HMOs and Twin Cities admission rates.

From 1977 to 1982, the admission rate in Minneapolis-St. Paul (Twin Cities) has been falling faster than the national average, and faster than the rate in selected comparison metropolitan areas. A natural question regards the impact of Twin Cities HMOs on decreased admission rates. This analysis shows that one's estimate of the HMO effect on total admission rates depends crucially on the estimated "spillover" effect, that is, the effect of HMOs on the non-HMO sector. Using secondary age-adjusted data, the analysis provides estimates of upper and lower bounds on the HMOs' effect on admission rates.