University of Alabama at Birmingham
What factors affect HMO and PPO decisions to contract with some hospitals and not with others? This study examined the determinants of managed care contracts and the dynamics of those contracts over time. The researchers examined: 1) the effects of insurance market competition; 2) the relative importance of hospital costs, quality, services, and other factors; 3) the stability of HMO/PPO contracts over time; and 4) the effects of HMO/PPO strategies on managed care market penetration over time. The objective of this study was to help policy makers understand why managed care organizations contract with specific hospitals.