographic composition of the physician work force on physicians’ choice of practice setting (employee versus self-employment) and annual hours of work. Our results indicate that HMO market penetration has a significant negative effect on the probability of self-employment for all physicians and the sub-samples of both specialists and generalists. Furthermore, increasing HMO market share has a significant negative effect on annual hours of work of all physicians and generalists but has only negligible effects on the work effort of specialists. Using these parameter estimates, we predict that a 100% increase in HMO market share decreases the probability of being self-employed by 23.5% for all physicians, 28% for specialists, and 21% among generalists. Controlling for self-employment, a doubling of the percentage of the population enrolled in HMOs reduces the annual hours of work by 4.9% for all physicians and by 6.8% among generalists. In contrast, HMO market penetration has only trivial effects on the work effort of specialists. We also find that the gender gap in hours between male and female physicians still persists. This gap is 17.7 to 19.6% for female physicians with young children, but is much smaller—5.5 to 8.5%—for women without young children.     

Chain-Store Pricing Across Local Markets

Chain‐stores now dominate most areas of retailing. While retailers may operate nationally or even internationally, the markets they compete in are largely local. How should they best operate pricing policy in respect of the different markets served—price uniformly across the local markets or on a local basis according to market conditions? We model this by allowing local market differences, with retail markets differing by their size and the number of players present. We show that practising price discrimination is not always best for a chain‐store. Competitive conditions exist under which uniform pricing can raise profits.     

A model of Social Security Disability Insurance using matched SIPP/Administrative data

We study Disability Insurance (DI) application behavior in the US using matched SIPP and administrative data over 1989–1995. Certain state-contingent earnings projections and eligibility probabilities are central to the analysis. We find evidence for a small work disincentive effect of DI that seems to be restricted to a subset of the DI beneficiaries, including low earning groups such as blue collar workers and those subject to economic dislocation. Processing time, Medicare value, unemployment, private health insurance, and health shocks are some of the major factors that affect application propensity. The behavioral response of female workers to various parameters of the DI program is found to be quite different from that of males.     

战略成本管理

战略成本管理从概念的提出之日起就一直存在不同的理解和解释,什么是战略成本管理?怎样反映和提高企业的竞争地位?如何进行战略成本管理?不同的概念、模式与方法都成为难题,SHANK模式或许能给出最终的答案。     

Faces of the needy: the portrayal of destitute children in the fundraising campaigns of NGOs in India

• This paper focuses on the portrayal of children in fundraising campaigns by nongovernmental organizations (NGOs) working in India and answers the following questions: How do children feel about their portrayal in the images of funding campaigns? How do photographers or managers/directors affiliated with NGOs view their portrayal of destitute children? The study draws on data from analysis of images, focus groups with children, and interviews with photographers and campaign managers from NGOs working in different parts of India. Findings suggest that children like to be portrayed as happy and in a “good light”, telling the whole story about their lives but that also generates awareness about hardships they face, such as child labor; NGOs face a challenge in representing beneficiaries in a good light while also showing “need” to donors; and children interviewed were unaware of the purpose of the images as a fundraising and marketing tool, raising ethical concerns.

Copyright © 2015 John Wiley & Sons, Ltd.     

Briefing Paper: What Economists can learn from Game Theory

Game theory is a branch of mathematics which analyses interdependent decision-making. It attempts to explain how decision-makers might take into account the likely response of others in formulating their own decisions. It has long been applied to microeconomics especially to the theory of the firm under oligopoly where the firm, in devising its pricing and production strategy, will take into account the likely reactions of other firms within the industry. More recently it has been appreciated that many situations in macroeconomics can be analysed in terms of game theory. For example, if one country introduces import controls, how will others react? If one country tries to control inflation by adopting a tough monetary policy, or tries to reflate, what will other countries do? How will exchange rate speculators respond to the government's announcement that it will not intervene in currency markets? Will they believe the government or will they adopt actions which will eventually force the government to intervene? How will markets respond if the government changes its macro-economic strategy? In some cases the “players” are the government and the business community, in other cases one government may be playing against another. In this Briefing Paper we introduce some ideas and results from game theory and show how they can be applied to macroeonomics as well as microeconomics.     

Small business financing sources between immigrants and natives in Puerto Rico

This paper analyzes the differences in small business financing sources among various groups in Puerto Rico (Island-born Puerto Ricans, Puerto Ricans born in the United States, and Immigrants). It is hypothesized that immigrants are relatively successful in obtaining funds from financial institutions because they are wealthier and might have a high representation in the financial sector, particularly in managerial positions, as compared to other groups. Also, immigrants could be positively self-selected into the entrepreneurial sector, therefore, financial institutions may attach a higher probability of business success to this group. The results from a multinomial logit model of financing sources support the contention that non-native owned businesses have a higher access to credit markets than natives owing perhaps, to their wealth status and economic power.JEL classification: G200; J150; M130; 0100     

ECB tapering: beware of global consequences

• ? The ECB's scaling back of its QE programme in 2018 could be more disruptive to global financial markets than the Federal Reserve's ongoing balance sheet unwinding. ECB bond purchases led Eurozone private investors to inject a massive amount of funds into global debt markets over the last few years. As the ECB reduces its stimulus, Eurozone investors will gradually pare back the build‐up of their foreign debt exposures. The full unwinding of ECB QE will see investors rebalance toward domestic debt securities .
• ? We expect Eurozone investors to continue injecting funds into global debt markets as the ECB proceeds to wind down its QE, but they will do so at a much slower pace. Based on our projections, European purchases of foreign debt securities this year will total €200 billion – down by half from the average €400 billion over the last three years. Such a large reduction raises the risk of disruption in some markets.
• ? How did we get here? Spillovers from the ECB's QE were much more pronounced than during Fed's. European private investors that sold bonds to the ECB during its QE programme faced a commensurate shortage of domestic debt assets. In contrast to the US experience, ECB buying far exceeded new domestic issuance, inducing private investors to sharply increase purchases of overseas debt securities.
• ? Ultimately, we expect European investors to seek to restore the share of domestic debt securities in their portfolios to a level in line with the historical norm, after the proportion of their domestic debt holdings fell by 7pp since the programme began. The rebalancing is likely to start in earnest once the ECB stops buying (and eventually starts selling) securities. As a result, the global debt issuance boom is likely to lose steam, given the extent to which it has relied on the support of European investors.

     

银行卡支付平台竞争绩效及其生存区间分析

银行卡支付平台具有双边市场属性，其交叉网络外部性强度深刻地影响着整个电子支付行业竞争格局。研究采用一个两阶段博弈模型分析银行卡支付平台竞争绩效及其生存区间，结果表明“赢者通吃”并非银行卡市场的常态，平台共存的条件在于交叉网络外部性要么足够大，要么就是足够小。     

Managing change strategically: the technical, political, and cultural keys.

Managing strategic change is increasingly a way of life for organizations faced with the turbulent economic, political, and cultural forces of the 1980s. To manage such change, organizations and their managers will have to confront basic questions regarding the organization's technical, political, and cultural foundations. The technical questions include: What business(es) should we be in? How should we be organized to accomplish our strategy? What kinds of people do we need, and how will they be acquired, developed, and rewarded? The political questions include: Who gets to influence the mission and strategy of the organization? How is power allocated both vertically and horizontally across the organization? Who gets promoted to what key positions? The cultural questions include: What values and beliefs are necessary to support the organization's strategy? What subcultures are desirable, and should there be an overarching corporate culture? How should the human resources system shape and mold the culture?     

Health insurance reform: The impact of a Medicare buy-in

The steady-state general equilibrium and welfare consequences of a Medicare buy-in program, optional for those aged 55–64, is evaluated in a calibrated life-cycle economy with incomplete markets. Incomplete markets and adverse selection create a potential welfare improving role for health insurance reform. We find that adverse selection eliminates any market for a Medicare buy-in if it is offered as an unsubsidized option to individual private health insurance. The subsidy needed to bring the number of uninsured to less than 5 percent of the target population could be financed by an increase in the labor income tax rate of just 0.03–0.18 percent depending on how the program is implemented.     

基于激励性薪酬制度下医院物流管理模式的构建

在日趋激烈的市场经济竞争中，医疗机构如何才能增强核心竞争能力，保证可持续发展，是新形势下每一个医院管理者母须面对的重要课题。医院保持核心竞争力除有一支优秀的医疗队伍外，还必须有一支善于管理的后勤保障队伍。如何合理地组织好物资的供应，保持医疗物资供应畅通和信息资源的共享以及合理的物流成本，已成为医院管理的瓶颈。文章就激励性薪酬制度下医院物流管理模式的构建进行了深入分析。     

Competition among Health Maintenance Organizations

We develop a model of competition among health maintenance organizations (HMOs) to analyze the effects of market power, scale economies, and asymmetric knowledge of health risk on market outcomes. We find that competition among HMOs may, but need not, ensure socially preferred outcomes. Market power or scale economies can sometimes admit socially preferred outcomes when they would otherwise not arise. Asymmetric knowledge of health risk may or may not be constraining. When it is constraining, a variety of patterns of incomplete health insurance can arise, along with excessive or insufficient treatment and preventive care for either high-risk or low-risk individuals.     

Derivatives market and economic growth nexus: Policy implications for emerging markets

The derivatives market plays a crucial role in an economy. However, its link to economic growth and macroeconomic factors seem to be insufficiently covered in academic research despite the publication of many empirical studies on the causality of finance and growth. Recently, many emerging markets, such as Vietnam, have decided to establish a derivatives markets for risk management to ensure stability in the economy. This paper investigates the dynamic relationship among these key variables using up-to-date panel data on 17 countries, for which required data are available until 2017. This study yields various findings. First, bidirectional Granger causality between derivatives markets and economic growth exists internationally. Second, using panel vector autoregression, impulse-response functions, variance decomposition techniques as well as panel econometrics estimations, we find that trade openness and government spending have more effects on the derivatives market than economic growth and inflation. Third, we document that the derivatives market has a more integrated direct relationship with economic growth and macroeconomic factors in high-income countries than their upper-middle-income counterparts. These new findings are essential for consideration by policy makers in emerging markets in relation to the development of their derivatives markets.