Title

On the Relationship between HMO Board Composition and Financial Performance

Document Type

Article

Publication Date

4-1996

Abstract

This article focuses on how corporate governance influences the financial performance (as measured by the administrative expense ratio) of an HMO. Specifically, we examine the roles of physicians and plan administrators on the board of directors. These parties are assumed to behave as "insiders" because of their specialized knowledge. The empirical results indicate that administrative expenses for an HMO increase with an increasing proportion of physicians on the board, but tend to decrease as the proportion of administrators increases. While both groups are considered insiders, physicians and administrators seem to use the information they possess to different ends.

Language

English

Comments

This article is the authors' final published version in Journal of Insurance Issues, Volume 19, Issue 1, April 1996, Pages 23-38.

The published version is available at https://go.exlibris.link/pVD5dyBh. Copyright © Western Risk and Insurance Association

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