Markets, governments, and HMO development in the 1990s

Area of Science:

• Health Services Research
• Health Economics
• Public Health Policy

Background:

• The 1990s witnessed significant growth and transformation in the Health Maintenance Organization (HMO) industry.
• Understanding the drivers of HMO development during this period is crucial for current healthcare policy.
• Previous research often focused on earlier eras, necessitating an update on factors influencing HMOs in the 1990s.

Purpose of the Study:

• To analyze the impact of population demographics, health market characteristics, and government actions on HMO industry development in the 1990s.
• To examine the influence on HMO market share and the number of operational HMOs in metropolitan areas.
• To identify how policy makers' roles as purchasers and regulators shaped HMO supply and demand.

Main Methods:

• Analysis of factors influencing HMO market share and operational numbers in metropolitan areas during the 1990s.
• Examination of population demographics, health market characteristics (hospital expenditures, physician supply), and government purchasing/regulation.
• Comparative analysis to identify shifts in factor influence compared to previous periods.

Main Results:

• Population size was a critical determinant of HMO development.
• Health market characteristics, such as hospital expenditures and specialist supply, affected development, sometimes differently than in prior eras.
• Government purchasing (Medicaid, Medicare managed care) and regulation (coverage requirements) influenced HMO development, potentially with contradictory outcomes.

Conclusions:

• Policy makers significantly influenced HMO supply and demand in the 1990s, acting as both purchasers and regulators.
• HMO development increasingly occurred in potentially unfavorable markets, highlighting the evolving role of policy.
• Findings underscore the complex interplay between market forces and policy interventions in shaping healthcare delivery systems.