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Related Experiment Videos

Understanding biased selection in Medicare HMOs.

Michelle M Mello1, Sally C Stearns, Edward C Norton

  • 1Department of Health Policy and Management, Harvard School of Public Health, Boston, MA 02115, USA.

Health Services Research
|June 26, 2003
PubMed
Summary

Favorable health maintenance organization (HMO) selection among Medicare beneficiaries persists over time, regardless of market penetration. Methodological choices significantly influence findings on HMO selection. This supports adjusting Medicare payment formulas.

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Area of Science:

  • Health economics
  • Health services research
  • Medicare policy

Background:

  • Health Maintenance Organizations (HMOs) are a significant option for Medicare beneficiaries.
  • Previous research on favorable selection in Medicare HMOs has yielded conflicting results.
  • Understanding selection bias is crucial for equitable healthcare payments.

Purpose of the Study:

  • To assess the persistence of favorable selection in a Medicare beneficiary cohort.
  • To determine if HMO market penetration influences favorable selection.
  • To reconcile discrepancies in existing literature regarding favorable HMO selection.

Main Methods:

  • Utilized longitudinal Medicare Current Beneficiary Survey (MCBS) data from 1992-1996.
  • Linked MCBS data with Area Resource File and Medicare administrative datasets.

Related Experiment Videos

  • Employed random effects probit modeling to analyze HMO enrollment based on health status and market penetration.

    • Main Results:

    • Favorable selection was observed over time, though not consistently across all health measures.
    • No significant association was found between the degree of favorable selection and HMO market penetration.
    • Methodological variations, such as health status measures and sample composition, explain conflicting study findings.

    Conclusions:

    • The study's findings underscore the need for continued risk adjustment in Medicare payment formulas.
    • Results suggest that current payment mechanisms may not fully account for selection effects.
    • Further refinement of the Adjusted Average Per Capita Cost (AAPCC) formula is recommended.