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The response of the dominant firm to competition: the Ocean State case.

作者信息

Goldberg L G, Greenberg W

机构信息

Department of Finance, University of Miami, Coral Gables, FL, USA.

出版信息

Health Care Manage Rev. 1995 Winter;20(1):65-74. doi: 10.1097/00004010-199502010-00008.

Abstract

The Ocean State antitrust case illustrates the operation of the competitive marketplace in health insurance. Blue Cross, the dominant firm in Rhode Island, responded competitively to the entrance of a new competitor, Ocean State, in three ways: 1) a most-favored-nation clause, 2) creation of a PPO offering similar benefits as Ocean State, and 3) an adverse selection policy. These actions are assessed to be legitimate competitive responses and the decisions of the higher courts overturning the jury verdict against Blue Cross are supported.

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