MANAGED CARE, MARKET STAGES, AND INTEGRATED DELIVERY SYSTEMS - IS THERE A RELATIONSHIP

This DataWatch evaluates four-stage models of market evolution develop ed initially by the University HealthSystem Consortium (UHC). Such mod els suggest that increasing health maintenance organization (HMO) pene tration is linked with increases in hospital consolidation and vertica l integration between physicians and hospitals. These claims are teste d using national data for 1992-1995. Results suggest that such models accurately classify the markets of UHC member hospitals according to t heir levels of HMO penetration only. Moreover, they do not discern evo lutionary stages of market development and may not be generalizable to the markets of non-UHC member hospitals. Researchers and policymakers should exercise caution in applying such models.