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July 21, 1999

Managed Care Market Share, Fee-for-Service Medicare, and Information Theory

Author Affiliations

Margaret A.WinkerMD, Deputy EditorIndividualAuthorPhil B.FontanarosaMD, Interim CoeditorIndividualAuthor

JAMA. 1999;282(3):235-236. doi:10-1001/pubs.JAMA-ISSN-0098-7484-282-3-jac90006

To the Editor: In examining the association between managed care market share and health care expenditures for fee-for-service Medicare patients, Dr Baker1 finds a significant inverse association between systemwide health maintenance organization (HMO) market share and Medicare fee-for-service expenditures. Baker suggests that HMO activity may influence fee-for-service expenditures through 3 factors: availability of medical infrastructure and services, physicians' adoption of neighboring physicians' behaviors, and changes in traditionally nonmanaged care insurers as response to the presence of managed care. Furthermore, Baker theorizes that lower service prices contribute little to decreased overall costs.

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