Do Medicare Advantage plans select enrollees in higher margin clinical categories?

Journal of Health Economics

Volumn 32, Issue 6, 2013, Pages 1278-11288

  Newhouse, Joseph P ^a,b,c   McWilliams, J Michael ^b,d   Price, Mary ^e   Huang, Jie ^e   Fireman, Bruce ^e   Hsu, John ^b,f  

^a HARVARD UNIVERSITY   (United States)

^b HARVARD MEDICAL SCHOOL   (United States)

^c HARVARD SCHOOL OF PUBLIC HEALTH   (United States)

^d BRIGHAM AND WOMEN S HOSPITAL   (United States)

^e DIVISION OF RESEARCH   (United States)

^f MASSACHUSETTS GENERAL HOSPITAL   (United States)

Author keywords

Medicare; Risk adjustment; Selection

Indexed keywords

HEALTH CARE; HEALTH INSURANCE; RISK ASSESSMENT;

ADULT; AGED; ANGINA PECTORIS; ARTICLE; CHRONIC OBSTRUCTIVE LUNG DISEASE; CONGESTIVE HEART FAILURE; CONTROLLED STUDY; COST CONTROL; DIABETES MELLITUS; ENTERITIS; GENERAL PRACTITIONER; HEALTH CARE COST; HEALTH CARE DELIVERY; HEALTH CARE MANAGEMENT; HEALTH CARE SYSTEM; HEALTH MAINTENANCE ORGANIZATION; HEART ARRHYTHMIA; HEART INFARCTION; HUMAN; ISCHEMIC HEART DISEASE; MEDICAL SERVICE; MEDICARE; MEDICARE ADVANTAGE; MULTIPLE SCLEROSIS; REIMBURSEMENT; RHEUMATOID ARTHRITIS; RISK ASSESSMENT; SPINE FRACTURE; TRADITIONAL MEDICARE; UNSTABLE ANGINA PECTORIS; CONFIDENCE INTERVAL; ECONOMICS; HEALTH INSURANCE; ORGANIZATION AND MANAGEMENT; PROCEDURES; STATISTICS AND NUMERICAL DATA; UNITED STATES;

CONFIDENCE INTERVALS; HUMANS; MANAGED CARE PROGRAMS; MEDICARE PART C; RISK ADJUSTMENT; UNITED STATES;

EID: 84888873648     PISSN: 01676296     EISSN: 18791646     Source Type: Journal    
DOI: 10.1016/j.jhealeco.2013.09.003     Document Type: Article

References (24)

1. Akerlof G. The market for 'Lemons': qualitative uncertainty and the market mechanism. Quarterly Journal of Economics 1970, 74(3):488-500.
2. Boden W.E., O'Rourke R.A., Teo K.K., et al. Optimal medical therapy with or without PCI for stable coronary disease. New England Journal of Medicine 2007, 356(15):1503-1516.
3. Brown J., Duggan M., Kuziemko I., et al. How Does Risk Selection Respond to Risk Adjustment? Evidence from the Medicare Advantage Program 2011, National Bureau of Economic Research, Cambridge, MA, (Working Paper 16977).
4. Buchbinder R., Osborne R.H., Ebeling P.R., et al. A randomized trial of vertebroplasty for painful osteoporotic vertebral fractures. New England Journal of Medicine 2009, 361(6):557-568.
5. Cao Z., McGuire T.G. Service level selection by HMO's in Medicare. Journal of Health Economics 2003, 22(6):915-931.
6. Congressional Budget Office Predicting How Changes in Medicare Payment Rates Would Affect Risk-Sector Enrollment and Costs 1997, Congressional Budget Office, Washington, DC.
7. Frank R.G., Glazer J., McGuire T.G. Measuring adverse selection in managed health care. Journal of Health Economics 2000, 19(6):829-854.
8. Glazer J., McGuire T.G. Optimal risk adjustment in markets with adverse selection: an application to managed care. American Economic Review 2000, 90(4):1055-1071.
9. Glazer J., McGuire T.G. Making Medicare advantage a middle-class program. Journal of Health Economics 2013, 32(2):463-473.
10. Keeler E.B., Carter G., Newhouse J.P. A model of the impact of reimbursement schemes on health plan choice. Journal of Health Economics 1998, 17(3):297-320.
11. Ma Ching-to Albert, McGuire T.G. Network incentives in managed health care. Journal of Economics and Management Strategy 2002, 11(1):1-35.
12. McGuire T.G., Newhouse J.P., Sinaiko A.D. A history of Medicare. Part C. The Milbank Quarterly 2011, 89(2):289-332.
13. McWilliams J.M., Hsu J., Newhouse J.P. New risk-adjustment system was associated with reduced favorable selection in Medicare Advantage. Health Affairs 2012, 31(12):2630-2640.
14. McWilliams J.M., Meara E., Zaslavsky A.M., et al. Health of previously uninsured adults after acquiring Medicare coverage. JAMA 2007, 298(24):2886-2894.
15. McWilliams J.M., Meara E., Zaslavsky A.M., et al. Medicare spending for previously uninsured adults. Annals of Internal Medicine 2009, 151(11):757-766.
16. Medicare Payment Advisory Commission Report to the Congress: Medicare and the Health Care Delivery System. Washington, DC 2012.
17. Medicare Payment Advisory Commission Report to the Congress: Medicare Payment Policy 2013, Medicare Payment Advisory Commission, Washington, DC.
18. National Center for Health Statistics Health Insurance Coverage, United States - July 1962-June 1963 1964, http://www.cdc.gov/nchs/data/series/sr_10/sr10_011acc.pdf (accessed 05.04.13 Series 10).
19. Newhouse J.P. Reimbursing health plans and health providers: selection versus efficiency in production. Journal of Economic Literature 1996, 34(3):1236-1263.
20. Newhouse J.P. Pricing the Priceless: A Health Care Conundrum 2002, MIT Press, Cambridge.
21. Newhouse J.P., Huang J., Brand R.J., et al. The structure of risk adjustment for private plans in Medicare. American Journal of Managed Care 2011, 17(6):e231-e240.
22. Newhouse J.P., Price M., Huang J., et al. Steps to reduce favorable risk selection in Medicare Advantage largely succeeded, boding well for health insurance exchanges. Health Affairs 2012, 31(12):2618-2628.
23. Pope G.C., Kautter J., Ellis R.P., et al. Risk adjustment of Medicare capitation payments using the CMS-HCC model. Health Care Financing Review 2004, 25(4):119-141.
24. Rothschild M., Stiglitz J. Equilibrium in competitive insurance markets: an essay on the economics of imperfect information. Quarterly Journal of Economics 1976, 90(4):629-650.