Insurer-provider integration, credible commitment, and managed-care backlash

Research output: Contribution to journalArticlepeer-review

Abstract

People distrust managed care organizations (MCOs) more than traditional health plans. This phenomenon has become known as "managed-care backlash." Using a model of the interaction between insurers, physicians, and patients, this paper identifies two possible motivations for MCO backlash. The first, which comes from traditional health plans' superior ability to credibly commit to providing better than least-cost care, is efficiency promoting. The second, which arises when patients are able to obtain higher-benefit treatments through reneging on their initial insurance contracts through "doctor shopping," may reduce efficiency.

Original languageEnglish (US)
Pages (from-to)861-876
Number of pages16
JournalJournal of Health Economics
Volume25
Issue number5
DOIs
StatePublished - Sep 2006
Externally publishedYes

Keywords

  • Managed-care backlash
  • Moral hazard
  • Provider incentives

ASJC Scopus subject areas

  • Health Policy
  • Public Health, Environmental and Occupational Health

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