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Related Experiment Videos

A closer look at the managed care backlash.

Philip F Cooper1, Kosali I Simon, Jessica Vistnes

  • 1Center for Financing, Access and Cost Trends, Agency for Healthcare Research and Quality, Rockville, Maryland, USA.

Medical Care
|April 21, 2006
PubMed
Summary

The popularity of health maintenance organizations (HMOs) declined later than previously thought, with most decreases occurring after 2001. Employer surveys show a shift towards non-HMO plans, especially when choices were offered.

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Area of Science:

  • Health Services Research
  • Health Economics
  • Managed Care Policy

Background:

  • Limited empirical data exists on the managed care backlash of the late 1990s.
  • Anecdotal evidence suggests a decline in health maintenance organization (HMO) popularity.

Purpose of the Study:

  • To examine trends in enrollment rates for HMOs and other health plan types.
  • To analyze these trends using employer-sponsored health plan data from 1997 to 2003.

Main Methods:

  • Analysis of employer survey data on health plan enrollment.
  • Disaggregation of enrollment rates by plan type, choice of plans, firm size, and year.
  • Focus on employees in private sector establishments.

Main Results:

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  • HMO enrollment rates decreased from approximately 32% to 26% between 1997 and 2003.
  • The majority of the HMO decline occurred after 2001, contrary to earlier studies.
  • Large employers saw an HMO enrollment decline starting in 1998, offset by an increase in small employers, leading to stability before 2002.
  • Employees with a choice between HMOs and other plans increasingly selected non-HMO options.

Conclusions:

  • The decline in HMO popularity was more gradual than previously reported.
  • Firm size influenced HMO enrollment trends, with contrasting patterns in large versus small employers.
  • Employee choice significantly impacted the selection of non-HMO plans, indicating a preference shift.