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Related Experiment Videos

Why not the best for the chronically ill?

S B Jones1

  • 1Health Insurance Reform Project, George Washington University, Washington, D.C., USA.

Research Agenda Brief
|January 1, 1996
PubMed
Summary
This summary is machine-generated.

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Health plans underinvest in chronically ill patients due to weak risk adjustment, hindering competitive markets. Innovative pricing and purchasing strategies are needed to improve care value for these individuals.

Area of Science:

  • Health economics
  • Managed care
  • Healthcare policy

Background:

  • Risk adjustment mechanisms are crucial for competitive health insurance markets.
  • Current premium adjustors are insufficient, particularly for managing care for high-cost, chronically ill individuals.
  • Health plans are incentivized by risk selection to underinvest in and "demarket" care to those with chronic conditions.

Purpose of the Study:

  • To identify the limitations of current risk adjustment technologies in health insurance markets.
  • To explore strategies for improving the value of care for chronically ill populations.
  • To propose new approaches for purchasing care for individuals with specific chronic conditions.

Main Methods:

  • Analysis of the impact of risk selection on health plan investment and service provision.

Related Experiment Videos

  • Evaluation of the effectiveness of current premium adjustment technologies.
  • Conceptualization of alternative purchasing and pricing models for chronic care.

    • Main Results:

    • Premium adjustors are the weakest link in ensuring competitive health insurance markets.
    • Health plans' underinvestment in chronically ill beneficiaries is driven by risk selection.
    • Existing systems fail to adequately support managed care for high-cost individuals.

    Conclusions:

    • Significant improvements in risk adjustment technology are needed for health plans to effectively manage care for the chronically ill.
    • Large employer coalitions, Medicare, and Medicaid should explore radical new approaches to purchasing chronic care.
    • Establishing condition-specific pricing and direct purchasing from provider systems are potential innovative solutions.