Competition in health insurance markets: Limitations of current measures for policy analysis

Dennis P. Scanlon, Michael Chernew, Shailender Swaminathan, Woolton Lee

Research output: Contribution to journalReview articlepeer-review

22 Scopus citations


Health care reform proposals often rely on increased competition in health insurance markets to drive improved performance in health care costs, access, and quality. We examine a range of data issues related to the measures of health insurance competition used in empirical studies published from 1994-2004. The literature relies exclusively on market structure and penetration variables to measure competition. While these measures are correlated, the degree of correlation is modest, suggesting that choice of measure could influence empirical results. Moreover, certain measurement issues such as the lack of data on PPO enrollment, the treatment of small firms, and omitted market characteristics also could affect the conclusions in empirical studies. Importantly, other types of measures related to competition (e.g., the availability of information on price and outcomes, degree of entry barriers, etc.) are important from both a theoretical and policy perspective, but their impact on market outcomes has not been widely studied.

Original languageEnglish (US)
Pages (from-to)37S-55S
JournalMedical Care Research and Review
Issue number6
StatePublished - Dec 2006

All Science Journal Classification (ASJC) codes

  • Health Policy


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