Asia Health Policy Program working paper #2
Since the mid-1980s, health maintenance organizations (HMOs) have grown rapidly in the United States. Despite initial successes in constraining health care costs, HMOs have come under increasing criticism due to their restrictive practices. To remain viable, this would seem to suggest that HMOs have to change at least some of these behaviors. However, there is little empirical evidence on how restrictive aspects of HMOs may be changing. The present study investigates one mechanism for constraining costs that is often associated with HMOs – the role of the primary care physician as a gatekeeper (e.g., monitoring patients’ use of specialist physicians). In particular, we estimate the effect of primary care physician involvement with HMOs on the percentage of their patients for whom these physicians serve as gatekeepers. We examine these relationships over two time periods: 2000-2001 and 2004-2005. Because physicians can choose whether and to what extent they will participate in HMOs, we employ instrumental variables (IV) estimation to correct for endogeneity of the HMO measure. Although the single-equation estimates suggest that the role of HMOs in terms of requiring primary care physicians to serve as gatekeepers diminished modestly over time, the endogeneity-corrected estimates show no changes between the two time periods. Thus, one major tool used by HMOs to constrain health care costs – the physician as gatekeeper – has not declined even in the era of managed care backlash.
Published: Fang, Hai, Hong Liu, and John A. Rizzo. "Has the use of physician gatekeepers declined among HMOs? Evidence from the United States." International journal of health care finance and economics 9.2 (2009): 183-195.