The effect of cancer diagnosis on switching health insurance in medicare

Because health insurance is intended to protect patients in the event of a health shock, it is important to evaluate health insurance policy in the context of patients who experience health shocks. I measure the effect of cancer diagnosis on health insurance switching in order to compare cancer patient's preferences among private and publicly administered Medicare. I estimate that a cancer diagnosis increases the probability a patient will leave a private Medicare plan, for the public plan, by 0.8% points (41%). Similarly, a cancer diagnosis decreases the probability a patient will leave the public Medicare plan, for a private plan, by 0.5% points (16%). The implication is that private Medicare plans are relatively less attractive to cancer patients than they are to noncancer patients.     

Patient selection in the ESRD managed care demonstration

The Centers for Medicare & Medicaid Service's (CMS') end stage renal disease (ESRD) managed care demonstration offered an opportunity to assess patient selection among a chronically ill and inherently costly population. Patient selection refers to the phenomenon whereby those Medicare beneficiaries who choose to enroll or stay in health maintenance organizations (HMOs) are, on average, younger, healthier, and less costly to treat than beneficiaries who remain in the traditional Medicare fee-for-service (FFS) sector. The results presented in this article show that enrollees into the demonstration were generally younger and healthier than a representative group of comparison patients from the same geographic areas.     

Consumer information and biased selection in the demand for coverage supplementing Medicare.

This study examines how the relationship between health insurance knowledge and the health status of health insurance consumers influences their decisions to purchase insurance coverage. Data from the federal Medicare health insurance program for the elderly in the United States are used. The basic Medicare program provides a limited amount of coverage for health care services obtained from any provider in the private fee-for-service (FFS) market. Beneficiaries of this program may choose to supplement the basic coverage which they receive by two mechanisms: either they may purchase private insurance designed to fill some of the gaps left by the federal program ('Medigap' policies), thereby remaining in the FFS market and preserving their choice of provider, or they may enroll in health maintenance organizations (HMOs), thereby leaving the FFS market and agreeing to use only those providers affiliated with the HMO, and in return receiving broader coverage at little additional out-of-pocket cost. The study was made possible by a unique data set which combines measures of beneficiary knowledge of Medicare coverage with measures of perceived health status, socio-economic characteristics, and insurance coverage choices for a sample of Medicare beneficiaries who participated in an educational workshop about their insurance coverage options. These data were used to estimate a multinomial logistic model of the determinants of insurance choices, where the options included the two listed above and a basic Medicare option. The study explicitly recognizes the interaction between insurance information and health status in health plan choice. These results show that knowledge of coverage does have a differential impact on the decision to purchase health insurance depending on health status. With a high level of knowledge, sicker beneficiaries are less likely to have basic Medicare alone, compared with HMOs or Medigap policies, while healthier beneficiaries are less likely to be enrolled in HMOs, compared with Medigap policies. This finding has important implications for the use of health status measures to adjust capitated payment formulas when knowledgable consumers have the option to enroll in HMOs or remain in the FFS environment. In the absence of health status adjusters for the HMO capitation payments, high levels of coverage knowledge may exacerbate inherent selection bias among these coverage options by healthier and sicker consumers of health insurance.     

Web Chatter Before and After the Women's Health Initiative Results: A Content Analysis of On-line Menopause Message Boards

People aging into Medicare need to choose a health plan. Several challenges exist for consumers in choosing a Medicare health plan, including limited knowledge of Medicare, limited experience in using comparative health plan quality information, and limited experience and ability to pull together and use plan information from different sources like employers and the Medicare program. The Choose with Care System was developed to help consumers aging into Medicare make informed Medicare health plan choices. Choose with Care is an innovative decision support tool for employers to use to assist people approaching age 65 to learn about their Medicare health plan options and how to incorporate information on the quality of care and services offered by health plans into their choices. Employers are the targeted channel for distributing the Choose with Care materials because they are one of the most recognized and accessible formal intermediaries for information about health insurance. We used multiple methods to test the Choose with Care products. Product testing showed that the Choose with Care materials increase older consumers' knowledge of Medicare and how it relates to retiree health insurance and improves their comprehension and use of comparative quality information when choosing a health plan.     

The "choose with care system" - development of education materials to support informed Medicare health plan choices

People aging into Medicare need to choose a health plan. Several challenges exist for consumers in choosing a Medicare health plan, including limited knowledge of Medicare, limited experience in using comparative health plan quality information, and limited experience and ability to pull together and use plan information from different sources like employers and the Medicare program. The Choose with Care System was developed to help consumers aging into Medicare make informed Medicare health plan choices. Choose with Care is an innovative decision support tool for employers to use to assist people approaching age 65 to learn about their Medicare health plan options and how to incorporate information on the quality of care and services offered by health plans into their choices. Employers are the targeted channel for distributing the Choose with Care materials because they are one of the most recognized and accessible formal intermediaries for information about health insurance. We used multiple methods to test the Choose with Care products. Product testing showed that the Choose with Care materials increase older consumers' knowledge of Medicare and how it relates to retiree health insurance and improves their comprehension and use of comparative quality information when choosing a health plan.     

A comparison of inpatient severity, average length of stay, and cost for traditional fee-for-service medicare and medicare HMOs in Florida

This research compares the mean severity level, length of stay, and cost of Medicare health maintenance organization (HMO) and Medicare fee-for-service (FFS) inpatients. The results suggest Medicare HMOs have healthier inpatients and shorter lengths of stay, but more costly per-day utilization. These findings are contrary to the assumption that HMOs reduce daily utilization.     

Health outcomes. New quality measure for Medicare.

OBJECTIVE: A new measurement of health care quality for Medicare beneficiaries has been implemented by the Health Care Financing Administration (HCFA). This paper describes the program, presents baseline data and highlights associated issues. DESIGN: The Health Outcomes Survey (HOS) is a longitudinal cohort mail survey. Changes in population health status after 2 years will be evaluated on an individual plan level. SETTING: Two-hundred and eighty-seven US Medicare managed care plans. MAIN OUTCOMES MEASURES: Physical component and mental component summary scales derived from the SF-36. FINDINGS: Baseline data documented lower health status in older populations, while functional limitations and disease prevalence were higher. Among different plans, mean functional levels were found to be similar, although a few plans contained populations with exceptionally low levels. These data do not support the assertion that enrolees in for-profit plans are healthier than non-profit plans. CONCLUSIONS/IMPLICATIONS: The HOS is the first large-scale program to evaluate health outcomes among older Americans. HCFA recognizes several technical and policy issues. Technical issues include possible biased reporting for subpopulations, the validity of proxy responses and respondent burden. Policy issues concern the appropriateness of using a generic measure such as the SF-36 and how much change in health status can be attributed to quality of health care. HCFA plans to extend the HOS to beneficiaries in traditional Medicare. The HOS project is expected to encourage more efforts to maintain or improve the health status of the Medicare managed care population.     

The effects of Medicare Health Management Organizations on hospital operating profit in Florida.

Between 1992 and 1997, the number of members enrolled in Medicare Health Management Organizations (HMOs) nationwide in the USA more than doubled. During this period, managed care organizations wielded considerable influence over the health care of a large segment of the Medicare population in Florida. This study examined the impact on operational profit of 148 short-term, acute-care Florida hospitals in this period from Medicare HMO patients, as part of a hospital's payer mix. Three measures of hospital profitability were used: operating profit per actual bed, total operating profit with no adjustment for bed size, and operating margins. The multivariate statistical model employed in this study was a linear mixed model with an autoregressive order one (AR[1]) parametric structure on the covariance matrix. The results of the study indicate that Florida hospitals experienced greater profit pressures from Medicare HMO inpatients than from traditional Medicare inpatients. Further, these hospitals could have experienced positive profit effects with greater traditional Medicare participation and negative financial effects with greater Medicare HMO participation. Additionally, Medicare HMO patients appear to have been admitted to hospitals in worse health condition than those in traditional Medicare. Medicare HMO patients were more likely to have used emergency rooms as the source of admission than traditional Medicare patients. Also, Medicare HMO patients were more likely to have been admitted as emergent cases than traditional Medicare patients. Other research has shown that Medicare HMO patients, at the time of enrolment, are probably healthier than traditional Medicare enrollees, but here they appear to have been admitted to hospitals with higher levels of severity of illness. Explanations are offered for these findings.     

Consequences of health trends and medical innovation for the future elderly

Recent innovations in biomedicine seem poised to revolutionize medical practice. At the same time, disease and disability are increasing among younger populations. This paper considers how these confluent trends will affect the elderly's health status and health care spending over the next thirty years. Because healthier people live longer, cumulative Medicare spending varies little with a beneficiary's disease and disability status upon entering Medicare. On the other hand, ten of the most promising medical technologies are forecast to increase spending greatly. It is unlikely that a "silver bullet" will emerge to both improve health and dramatically reduce medical spending.     

Using hierarchical models to attribute sources of variation in consumer assessments of health care

The Consumer Assessments of Healthcare Providers and Systems (CAHPS) Medicare Advantage (MA-CAHPS) survey has provided extensive and uniform data for 8 years on the quality of Medicare health plans in the United States. The complex structure of the data makes hierarchical modelling an appropriate analytic tool. After describing the CAHPS survey and the analytic methods used in standard reports, we review research using two multilevel modelling strategies, each addressing a different aspect of the structure of the CAHPS data. The first fits a 2-level Fay-Herriott-type model to data aggregated by plan to estimate plan-level correlations among summary scores on different items. By forming separate measures for healthier and sicker members of each plan, we were able to determine which items measured distinct dimensions of quality depending on health status. The second analysis evaluated the relative contributions of geography and organizational units to the various quality measures, and the amount of variation over time in each. Geographical variation predominated for aspects of member experiences that are not typically under the direct control of plans, and the geographical effects were very stable over time. Each of the two analyses can be regarded as a simplification for particular objectives of a larger underlying model. Further methodological development is needed to better characterize variation in quality.     

Health plan decision making with new medicare information materials

OBJECTIVE: To examine the effect of providing new Medicare information materials on consumers' attitudes and behavior about health plan choice. DATA SOURCE: New and experienced Medicare beneficiaries who resided in the Kansas City metropolitan statistical area during winter 1998-99 were surveyed. More than 2,000 computer-assisted telephone interviews were completed across the two beneficiary populations with a mean response rate of 60 percent. STUDY DESIGN: Medicare beneficiaries were randomly assigned to a control group or one of three treatment groups that received varying amounts and types of new Medicare information materials. One treatment group received the Health Care Financing Administrations's pilot Medicare & You 1999 handbook, a second group received the same version of the handbook and a Medicare version of the Consumer Assessment of Health Plans (CAHPS) report, and a third treatment group received the Medicare & You bulletin, an abbreviated version of the handbook. PRINCIPAL FINDINGS: Results of the study suggest that the federal government's new consumer information materials are having some influence on Medicare beneficiaries' attitudes and behaviors about health plan decision making. Experienced beneficiary treatment group members were significantly more confident with their current health plan choice than control group members, but new beneficiaries were significantly less likely to use the new materials to choose or change health plans than control group members. In general the effects on confidence and health plan switching did not vary across the different treatment materials. CONCLUSIONS: The 1999 version of the Medicare & You materials contained a message that it is not necessary to change health plans. This message appears to have decreased the likelihood of using the new materials to choose or change plans, whereas other materials to which beneficiaries are exposed may encourage plan switching. Because providing more information to beneficiaries did not result in commensurate increases in confidence levels or rate of health plan switching, factors other than the amount of information, such as how the information is presented, may be more critical than volume.     

Recessions and seniors' health, health behaviors, and healthcare use: Analysis of the Medicare Current Beneficiary Survey

A number of studies report that U.S. state mortality rates, particularly for the elderly, decline during economic downturns. Further, several prior studies use microdata to show that as state unemployment rates rise, physical health improves, unhealthy behaviors decrease, and medical care use declines. We use data on elderly mortality rates and data from the Medicare Current Beneficiary Survey from a time period that encompasses the start of the Great Recession. We find that elderly mortality is countercyclical during most of the 1994-2008 period. Further, as unemployment rates rise, seniors report worse mental health and are no more likely to engage in healthier behaviors. We find suggestive evidence that inpatient utilization increases perhaps because of an increased physician willingness to accept Medicare patients. Our findings suggest that either elderly individuals respond differently to recessions than do working age adults, or that the relationship between unemployment and health has changed.     

Will Choice‐Based Reform Work for Medicare? Evidence from the Federal Employees Health Benefits Program

OBJECTIVE:. To examine the effect of premiums and benefits on the health plan choices of older enrollees who choose Federal Employees Health Benefits Program (FEHBP) health plans as their primary payer. DATA SOURCES: Administrative enrollment data from the Office of Personnel Management (OPM) and plan premiums and benefits data taken from the Checkbook Guide to health plans. STUDY DESIGN: We estimate individual plan choice models where the choice of health plan is a function of out-of-pocket premium, actuarial value, plan attributes, and individual characteristics. Plan attributes include plan structure (fee-for-service/preferred provider organization, point-of-service, or health maintenance organization), drug benefit structure, and whether or not the plan covers other types of spending such as dental services and diabetic supplies. The models are estimated by conditional logit. Our study focuses on three populations that currently choose FEHBP as their primary health care coverage and are similar to the Medicare population: current employees and retirees who are approaching the age of Medicare eligibility (ages 60-64) and current federal employees age 65+. Current employees age 65+ are eligible for Medicare, but their FEHBP plan is their primary payer. Retirees and employees 60-64 are not yet eligible for Medicare but are similar in many respects to recently age-eligible Medicare beneficiaries. We also estimate our model for current employees age 55 and younger as a comparison group. DATA COLLECTION METHODS: We select a random sample of retirees and employees age 60-64, as well as all current employees age 65+, from the OPM administrative database for the calendar year 2001. The plan choices available to each person are determined by the plans participating in their metropolitan statistical area. We match plan premium and attribute information from the Checkbook Guide to each plan in the enrollee's list of choices. PRINCIPAL FINDINGS: We find that current workers 65+, 60-64, and non-Medicare eligible retirees are sensitive to variation in plan premiums. The premium elasticities for these groups are similar in magnitude to those of the age 55 and under employee group. Older workers and retirees not yet eligible for Medicare are willing to pay a substantial amount for plans with open provider networks. The willingness to pay for open networks is significantly greater for these groups than for younger employees. Willingness to pay for open network plans varies significantly by income, but varies little by age within group. CONCLUSIONS: Our finding that older workers and non-Medicare eligible retirees are sensitive to plan premiums suggests that choice-based reform of Medicare would lead to cost-conscious choices by Medicare beneficiaries. However, our finding that these groups are willing to pay more for open network plans than younger employees suggest that higher risk individuals may migrate toward higher benefit, higher cost plans. Our findings on the relationship between income and willingness to pay for open network plans suggest that means testing is a viable reform for lowering Medicare program costs.     

CHF disease management programs produce dramatic shift away from hospitalization

Nurse house calls and more aggressive drug therapy for congestive heart failure are keeping health plan costs down and creating healthier patients as well. Two health plans say these two factors must be added to any CHF disease management program to reach optimal effectiveness.     

Beneficiary decisionmaking: the impact of labeling health plan choices

One critical health plan decision concerns choosing an original Medicare plan or a Medicare managed care plan. Evidence suggests that people are confused by the phrase "Original Medicare plan." Using focus group and Q-sort methodology, the authors sought to identify a name for the Medicare fee-for-service (FFS) product. Two key insights were gained. First, participants used the word "Medicare" to name the FFS product. Second, participants did not choose between two plans. Rather, they decided between supplemental insurance and a managed care product. These factors should influence how CMS "brands" not only the FFS product but also the overall Medicare program.     

Promoting Healthy Menu Choices in Fast Food Restaurant Advertising: Influence of Perceived Brand Healthiness,Brand Commitment,and Health Consciousness

Fast food restaurants have increasingly turned to healthier choices to counter criticisms of nutritionally poor menu offerings and to differentiate themselves from the competition. However, research has yet to specifically investigate how consumers respond to advertisements for these healthier foods. To address this knowledge gap, two experiments were conducted to examine how perceived brand healthiness, brand commitment, and health consciousness influence responses to nutrient-content claimed print advertisements for healthy foods. Findings indicate that consumer responsiveness varies across the three factors but is more positive for advertisements placed by perceivably healthy restaurant brands, and that brand commitment and health consciousness play significant roles in affecting how consumer respond to such advertising. Several theoretical and managerial implications of the findings are discussed.     

The Effect of Health Plan Characteristics on Medicare+Choice Enrollment

Objective. To provide national estimates of the effect of out-of-pocket premiums and benefits on Medicare beneficiaries' choice among managed care health plans.
Data Sources/Study Setting. The data represent the population of all Medicare+Choice (M+C) plans offered to Medicare beneficiaries in the United States in 1999.
Study Design. The dependent variable is the log of the ratio of the market share of the j th health plan to the lowest cost plan in the beneficiary's county of residence. The explanatory variables are measures of premiums and benefits in the j th health plan relative to the premiums and benefits in the lowest cost plan.
Data Collection Methods. The data are from the 1999 Medicare Compare database, and M+C enrollment data from the Centers for Medicare and Medicaid Services (CMS).
Principal Findings. A $10 increase in an M+C plan's out-of-pocket premium, relative to its competitors, is associated with a decrease of four percentage points in the j th plan's market share (i.e., from 25 to 21 percent), holding the premiums of competing plans constant.
Conclusions. Although our price elasticity estimates are low, the market share losses associated with small changes in a health plan's premium, relative to its competitors, may be sufficient to discipline premiums in a competitive market. Bidding behavior by plans in the Medicare Competitive Pricing Demonstration supports this conclusion.     

Disenrollment information and Medicare plan choice: is more information better?

To help Medicare beneficiaries and their intermediaries select the best health plan, CMS publicly reports comparative plan information. Using a laboratory version of Medicare Health Plan Compare that involved a simulated plan choice by 359 Medicare intermediaries, we experimentally investigated plan recommendations with and without disenrollment information and time constraints for viewing materials. Results indicated that the presence of disenrollment information reduced time spent on other measures of plan performance. It also reduced decision quality for less educated intermediaries. Designers and sponsors of consumer-oriented materials should recognize that more information is not always better.     

Trends in the health status of medicare risk contract enrollees

Previous research has found Medicare risk contract enrollees to be healthier than beneficiaries in fee-for-service (FFS). Medicare Current Beneficiary Survey (MCBS) data were used to examine trends in health and functional status measures among risk contract and FFS enrollees from 1991 to 2004. Risk contract enrollees reported better health and functioning, but the differences tended to narrow over time. Most of the differences in trends were observed for functional status measures and institutionalization; differences in trends for perceived health status and prevalence rates of chronic conditions tended to be small or non-existent. The narrowing of functional and health status differences between the risk contract and FFS populations may have implications for payment policy, as well as implications for the role of private health plans in Medicare.     

The influence of patient characteristics on ratings of managed behavioral health care

Despite current emphasis on consumer-based performance measures, little is known about factors that influence consumer ratings of behavioral health care. This study examines the influence of patient characteristics, health care use, and insurance coverage on patients' ratings of their managed behavioral health care in both commercial and public plans. Older and healthier patients rated their behavioral health care and health plan more highly than did other patients. Patients with less education and those whose insurance paid all costs of care gave consistently higher plan ratings. Women and frequent users enrolled in commercial plans gave more positive care ratings. After adjusting for enrollee characteristics and coverage, there were no differences between ratings of patients in commercial and public plans. These results are consistent with other research that illustrates the importance of adjusting health care ratings for patient characteristics when comparing plans.The views expressed in this article are those of the author and do not necessarily represent the views of the Department of Veterans Affairs.