Risk adjusting capitation: applications in employed and disabled populations.

Risk adjustment may be a sensible strategy to reduce selection bias because it links managed care payment directly to the costs of providing services. In this paper we compare risk adjustment models in two populations (public employees and their dependents, and publicly-insured low income individuals with disabilities) in Washington State using two statistical approaches and three health status measures. We conclude that a two-part logistic/GLM statistical model performs better in populations with large numbers of individuals who do not use health services. This model was successfully implemented in the employed population, but the managed care program for the publicly insured population was terminated before risk adjustment could be applied. The choice of the most appropriate health status measure depends on purchasers' principles and desired outcomes.

Modeling risk using generalized linear models.

Traditionally, linear regression has been the technique of choice for predicting medical risk. This paper presents a new approach to modeling the second part of two-part models utilizing extensions of the generalized linear model. The primary method of estimation for this model is maximum likelihood. This method as well as the generalizations quasi-likelihood and extended quasi-likelihood are discussed. An example using medical expense data from Washington State employees is used to illustrate the methods. The model includes demographic variables as well as an Ambulatory. Care Group variable to account for prior health status.

Excess capacity: markets regulation, and values.

OBJECTIVE: To examine the conceptual bases for the conflicting views of excess capacity in healthcare markets and their application in the context of today's turbulent environment. STUDY SETTING: The policy and research literature of the past three decades. STUDY DESIGN: The theoretical perspectives of alternative economic schools of thought are used to support different policy positions with regard to excess capacity. Changes in these policy positions over time are linked to changes in the economic and political environment of the period. The social values implied by this history are articulated. DATA COLLECTION: Standard library search procedures are used to identify relevant literature. PRINCIPAL FINDINGS: Alternative policy views of excess capacity in healthcare markets rely on differing theoretical foundations. Changes in the context in which policy decisions are made over time affect the dominant theoretical framework and, therefore, the dominant policy view of excess capacity. CONCLUSIONS: In the 1990s, multiple perspectives of optimal capacity still exist. However, our evolving history suggests a set of persistent values that should guide future policy in this area.

State-sponsored programs for the uninsured: is there adverse selection?

Risk contracting by states for coverage of previously uninsured populations has been hampered by uncertainty regarding likely claims experience. This study reports on the utilization experience of two state programs offering subsidized coverage in commercial managed care organizations to low-income and previously uninsured people. Program participants used services similarly to people enrolled through large employer benefit plans. There was no evidence of pent-up demand or an unusual level of chronic illness. Similarly, there was little evidence of underutilization, although dissatisfaction and reported barriers to service were more frequent among nonwhite enrollees.

Health care utilization for the "newly insured": results from the Washington Basic Health Plan.

The risk of providing coverage for low-income people formerly without insurance is unknown. We conducted an evaluation to describe the use of services from 1989-1992 for members of the Basic Health Plan (BHP), a subsidized health insurance program for low-income individuals in the state of Washington. There was evidence of pent-up demand for care for those who had been without insurance for more than a year. Overall, members in the BHP program were not high users of care, although one of the three plans we examined had significantly higher utilization than the other two. BHP total expenditures were comparable to those for state employees and lower than those for Medicaid recipients.

Establishment of total and intraservice work by chiropractic physicians in providing spinal manipulative therapy and evaluation and management services.

OBJECTIVE: To develop and test a self-report survey instrument that measures the work performed by chiropractors in the delivery of evaluation and management (E/M) services and spinal manipulative therapy (SMT). Work is one leg of a triad used to develop Resource-Based Relative Values Scales (RBRVS) for physician reimbursement. DESIGN: Reliability study modeled after a tool designed and tested by economists at Harvard University School of Public Health in the development of relative values scales for physician reimbursement. The survey instrument uses magnitude estimation as a means of obtaining reliable and valid measures of the subjective assessments of the dimensions of a physicians work. SAMPLE: A random national sample was drawn from all members of the American Chiropractic Association. RESULTS: Estimates of the work performed by chiropractors in providing E/M and SMT services were established. The reliability of work ratings indicated that chiropractors agree closely on their ratings for work. The validity of the results indicated a high degree of consistency in rating work, which implies that the results are realistic. A review of demographics suggested that the survey population was representative of the general population of chiropractors. CONCLUSIONS: This study generated valid and reliable estimates of the work performed by chiropractors in providing E/M and SMT services. Work is one of three components used in the development of RBRVS, the method of physician reimbursement that is currently the industry standard. By quantifying the work required in providing services, chiropractors can now develop RBRVS. Additionally, the evidence-based data on work collected here can be used for a comparison with the work of similar services provided by other specialists. This can facilitate the use or modification of service description codes for use by chiropractic physicians.

Will uninsured people volunteer for voluntary health insurance? Experience from Washington State.

OBJECTIVES: In national and local discussions of health care reform, there is disagreement about whether a national health insurance plan should be mandatory or voluntary. This study describes characteristics of low- income people who were more likely or less likely to be covered by a voluntary plan. METHODS: Survey data were available from an evaluation of Washington State's Basic Health Plan, which offered subsidized health insurance to low-income residents. For those subjects who were eligible and uninsured at baseline, those who joined were compared with those who did not join on a variety of demographic and health-related characteristics. RESULTS: There were substantial differences between those who did and did not join the Basic Health Plan. Those who did not enroll were generally less well-off, with less education, lower income, and worse health. Many had never had health insurance. CONCLUSIONS: If health care reform results in a voluntary plan, additional measures may be needed to ensure that less advantaged citizens have adequate access to health care.

Context and catalysts for change in health care markets.

Understanding the nature of change in health care markets involves recognizing that not all communities are alike, and hence not all health care markets look or act the same. In a study of fifteen communities sponsored by The Robert Wood Johnson Foundation, the characteristics and culture of each community interacted with market conditions to influence the magnitude, direction, and sustainability of health system change. A catalyst attuned to a market's context can ignite change, giving the market focus and direction. Recognizing the importance of context to the process of change enhances our ability to understand the consequences of proposed market activities.

Voluntary public health insurance for low-income families: the decision to enroll.

A dominant issue in the health reform debate is whether insurance coverage should be voluntary or mandatory. Clearly, the factors that determine who will seek voluntary coverage are relevant to this policy issue. This article uses experience from Washington State's Basic Health Plan to examine the enrollment choices of low-income families in a state-subsidized voluntary insurance plan offered through managed care organizations. We hypothesize that the decision to enroll, which encompasses the decisions to purchase insurance coverage and to select a particular plan, is influenced by four factors: the family's financial vulnerability, their risk perception, the price of coverage, and the transition costs of enrolling. Our enrollment model is supported by the data and has important implications for the design of voluntary programs. Families who choose to enroll are more likely to have a female head of household, young children, and a family member who has a part-time job and some college education. Higher premiums and availability of other insurance coverage decrease the probability of enrolling.

Who enrolled in a state program for the uninsured: was there adverse selection?

Managed care plans may hesitate to participate in programs for uninsured persons because they fear adverse selection, whereby only the sickest people or highest users would choose to join the program. We studied this issue in Washington State's Basic Health Plan, a demonstration program that provides subsidized health insurance for families earning less than 200% of the poverty level. We interviewed people in three counties who enrolled in the program, and compared them to people in the same counties who were eligible but did not enroll. There were substantial differences between enrollees and eligibles in education, age, income, employment, race, and insurance status. In spite of these demographic and access differences, health status was remarkably similar for enrollees and eligibles, with the few significant differences favoring the enrollees. In addition, previous and subsequent use of health services was similar or lower for enrollees. The results for health status and utilization were similar across the three counties, even though the counties and the providers were quite different. We conclude that there is no evidence of adverse selection. This is welcome news for the health plans, but suggests that the BHP may not have reached those most in need of insurance.

Washington State's Basic Health Plan: choices and challenges.

The current turbulence characterizing the health sector has engendered a limited number of state-level experiments to provide health services for the nation's 37 million uninsured. The issues and challenges generated by each program's design and implementation vary. By examining the experience of one such state program, the Washington Basic Health Plan, in some detail, this paper contributes to the policy debate regarding the possible range of solutions available to address the issue of "the uninsured." By analyzing the array of design choices available at the time the program was enacted, and why certain options were chosen rather than others, this paper points to the complex interaction of political dynamics, public policy development, and program implementation.

Estimating county percentages of people without health insurance.

County data on the percentage of people without health insurance are seldom available, although state program planning requires such information. As part of an evaluation of Washington's Basic Health Plan (BHP), we conducted a telephone survey in nine Washington counties to estimate the percentage of people under the age of 65 who were uninsured. We used regression analysis to estimate the percentage uninsured in a county as a function of the percentage unemployed. Two validation approaches yielded very good results, suggesting that the equation could be used to estimate the percentage uninsured in unsurveyed counties. The variation ranged from 15% to 23% uninsured in the 9 surveyed counties, and was estimated to range from 9% to 35% among the state's 39 counties. With proper caution, estimates based on this equation can probably be used in other states if better data are unavailable.

Financial and fiscal issues of health care for the elderly.

Financing care for the elderly is an increasingly sensitive and difficult issue. Changing demographics, technology, and general economic conditions argue for a reassessment of current policies. This paper outlines the social conflict that is arising over the distribution of public resources in this area and outlines several strategies for change.