The impact of health maintenance organizations and competition on hospitals in Minneapolis/St. Paul

The Healthcare Educational and Research Foundation (HERF) in Minneapolis undertook a two-year research project to study the effects of health maintenance organizations (HMOs) and competition on the hospital industry in Minneapolis/St. Paul. This article summarizes HERF's major findings surrounding three key questions: (1) do the HMOs in Minneapolis/St. Paul use fewer hospital resources relative to conventional payers?; (2) do recent overall community trends in inpatient use suggest evidence of hospital utilization-reducing effects attributable to HMOs?; and (3) given the highly visible competitive process among Minneapolis/St. Paul providers, do hospital cost and revenue data suggest any evidence of cost-containment? The findings (based on data through 1982) indicate that for comparable patients, Twin Cities HMOs appear to use fewer medical care resources per hospitalized patient. There was, however, no clear evidence of community-wide, utilization-reducing effects directly attributable to the "competitive effect" of HMO introduction and development in the market. In addition, there was no empirical evidence that HMOs (which had enrolled 25 percent of the consumer market by 1982), or other large buyers of inpatient services, have selected hospitals on the basis of price as hypothesized by competition advocates.     

Book reviews

Roland Axtmann, Liberal democracy into the twenty‐first century: Globalization, integration and the nation‐state (Manchester University Press, Manchester, 1996), 198 pp., ISBN 0–7190–4304–2 (hb), 0–7190–4305–0 (pb)

Paul Kapteyn, The Stateless Market: The European Dilemma of Civilization (Routledge, London and New York, 1996), 194 pp., ISBN 0–415–12232–5 (hb), 0–415–12233–3 (pb)

Richard Werbner and Terence Ranger (eds), Postcolonial Identities in Africa (Zed Books, London & New Jersey, 1996), 292 pp., ISBN 1–85649–415–2 (hb), 1–85649–416–0 (pb)

Mark Wheeler, Politics and the Mass Media (Blackwell, Oxford, 1997), 274 pp., ISBN 0–631–19783–4 (hb), 0–631–19784–2 (pb)

Nigel Harris, The New Untouchables: Immigration and the New World Worker (Penguin Books, London, 1995), 254 pp., ISBN 0–14–014689‐X (pb)

Gilles Kepel, Allah in the West (Polity Press, Cambridge, 1997), 273 pp., ISBN 0–7456–1557–0 (hb), 0–7456–1558–9 (pb)

Leonard Weinberg, The Transformation of Italian Communism (Transaction Publishers, New Brunswick, New Jersey, 1995), 147 pp., ISBN 1–56000–180–1 (hb)

Brian Jenkins and Spyros A. Sofos (eds), Nation and Identity in Contemporary Europe (Routledge, London, 1996), x + 294pp., ISBN 0–415–12312–7 (hb), 0–415–12313–5 (pb)

Stuart Parkes, Understanding Contemporary Germany (Routledge, London, 1997), 247 pp., ISBN 0–415–14123–0 (hb), 0–415–14124–9 (pb)