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Does competition by health maintenance organizations affect the adoption of cost-containment measures by fee-for-service plans?
Am J Manag Care. 1998 Jun; 4(6):832-8.AJ

Abstract

How groups insured by fee-for-service health plans react to increased competition from health maintenance organizations (HMOs) is an unresolved question. We investigated whether groups insured by indemnity plans respond to HMO market competition by changing selected health insurance features, such as deductible amounts, stop loss levels, and coinsurance rates, or by adopting utilization management or preferred provider organization (PPO) benefit options. We collected benefit design data for the years 1985 through 1992 from 95 insured groups in 62 US metropolitan statistical areas. Multivariate hazard analysis showed that groups located in markets with higher rates of change in HMO enrollment were less likely to increase deductibles or stop loss levels. Groups located in markets with higher HMO enrollment were more likely to adopt utilization management or PPO benefit options. A group located in a market with an HMO penetration rate of 20% was 65% more likely to have included a PPO option as part of its insurance benefit plan than a group located in a market with an HMO penetration rate of 15% (p < 0.05). Concern about possible adverse selection effects may deter some fee-for-service groups from changing their health insurance coverage. Under some conditions, however, groups insured under fee-for-service plans do respond to managed care competition by changing their insurance benefits to achieve greater cost containment.

Authors+Show Affiliations

University of Washington, Seattle 98195, USA.No affiliation info availableNo affiliation info available

Pub Type(s)

Journal Article
Research Support, Non-U.S. Gov't

Language

eng

PubMed ID

10181069

Citation

Joesch, J M., et al. "Does Competition By Health Maintenance Organizations Affect the Adoption of Cost-containment Measures By Fee-for-service Plans?" The American Journal of Managed Care, vol. 4, no. 6, 1998, pp. 832-8.
Joesch JM, Wickizer TM, Feldstein PJ. Does competition by health maintenance organizations affect the adoption of cost-containment measures by fee-for-service plans? Am J Manag Care. 1998;4(6):832-8.
Joesch, J. M., Wickizer, T. M., & Feldstein, P. J. (1998). Does competition by health maintenance organizations affect the adoption of cost-containment measures by fee-for-service plans? The American Journal of Managed Care, 4(6), 832-8.
Joesch JM, Wickizer TM, Feldstein PJ. Does Competition By Health Maintenance Organizations Affect the Adoption of Cost-containment Measures By Fee-for-service Plans. Am J Manag Care. 1998;4(6):832-8. PubMed PMID: 10181069.
* Article titles in AMA citation format should be in sentence-case
TY - JOUR T1 - Does competition by health maintenance organizations affect the adoption of cost-containment measures by fee-for-service plans? AU - Joesch,J M, AU - Wickizer,T M, AU - Feldstein,P J, PY - 1998/5/7/pubmed PY - 1998/5/7/medline PY - 1998/5/7/entrez SP - 832 EP - 8 JF - The American journal of managed care JO - Am J Manag Care VL - 4 IS - 6 N2 - How groups insured by fee-for-service health plans react to increased competition from health maintenance organizations (HMOs) is an unresolved question. We investigated whether groups insured by indemnity plans respond to HMO market competition by changing selected health insurance features, such as deductible amounts, stop loss levels, and coinsurance rates, or by adopting utilization management or preferred provider organization (PPO) benefit options. We collected benefit design data for the years 1985 through 1992 from 95 insured groups in 62 US metropolitan statistical areas. Multivariate hazard analysis showed that groups located in markets with higher rates of change in HMO enrollment were less likely to increase deductibles or stop loss levels. Groups located in markets with higher HMO enrollment were more likely to adopt utilization management or PPO benefit options. A group located in a market with an HMO penetration rate of 20% was 65% more likely to have included a PPO option as part of its insurance benefit plan than a group located in a market with an HMO penetration rate of 15% (p < 0.05). Concern about possible adverse selection effects may deter some fee-for-service groups from changing their health insurance coverage. Under some conditions, however, groups insured under fee-for-service plans do respond to managed care competition by changing their insurance benefits to achieve greater cost containment. SN - 1088-0224 UR - https://www.unboundmedicine.com/medline/citation/10181069/Does_competition_by_health_maintenance_organizations_affect_the_adoption_of_cost_containment_measures_by_fee_for_service_plans L2 - https://www.ajmc.com/pubMed.php?pii=1693 DB - PRIME DP - Unbound Medicine ER -