The effect of HMOs on hospital capacity, 1982-1996

Area of Science:

• Health Services Research
• Healthcare Economics
• Public Health Policy

Background:

• Hospital capacity has been declining nationally.
• Further reductions in hospital capacity are anticipated.
• The impact of Health Maintenance Organizations (HMOs) on this trend requires investigation.

Purpose of the Study:

• To compare the rate of hospital capacity decline in metropolitan statistical areas (MSAs) with high HMO market penetration versus those with low penetration.
• To analyze the period from 1982 to 1996.

Main Methods:

• Comparative analysis of hospital capacity metrics.
• Examination of data from metropolitan statistical areas (MSAs).
• Focus on the period 1982-1996.

Main Results:

• MSAs with higher HMO penetration experienced slightly greater reductions in beds per capita.
• The difference in beds per capita reduction between high and low HMO penetration MSAs was small.
• Hospital closures, beds per hospital, and occupancy rates were not consistently associated with HMO market penetration.

Conclusions:

• HMO market penetration has a minimal impact on the rate of decline in hospital beds per capita.
• Overall hospital bed capacity reduction occurred at similar rates across all MSAs, irrespective of HMO penetration.
• Other measures of hospital capacity are not consistently linked to HMO market penetration.