This paper develops county-level estimates of HMO market share for all counties in the United States and uses them to examine the relationship between HMO market share and the fee for a normal office visit with an established patient charged by 2,845 fee-for-service (FFS) physicians. Two-stage least squares estimates indicate that increases of 10 percentage points in HMO market share are associated with decreases of approximately 11 percent in the normal office visit fee. However, further examination indicates that the incomes of the physicians in the sample are not lower in areas with higher HMO market share. In addition, the quantity of services provided, measured by the number of hours worked and the number of patients seen per week, is not higher in these areas. While it is possible that physicians induce demand to change the volume or mix of services provided to patients in ways that do not affect the number of hours worked or patients seen, another hypothesis consistent with these findings is that FFS physicians respond to competition from HMOs by adopting multi-part pricing strategies in which the price for an office visit is reduced but prices for other services are raised.

Background: The California Diabetes and Pregnancy Program is a new preventive approach to improving pregnancy outcomes through intensive diabetes management preconception and early in pregnancy.

Methods: Hospital charges and length of stay data were collected on 102 program enrollees and 218 control cases. Ninety program enrollees and 90 control cases were matched on mother's age. White's classification, and race. Regression models controlled for these variables in addition to MediCal status, birth weight, and enrollment in the program.

Results: Hospital charges were about 30% less for program participants and days in the hospital were roughly 25% less. The program effects were larger for women that enrolled before 8 weeks gestation. More serious diabetics were also found to have larger reductions in charges and days.

Conclusion: After adjusting for inflation and differences in charges across hospitals, $5.19 is saved for every dollar spent on the program.

Professional liability costs and fear of lawsuits have made participation in Medicaid difficult for office-based physicians who provide prenatal care, both obstetricians and family physicians. We assessed the possible impact of changes in three liability policy reforms on expanding access of Medicaid-eligible pregnant women to these private physicians. We surveyed members of the New York State District of the American College of Obstetricians and Gynecologists and the New York Academy of Family Physicians to explore whether they would start, expand, or resume obstetric service to Medicaid patients in response to a ceiling on litigation awards, no-fault insurance and a subsidy for liability expenses. We then compared the reported increases in participation on the basis of liability reforms to those in response to changes in Medicaid policies. We found in general that the three liability reforms would have similar impacts on Medicaid participation, although a subsidy was indicated by fewer physicians than the ceiling or no-fault approaches. The support for the liability reforms was as effective as proposals of greater reimbursement rates. The proportion of obstetricians or family physicians increasing their participation depended more on whether they would be starting Medicaid participation, expanding existing Medicaid participation or resuming former Medicaid participation than on the particular liability policy.