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Clinton Administration Awards 10 Research Grants to Study Changes in Health Care Markets
Press Release Date: November 13, 1995
The Agency for Health Care Policy and Research today announced
the award of 10 research grants to study changes that are now
re-shaping America's health care system as a result of complex
market forces. The grants totaled $1.4 million for the first
year. Most of the projects will be completed in two years or
"We are delighted by the exceptionally high quality of the
research proposals we have received for in-depth study of health
care market forces," said AHCPR Administrator Clifton R. Gaus,
Sc.D. "The proposals selected for funding represent our sense of
priorities for responding to essential information needs."
Dr. Gaus said the delivery of health care services in the United
States is now undergoing dramatic transformation. Changes
include, for example, mergers and consolidation of health care
organizations; a move toward greater collective purchasing of
health care and health insurance; and innovations that are
brought about by single large employers—providers of employee
health benefits—who are seeking more value for their healthcare
"The growth of managed care organizations and a decline in the
number of independent hospitals and physician groups are among
the most obvious changes that have occurred in response to market
forces," Dr. Gaus said.
There is currently limited information about the types of market
structures and organizations that are emerging in the health care
sector. Even less is known about how these structures are
influencing the competitive strategies of health providers and
insurers, the quality and types of care available in the market,
or the price and equitable distribution of services.
Some key research questions to be addressed by the grantees
include: How has HMO market structure influenced formation of
provider networks? What have been the effects on costs and
premiums? How do rural providers perceive and respond to market
changes? Do hospital mergers reduce costs? Are savings passed on
to consumers as lower prices? Are savings retained by hospitals
as higher profits?
"Answers to these and other research questions are needed as a
basis for discussion by all participants in the health care
system—in both the public and private sectors," Dr. Gaus said.
"Research will provide purchasers and providers of health care
with an evidence-based understanding of what structural and
behavioral changes are taking place in health care markets,
how and why these changes are occurring, and their implications."
Following is a list of recipients and amounts of awards for new
AHCPR grants for research on topics related to "market forces in
a changing health care system":
- Georgetown University, Washington, D.C., "Effects of managed care
on physicians and their practices": $183,000.
- University of Alabama, Birmingham, "Effects of managed care on
hospital and physician integration": $160,000.
- University of Pennsylvania, Philadelphia, "Impact of HMOs on
integrated networks and services": $139,000.
- University of Illinois, at Chicago, "Impact of managed care on
physician markets": $150,000.
- University of Nebraska Medical Center, Omaha, "Impact of changing
markets on rural health care providers": $108,000.
- University of Pennsylvania, Philadelphia, "Efficiency in
hospitals: Do HMOs and Preferred Provider Organizations 'buy
- University of Minnesota, Minneapolis, "Effects of horizontal
hospital mergers on efficiency, profitability and consumer
- RAND, Santa Monica, Calif., "Health care markets, managed care,
and hospital performance": $195,000.
- Carnegie Mellon University, Pittsburgh, Pa., "Determinants of HMO
efficiency from 1985 to 1994": $88,000.
- Virginia Commonwealth University, Richmond, "Performance of
strategic hospital collectives": $140,000.
The studies of health care markets funded by AHCPR complement
studies of changes in health care financing and organization
sponsored by the Robert Wood Johnson Foundation (RWJ), a national
philanthropy devoted to health care. Efforts were made to
coordinate the research portfolios of AHCPR and RWJ to avoid
Note to Editors: Descriptions of individual research projects
are available upon request.
For additional information, contact AHCPR Public Affairs: Karen Migdail, (301) 427-1855.