Trends in managed care and managed competition, 1993-1997

Health Affairs

Volumn 18, Issue 6, 1999, Pages 75-88

  Susan Marquis, M ^a   Long, Stephen H ^a  

^a NONE

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; CLASSIFICATION; COST; ECONOMICS; HEALTH INSURANCE; HUMAN; ORGANIZATION AND MANAGEMENT; QUESTIONNAIRE; STATISTICAL MODEL; UNITED STATES;

COSTS AND COST ANALYSIS; HEALTH BENEFIT PLANS, EMPLOYEE; HUMANS; MANAGED CARE PROGRAMS; MANAGED COMPETITION; MODELS, ECONOMIC; PRIVATE SECTOR; PUBLIC SECTOR; QUESTIONNAIRES; UNITED STATES;

EID: 0002549330     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.18.6.75     Document Type: Article

References (63)

1. T. Bodenheimer and K. Sullivan, "How Large Employers Are Shaping the Health Care Marketplace," New England Journal of Medicine (2 April 1998): 1003-1007; and R. Kuttner, "The American Health Care System: Employer-Sponsored Health Insurance," New England Journal of Medicine (21 January 1999): 248-252.
2. T. Bodenheimer and K. Sullivan, "How Large Employers Are Shaping the Health Care Marketplace," New England Journal of Medicine (2 April 1998): 1003-1007; and R. Kuttner, "The American Health Care System: Employer-Sponsored Health Insurance," New England Journal of Medicine (21 January 1999): 248-252.
3. A.C. Enthoven, "Consumer Choice Health Plan: A National Health Insurance Proposal Based on Regulated Competition in the Private Sector," New England Journal of Medicine (26 March 1978): 709-720; A.C. Enthoven, "Managed Competition: An Agenda for Action," Health Affairs (Summer 1988): 25-47; A.C. Enthoven and R. Kronick, "A Consumer Choice Health Plan for the 1990s," New England Journal of Medicine (5 January 1989): 29-37, 94-101; and A.C. Enthoven, "Multiple Choice Health Insurance: The Lessons and Challenge to Employers," Inquiry (Winter 1990): 368-373.
4. A.C. Enthoven, "Consumer Choice Health Plan: A National Health Insurance Proposal Based on Regulated Competition in the Private Sector," New England Journal of Medicine (26 March 1978): 709-720; A.C. Enthoven, "Managed Competition: An Agenda for Action," Health Affairs (Summer 1988): 25-47; A.C. Enthoven and R. Kronick, "A Consumer Choice Health Plan for the 1990s," New England Journal of Medicine (5 January 1989): 29-37, 94-101; and A.C. Enthoven, "Multiple Choice Health Insurance: The Lessons and Challenge to Employers," Inquiry (Winter 1990): 368-373.
5. A.C. Enthoven, "Consumer Choice Health Plan: A National Health Insurance Proposal Based on Regulated Competition in the Private Sector," New England Journal of Medicine (26 March 1978): 709-720; A.C. Enthoven, "Managed Competition: An Agenda for Action," Health Affairs (Summer 1988): 25-47; A.C. Enthoven and R. Kronick, "A Consumer Choice Health Plan for the 1990s," New England Journal of Medicine (5 January 1989): 29-37, 94-101; and A.C. Enthoven, "Multiple Choice Health Insurance: The Lessons and Challenge to Employers," Inquiry (Winter 1990): 368-373.
6. A.C. Enthoven, "Consumer Choice Health Plan: A National Health Insurance Proposal Based on Regulated Competition in the Private Sector," New England Journal of Medicine (26 March 1978): 709-720; A.C. Enthoven, "Managed Competition: An Agenda for Action," Health Affairs (Summer 1988): 25-47; A.C. Enthoven and R. Kronick, "A Consumer Choice Health Plan for the 1990s," New England Journal of Medicine (5 January 1989): 29-37, 94-101; and A.C. Enthoven, "Multiple Choice Health Insurance: The Lessons and Challenge to Employers," Inquiry (Winter 1990): 368-373.
7. J.R. Gabel, P.B. Ginsburg, and K.A. Hunt, "Small Employers and Their Health Benefits, 1988-1996: An Awkward Adolescence," Health Affairs (September/October 1997): 103-110; and J.R. Gabel and K. Hurst, Health Benefits in 1998: Executive Summary (Washington: KPMG Peat Marwick, 1998).
8. J.R. Gabel, P.B. Ginsburg, and K.A. Hunt, "Small Employers and Their Health Benefits, 1988-1996: An Awkward Adolescence," Health Affairs (September/October 1997): 103-110; and J.R. Gabel and K. Hurst, Health Benefits in 1998: Executive Summary (Washington: KPMG Peat Marwick, 1998).
9. U.S. General Accounting Office, Employment-Based Health Insurance: Costs Increase and Family Coverage Decreases, GAO/HEHS-97-35 (Washington: GAO, 1997).
10. G. Jensen et al., "The New Dominance of Managed Care: Insurance Trends in the 1990s," HealthAffairs (January/February 1997): 125-136.
11. Gabel and Hurst, Health Benefits in 1998.
12. P.B. Ginsburg and J.D. Pickreign, "Tracking Health Care Costs," Health Affairs (Fall 1996): 140-149; and D.M. Cutler and L. Sheiner, "Managed Care and the Growth of Medical Expenditures," in Frontiers in Health Policy Research, ed. A.M. Garber (Cambridge, Mass.: MIT Press, 1998), 77-116.
13. P.B. Ginsburg and J.D. Pickreign, "Tracking Health Care Costs," Health Affairs (Fall 1996): 140-149; and D.M. Cutler and L. Sheiner, "Managed Care and the Growth of Medical Expenditures," in Frontiers in Health Policy Research, ed. A.M. Garber (Cambridge, Mass.: MIT Press, 1998), 77-116.
14. For example, on lower premiums from offering HMOs, see G. Gifford et al., "A Simultaneous Equations Model of Employer Strategies for Controlling Health Benefit Costs," Inquiry (Spring 1994): 56-66. For different views, see U.S. GAO, Managed Health Care: Effect on Employers' Costs Difficult to Measure, GAO/HRD-94-3 (Washington: GAO, October 1993); and R. Feldman, B. Dowd, and G. Gifford, "The Effect of HMOs on Premiums in Employment-Based Health Plans," Health Services Research (February 1993): 779-811.
15. For example, on lower premiums from offering HMOs, see G. Gifford et al., "A Simultaneous Equations Model of Employer Strategies for Controlling Health Benefit Costs," Inquiry (Spring 1994): 56-66. For different views, see U.S. GAO, Managed Health Care: Effect on Employers' Costs Difficult to Measure, GAO/HRD-94-3 (Washington: GAO, October 1993); and R. Feldman, B. Dowd, and G. Gifford, "The Effect of HMOs on Premiums in Employment-Based Health Plans," Health Services Research (February 1993): 779-811.
16. For example, on lower premiums from offering HMOs, see G. Gifford et al., "A Simultaneous Equations Model of Employer Strategies for Controlling Health Benefit Costs," Inquiry (Spring 1994): 56-66. For different views, see U.S. GAO, Managed Health Care: Effect on Employers' Costs Difficult to Measure, GAO/HRD-94-3 (Washington: GAO, October 1993); and R. Feldman, B. Dowd, and G. Gifford, "The Effect of HMOs on Premiums in Employment-Based Health Plans," Health Services Research (February 1993): 779-811.
17. On HMOs' producing lower costs throughout the system, see J.C. Robinson, "HMO Market Penetration and Hospital Cost Inflation in California," Journal of the American Medical Association (20 November 1991): 2719-2723; D. Gaskin and J. Hadley, "The Impact of HMO Penetration on the Rate of Hospital Cost Inflation: 1985-1993," Inquiry (Fall 1997): 205-216; and L.C. Baker, "Association of Managed Care Market Share and Health Expenditures for Fee-for-Service Medicare Patients," Journal of the American Medical Association (3 February 1997): 432-437. For different views, see R. Feldman et al., "The Competitive Impact of Health Maintenance Organizations on Hospital Finances: An Exploratory Study," Journal of Health Politics, Policy and Law (Winter 1986): 675-698; and L.C. Baker and K.S. Corts, "HMO Penetration and the Cost of Health Care: Market Discipline and Market Segmentation," American Economic Review: Papers and Proceedings (May 1996): 389-394.
18. On HMOs' producing lower costs throughout the system, see J.C. Robinson, "HMO Market Penetration and Hospital Cost Inflation in California," Journal of the American Medical Association (20 November 1991): 2719-2723; D. Gaskin and J. Hadley, "The Impact of HMO Penetration on the Rate of Hospital Cost Inflation: 1985-1993," Inquiry (Fall 1997): 205-216; and L.C. Baker, "Association of Managed Care Market Share and Health Expenditures for Fee-for-Service Medicare Patients," Journal of the American Medical Association (3 February 1997): 432-437. For different views, see R. Feldman et al., "The Competitive Impact of Health Maintenance Organizations on Hospital Finances: An Exploratory Study," Journal of Health Politics, Policy and Law (Winter 1986): 675-698; and L.C. Baker and K.S. Corts, "HMO Penetration and the Cost of Health Care: Market Discipline and Market Segmentation," American Economic Review: Papers and Proceedings (May 1996): 389-394.
19. On HMOs' producing lower costs throughout the system, see J.C. Robinson, "HMO Market Penetration and Hospital Cost Inflation in California," Journal of the American Medical Association (20 November 1991): 2719-2723; D. Gaskin and J. Hadley, "The Impact of HMO Penetration on the Rate of Hospital Cost Inflation: 1985-1993," Inquiry (Fall 1997): 205-216; and L.C. Baker, "Association of Managed Care Market Share and Health Expenditures for Fee-for-Service Medicare Patients," Journal of the American Medical Association (3 February 1997): 432-437. For different views, see R. Feldman et al., "The Competitive Impact of Health Maintenance Organizations on Hospital Finances: An Exploratory Study," Journal of Health Politics, Policy and Law (Winter 1986): 675-698; and L.C. Baker and K.S. Corts, "HMO Penetration and the Cost of Health Care: Market Discipline and Market Segmentation," American Economic Review: Papers and Proceedings (May 1996): 389-394.
20. On HMOs' producing lower costs throughout the system, see J.C. Robinson, "HMO Market Penetration and Hospital Cost Inflation in California," Journal of the American Medical Association (20 November 1991): 2719-2723; D. Gaskin and J. Hadley, "The Impact of HMO Penetration on the Rate of Hospital Cost Inflation: 1985-1993," Inquiry (Fall 1997): 205-216; and L.C. Baker, "Association of Managed Care Market Share and Health Expenditures for Fee-for-Service Medicare Patients," Journal of the American Medical Association (3 February 1997): 432-437. For different views, see R. Feldman et al., "The Competitive Impact of Health Maintenance Organizations on Hospital Finances: An Exploratory Study," Journal of Health Politics, Policy and Law (Winter 1986): 675-698; and L.C. Baker and K.S. Corts, "HMO Penetration and the Cost of Health Care: Market Discipline and Market Segmentation," American Economic Review: Papers and Proceedings (May 1996): 389-394.
21. On HMOs' producing lower costs throughout the system, see J.C. Robinson, "HMO Market Penetration and Hospital Cost Inflation in California," Journal of the American Medical Association (20 November 1991): 2719-2723; D. Gaskin and J. Hadley, "The Impact of HMO Penetration on the Rate of Hospital Cost Inflation: 1985-1993," Inquiry (Fall 1997): 205-216; and L.C. Baker, "Association of Managed Care Market Share and Health Expenditures for Fee-for-Service Medicare Patients," Journal of the American Medical Association (3 February 1997): 432-437. For different views, see R. Feldman et al., "The Competitive Impact of Health Maintenance Organizations on Hospital Finances: An Exploratory Study," Journal of Health Politics, Policy and Law (Winter 1986): 675-698; and L.C. Baker and K.S. Corts, "HMO Penetration and the Cost of Health Care: Market Discipline and Market Segmentation," American Economic Review: Papers and Proceedings (May 1996): 389-394.
22. R.J. Blendon et al., "Understanding the Managed Care Backlash," Health Affairs (July/August 1998): 80-94; A.C. Enthoven and S.J. Singer, "The Managed Care Backlash and the Task Force in California," Health Affairs (July/August 1998): 95-110. and M. Brodie, L.A. Brady, and D.E. Altman, "Media Coverage of Managed Care: Is There a Negative Bias?" Health Affairs (January/February 1998): 9-25.
23. R.J. Blendon et al., "Understanding the Managed Care Backlash," Health Affairs (July/August 1998): 80-94; A.C. Enthoven and S.J. Singer, "The Managed Care Backlash and the Task Force in California," Health Affairs (July/August 1998): 95-110. and M. Brodie, L.A. Brady, and D.E. Altman, "Media Coverage of Managed Care: Is There a Negative Bias?" Health Affairs (January/February 1998): 9-25.
24. R.J. Blendon et al., "Understanding the Managed Care Backlash," Health Affairs (July/August 1998): 80-94; A.C. Enthoven and S.J. Singer, "The Managed Care Backlash and the Task Force in California," Health Affairs (July/August 1998): 95-110. and M. Brodie, L.A. Brady, and D.E. Altman, "Media Coverage of Managed Care: Is There a Negative Bias?" Health Affairs (January/February 1998): 9-25.
25. Gabel and Hurst, Health Benefits in 1998.
26. Enthoven and Kronick, "A Consumer Choice Health Plan for the 1990s;" and Enthoven, "Multiple Choice Health Insurance."
27. Enthoven and Kronick, "A Consumer Choice Health Plan for the 1990s;" and Enthoven, "Multiple Choice Health Insurance."
28. T.C. Buchmueller and P.J. Feldstein, "The Effect of Price on Switching among Health Plans," Journal of Health Economics (1 April 1997): 231-247; D.M. Cutler and R.J. Zeckhauser, "Adverse Selection in Health Insurance," NBER Working Paper (Cambridge, Mass.: National Bureau of Economic Research, 1997); and R. Feldman and B. Dowd, "The Effectiveness of Managed Competition: Results from a Natural Experiment" (Presented at an American Enterprise Institute conference, Washington, D.C., 21-22 April 1993).
29. T.C. Buchmueller and P.J. Feldstein, "The Effect of Price on Switching among Health Plans," Journal of Health Economics (1 April 1997): 231-247; D.M. Cutler and R.J. Zeckhauser, "Adverse Selection in Health Insurance," NBER Working Paper (Cambridge, Mass.: National Bureau of Economic Research, 1997); and R. Feldman and B. Dowd, "The Effectiveness of Managed Competition: Results from a Natural Experiment" (Presented at an American Enterprise Institute conference, Washington, D.C., 21-22 April 1993).
30. T.C. Buchmueller and P.J. Feldstein, "The Effect of Price on Switching among Health Plans," Journal of Health Economics (1 April 1997): 231-247; D.M. Cutler and R.J. Zeckhauser, "Adverse Selection in Health Insurance," NBER Working Paper (Cambridge, Mass.: National Bureau of Economic Research, 1997); and R. Feldman and B. Dowd, "The Effectiveness of Managed Competition: Results from a Natural Experiment" (Presented at an American Enterprise Institute conference, Washington, D.C., 21-22 April 1993).
31. T.C. Buchmueller, "Managed Competition in California's Small-Group Insurance Market," Health Affairs (March/April 1997): 218-228; and D.M. Cutler and S. Reber, "Paying for Health Insurance: The Trade-Off between Competition and Adverse Selection," Quarterly Journal of Economics (May 1998): 433-466.
32. T.C. Buchmueller, "Managed Competition in California's Small-Group Insurance Market," Health Affairs (March/April 1997): 218-228; and D.M. Cutler and S. Reber, "Paying for Health Insurance: The Trade-Off between Competition and Adverse Selection," Quarterly Journal of Economics (May 1998): 433-466.
33. Ibid.; and S.C. Hill and B.L. Wolfe, "Testing the HMO Competitive Strategy: An Analysis of Its Impact on Medial Care Resources," Journal of Health Economics (1 June 1997): 261-286.
34. Ibid.; and S.C. Hill and B.L. Wolfe, "Testing the HMO Competitive Strategy: An Analysis of Its Impact on Medial Care Resources," Journal of Health Economics (1 June 1997): 261-286.
35. Buchmueller, "Managed Competition."
36. Enthoven, "Multiple Choice Health Insurance."
37. Jensen et al., "The New Dominance of Managed Care;" and K.A. Hunt et al., "Paying More Twice: When Employers Subsidize Higher-Cost Health Plans," Health Affairs (November/December 1997): 150-156.
38. Jensen et al., "The New Dominance of Managed Care;" and K.A. Hunt et al., "Paying More Twice: When Employers Subsidize Higher-Cost Health Plans," Health Affairs (November/December 1997): 150-156.
39. Hunt et al., "Paying More Twice."
40. S.B. Jones, "Multiple Choice Health Insurance: The Lessons and Challenge to Private Insurers," Inquiry (Summer 1990): 161-166.
41. Ibid.
42. K. Davis et al., "Choice Matters: Enrollees' Views of Their Health Plans," Health Affairs (Summer 1995): 99-112; and A.A. Gawande et al., "Does Dissatisfaction with Health Plans Stem from Having No Choices?" Health Affairs (September/October 1998): 184-194.
43. K. Davis et al., "Choice Matters: Enrollees' Views of Their Health Plans," Health Affairs (Summer 1995): 99-112; and A.A. Gawande et al., "Does Dissatisfaction with Health Plans Stem from Having No Choices?" Health Affairs (September/October 1998): 184-194.
44. Kuttner, "The American Health Care System;" and S.B. Jones, "Can Multiple Choice Be Managed to Constrain Health Care Costs?" Health Affairs (Fall 1989): 51-59.
45. Kuttner, "The American Health Care System;" and S.B. Jones, "Can Multiple Choice Be Managed to Constrain Health Care Costs?" Health Affairs (Fall 1989): 51-59.
46. Gabel et al., "Small Employers and Their Health Benefits;" Gabel and Hurst, Health Benefits in 1998; Jensen et al., "The New Dominance Of Managed Care;" Kuttner, "The American Health Care System;" and GAO, Employment-Based Health Insurance.
47. Gabel et al., "Small Employers and Their Health Benefits;" Gabel and Hurst, Health Benefits in 1998; Jensen et al., "The New Dominance Of Managed Care;" Kuttner, "The American Health Care System;" and GAO, Employment-Based Health Insurance.
48. Gabel et al., "Small Employers and Their Health Benefits;" Gabel and Hurst, Health Benefits in 1998; Jensen et al., "The New Dominance Of Managed Care;" Kuttner, "The American Health Care System;" and GAO, Employment-Based Health Insurance.
49. Gabel et al., "Small Employers and Their Health Benefits;" Gabel and Hurst, Health Benefits in 1998; Jensen et al., "The New Dominance Of Managed Care;" Kuttner, "The American Health Care System;" and GAO, Employment-Based Health Insurance.
50. Gabel et al., "Small Employers and Their Health Benefits;" Gabel and Hurst, Health Benefits in 1998; Jensen et al., "The New Dominance Of Managed Care;" Kuttner, "The American Health Care System;" and GAO, Employment-Based Health Insurance.
51. For details on the NEHIS, see A.J. Moss, Plan and Operation of the National Employer Health Insurance Survey (Hyattsville, Md.: National Center for Health Statistics, 1999).
52. See 1997 Employer Health Insurance Survey: Final Methodology Report (Research Triangle Park, N.C.: Research Triangle Institute, 1998); and P. Kemper et al., "The Design of the Community Tracking Study: A Longitudinal Study of Health System Change and Its Effects on People," Inquiry (Summer 1996): 195-208.
53. See 1997 Employer Health Insurance Survey: Final Methodology Report (Research Triangle Park, N.C.: Research Triangle Institute, 1998); and P. Kemper et al., "The Design of the Community Tracking Study: A Longitudinal Study of Health System Change and Its Effects on People," Inquiry (Summer 1996): 195-208.
54. Self-employed individuals with no employees are excluded.
55. These adjustments had a very minor effect on our estimates. However, because employers' decisions to offer insurance vary greatly by firm size, we made the adjustment so that differences in the estimates would not simply reflect differences in realized samples.
56. These algorithms differ from those used by the NCHS for creation of their internal analytic files. Therefore, the NEHIS estimates presented here may differ slightly from the NEHIS estimates published elsewhere.
57. We have not reported standard errors of the differences in the exhibits because this is a descriptive paper. We comment only on statistically significant results or indicate that the finding is not significant.
58. In the 1997 survey the four types of plans were named in the question. In 1993 the question named plan types HMO, PPO, conventional, and combination plans; a plan reported to be a combination of an HMO and a plan that paid for out-of-plan services was coded as a POS plan. We also compared our results using an alternative plan classification that modified the self-assessment based on characteristics of the plan - that is, whether out-of-plan costs were covered and whether the plan had a network (1997 survey). Conclusions using the alternative classification were unchanged.
59. Results for family premiums were similar to those for single premiums, so they are not reported here.
60. This finding is in contrast to that of Jensen and colleagues, who found some increase in the percentage of workers who were offered a choice of plans between 1993 and 1995. Jensen et al., "The New Dominance of Managed Care."
61. T. Rice et al., Trends in Job-Based Health Insurance Coverage, Henry J. Kaiser Family Foundation Policy Report (Los Angeles: UCLA Center for Health Policy Research, June 1998), also found no difference in overall premiums between firms responding to the 1993 and 1996 KPMG surveys that offered and did not offer a choice of type of plan. However, the authors report that firms offering a choice tended to have lower premium increases.
62. Counting employees rather than employers, 27 percent paid the full difference in premiums, 40 percent paid a fixed share of the premium, 28 percent had no out-of-pocket payment for self-only coverage, and 6 percent paid the same amount for all plans.
63. Gabel and Hurst, Health Benefits in 1998.