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Rate Setting and Health Maintenance Organizations
Fall 1996
Journal of Health Politics, Policy and Law, vol.21, no.3 (Fall 1996): 511-513
Paul B. Ginsburg
insburg comments on the work of Wallack, Skwara and Cai on the
compatibility of competition and regulation in health care. They offer sound arguments
that some design elements of rate-setting systems are more compatible with competition
than others. Ginsburg however, argues against making regulated payment rates applicable to
HMOs because the plans do not need a regulatory ceiling on prices, and making payment
units mandatory risks interfering with HMOs’ use of financial incentives to influence the
use of physicians services, particularly specialists. Incentives include fee-for-service
payment, withholding partial payment and allocation of bonuses. These payment methods are
continually evolving and are considered a key element of managed care.
For a full copy please visit Journal of Health Policy, Politics and Law. (Subscription required.)
