The Elasticity of Demand for Health Maintenance Organizations

摘要: This paper analyzes a national sample of firms where employees faced choice between Health Maintenance Organization (HMO) and conventional insurer such as Blue Cross. A regression analysis is specified partial adjustment model logit functional form. The long-run price elasticity demand for HMOs estimated to be -0.6. To the extent that employers pass on increases in total premium, elasticities facing insurers are higher. Furthermore, negative function copayment charged by HMO an office visit.