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Reverse cross subsidization in healthcare capitation programs: evidence from Medicare Advantage
Zhaowei She1, Turgay Ayer2, Bilal Gokpinar3, Danny Hughes2
1Singapore Management University, Singapore; 2Georgia Institute of Technology; 3University College London
Capitation payment models have been increasingly adopted by the payers in the U.S. healthcare market during the past decade. Through a Difference-in-Difference (DID) design, this paper empirically demonstrates that Medicare Advantage (MA), the largest healthcare capitation program in the U.S., inadvertently incentivizes MA health plans to reallocate parts of the capitation payments from the sick to cross subsidize the healthy, a practice to which we refer as reverse cross subsidization.
Business model innovation for ambulance systems in developing Countries: ``Coordination and Competition"
Andreas K. Gernert1, Andre P. Calmon2, Gonzalo Romero3, Luk N. Van Wassenhove4
1Department of Logistics, Kühne Logistics University, 20457 Hamburg, Germany; 2Scheller College of Business, Georgia Institute of Technology, Atlanta, Georgia 30308, USA,; 3Rotman School of Management,University of Toronto, Toronto, Ontario M5S 3E6, Canada; 4INSEAD, Technology and Operations Management Area, 77305 Fontainebleau, France
Emergency transportation systems in developing countries often lack the capacity and coordination to serve patients.
We study the market entrance decision of an entrepreneur into an ETS in a region where independent ambulance providers compete for demand. The entrepreneur may decide (i) to acquire own ambulances to become a competing service provider, (ii) to operate a pure platform that exclusively coordinates existing providers, or (iii) to coordinate and compete by combining both strategies.
