Changes in benefit payments and health insurance premiums among firms switching health insurance carriers.

Employer-purchased group health insurance is a major source of funding in the US healthcare system, accounting for approximately one third of each healthcare dollar spent. Surprisingly, little is known about employers' behavior in purchasing health insurance or the circumstances leading employers to switch health insurance carriers. We descriptively analyzed data for a cohort of 95 insured groups between 1985 and 1991 to determine the frequency with which employers switch health insurance carriers and the growth pattern in premiums and benefit payments before the switch was made. Thirty-seven percent of groups switched carriers during the study period, with at least five groups switching each year from 1987 through 1991. The groups that switched insurance carriers experienced higher average annual rates of growth in benefit payments than those that did not switch (18% versus 11%). Groups that switched did not have significantly higher observed premium growth rates than those that did not switch, suggesting that employers decided to switch insurers before absorbing an increase in premiums. However, some firms that switched experienced below average increases in both benefit payments and premiums, indicating that premiums and anticipated premium increases are not solely responsible for the decision to switch health insurance carriers.

Controlling inpatient psychiatric utilization through managed care.

OBJECTIVE: There is little current understanding of how managed care strategies affect hospital inpatient psychiatric care for mentally ill patients. This study examined one prominent form of managed care, utilization management, which reviews requests for psychiatric care and authorizes provision of care deemed appropriate and clinically necessary. METHOD: The authors analyzed data on 2,265 utilization management reviews conducted during 1989-1992 for patients insured by a single large commercial insurance company. Three utilization management procedures were examined: preadmission review, continued-stay review, and case management. The performance indicators analyzed included percent of admission requests granted, number of days requested and approved, and number of treatment extensions granted. RESULTS: Utilization management initially approved inpatient psychiatric treatment for nearly all (98.8%) of the patients but authorized, on average, only one-third of the days requested (6.9 versus 19.0). On average, 23.5 (total) days of care were requested and 16.8 days were approved. Care for patients with alcohol or drug dependence diagnoses was more restricted than was care for other patients. CONCLUSIONS: These data suggest that managed care does restrict inpatient psychiatric care, primarily by managing length of stay. The fact that almost all patients were approved for the same initial length of stay implies adherence to strict treatment protocols that do not distinguish among different clinical or patient factors. There is a need for careful study of the effects of managed care on outcomes and quality of psychiatric care.