The relationship between health plan advertising and market incentives: Evidence of risk-selective behavior

Health Affairs

Volumn 25, Issue 3, 2006, Pages 759-765

  Mehrotra, Ateev ^a,b   Grier, Sonya ^c   Dudley, R Adams ^d  

^a HARVARD MEDICAL SCHOOL   (United States)

^b BRIGHAM AND WOMEN S HOSPITAL   (United States)

^c UNIVERSITY OF PENNSYLVANIA   (United States)

^d UNIVERSITY OF CALIFORNIA   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ADVERTIZING; AGED; ARTICLE; ECONOMIC ASPECT; ECONOMICS; HEALTH CARE COST; HEALTH INSURANCE; HEALTH STATUS; HUMAN; INSURANCE; MEDICARE; ORGANIZATION AND MANAGEMENT; PRESCRIPTION; UNITED STATES;

ADVERTISING; ADVERTISING AS TOPIC; AGED; DRUG PRESCRIPTIONS; ECONOMIC COMPETITION; HEALTH CARE SECTOR; HEALTH STATUS; HUMANS; INSURANCE SELECTION BIAS; INSURANCE, PHARMACEUTICAL SERVICES; MEDICARE; PRESCRIPTIONS, DRUG; PRIVATIZATION; UNITED STATES;

EID: 33744749213     PISSN: 02782715     EISSN: 02782715     Source Type: Journal    
DOI: 10.1377/hlthaff.25.3.759     Document Type: Article

References (38)

1. Centers for Medicare and Medicaid Services, "Medicare Beneficiaries to Have More Health Plan Choices and Greater Savings with Medicare Advantage Plans than Ever Before," Press Release, 30 June 2005, http://www.cms.hhs. gov/apps/media/press/release.asp?Counter=1497 (accessed 28 March 2005);
2. and R.A. Berenson, "Medicare Disadvantaged and the Search for the Elusive 'Level Playing Field'," Health Affairs 23 (2004): w574-w585 (published online 15 December 2004; 10.1377/hlthaff.w4.572).
3. See, for example, B. Biles, G. Dallek, and L.H. Nicholas, "Medicare Advantage: Déjà Vu All Over Again?" Health Affairs 23 (2004): w586-w597 (published online 15 December 2004; 10.1377/hlthaff.w4.586);
4. and G. Dallek et al., "Lessons from Medicare+Choice for Medicare Reform," Policy Brief (New York: Commonwealth Fund, 2003).
5. See, for example, C. Harrington, R.J. Newcomer, and T.G. Moore, "Factors That Contribute to Medicare HMO Risk Contract Success," Inquiry 25, no. 2 (1988): 251-262;
6. and H.S. Luft and R.H. Miller, "Patient Selection in a Competitive Health Care System," Health Affairs 7, no. 3 (1988): 97-119.
7. Examples include R.O.Morgan et al., "The Medicare-HMO Revolving Door - The Healthy Go In and the Sick Go Out," New England Journal of Medicine 337, no. 3 (1997): 169-175;
8. and M. Gold et al., "Disabled Medicare Beneficiaries in HMOs," Health Affairs 16, no. 5 (1997): 149-162.
9. For evidence of risk selection, see S. Nicholson, "The Magnitude and Nature of Risk Selection in Employer-Sponsored Health Plans," Health Services Research 39, no. 6, Part 1 (2004): 1817-1838.
10. Biles, "Medicare Advantage";
11. C. Boccuti and M. Moon, "Adverse Selection in Private, Stand-Alone Drug Plans and Techniques to Reduce It," Policy Brief (New York: Commonwealth Fund, 2003);
12. and M.V. Wrobel et al., "Predictability of Prescription Drug Expenditures for Medicare Beneficiaries,"Health Care Financing Review 25, no. 2 (2003): 37-46.
13. Luft and Miller, "Patient Selection";
14. Harrington et al., "Factors That Contribute";
15. and R. Lichtenstein et al., "HMO Marketing and Selection Bias: Are TEFRA HMOs Skimming?" Medical Care 30, no. 4 (1992): 329-346.
16. Luft and Miller, "Patient Selection,"
17. discuss this issue. L. Nelson et al., "Access to Care in Medicare HMOs, 1996," Health Affairs 16, no. 2 (1997): 148-156;
18. L. Achman and M. Gold, Out-of-Pocket Health Care Expenses for Medicare HMO Beneficiaries: Estimates by Health Status, 1999-2001 (New York: Commonwealth Fund, 2002), show why sicker patients might leave an HMO.
19. K.T. Call et al., "Selection Experiences in Medicare HMOs: Pre-Enrollment Expenditures," Health Care Financing Review 20, no. 4 (1999): 197-209.
20. P. Neuman et al., "Marketing HMOs to Medicare Beneficiaries," Health Affairs 17, no. 4 (1998): 132-139.
21. J.C. Robinson, "HMO Market Penetration and Hospital Cost Inflation in California," Journal of the American Medical Association 266, no. 19 (1991): 2719-2723;
22. and L.C. Baker, "Managed Care Spill-over Effects," Annual Review of Public Health 24 (2003): 435-456.
23. D. Wholey, R. Feldman, and J.B. Christianson, "The Effect of Market Structure on HMO Premiums," Journal of Health Economics 14, no. 1 (1995): 81-105;
24. and M.V. Pauly et al., "Competitive Behavior in the HMO Marketplace," Health Affairs 21, no. 1 (2002): 194-202.
25. The evidence for this is circumstantial. We believe that the evidence in Wholey et al., "The Effect of Market Structure," is notable for decreasing profits and risk selection as other types of health plans become more competitive.
26. S.Moorthy and S.A. Hawkins, "Advertising Repetition and Quality Perception," Journal of Business Research 58, no. 3 (2005): 354-360.
27. See, for example, R.A. Bell, R.L. Kravitz, and M.S. Wilkes, "Direct-to-Consumer Prescription Drug Advertising, 1989-1998: A Content Analysis of Conditions, Targets, Inducements, and Appeals," Journal of Family Practice 49, no. 4 (2000): 329-335;
28. M.T. Cardador, A.R. Hazan, and S.A. Glantz, "Tobacco Industry Smokers' Rights Publications: A Content Analysis," American Journal of Public Health 85, no. 9 (1995): 1212-1217;
29. and E.D. Balbach and S.A. Glantz, "Tobacco Information in Two Grade School Newsweeklies: A Content Analysis," American Journal of Public Health 85, no. 12 (1995): 1650-1653.
30. M. Lombard, J. Snyder-Duch, and C.C. Bracken, "Content Analysis in Mass Communication: Assessment and Reporting of Intercoder Reliability," Human Communication Research 28, no. 4 (2002): 587-604.
31. Luft and Miller, "Patient Selection";
32. Harrington et al., "Factors That Contribute";
33. Lichtenstein et al., "HMO Marketing";
34. and Neuman et al., "Marketing HMOs."
35. InterStudy, Competitive Edge MSA Profile Database, Version 9.2 (St. Paul, Minn.: InterStudy Publications, January 1999).
36. For examples of "attract healthy" and "attract sick" ads, see http://content.healthaffairs.org/cgi/content/full/25/3/759/DC1.
37. G.C. Pope et al., "Risk Adjustment of Medicare Capitation Payments Using the CMS-HCC Model," Health Care Financing Review 25, no. 4 (2004): 119-141.
38. Boccuti and Moon, "Adverse Selection."