Preventive health care services are increasingly considered important, not only for their lifesaving aspects but for their cost-effectiveness, which many assume would prevail in a competitive health care market. This view was supported by empirical evidence until the mid-1990s, but since then the nature of competition among health plans and the utilization of preventive care have constantly been changing. Research has yet to provide a clear answer on how these changes are affecting competition and, in turn, how competition among health plans affects the utilization of preventive care. These primary research questions are addressed in this study through the use of insurance claims data in a multilevel model, not previously used in the study of preventive care. The results of multilevel logistic regression show that the greater the number of insured people enrolled in HMOs, the greater is the likelihood of receiving mammograms and Pap smears. However, if HMOs as a group are increasingly exercising their market power, given the degree of competition among them, the likelihood of receiving both types of preventive care in the market is reduced.
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