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Biased selection under an experimental enrollment and marketing Medicare HMO broker
1Bigel Institute for Health Policy, Heller School, Brandeis University, Waltham, MA 02254.
Abstract:
All studies conducted to date suggest that nearly all Medicare HMOs have experienced favorable risk selection in their Medicare HMO enrollments. While there is little definitive empiric knowledge about the extent to which Medicare HMOs can and do encourage favorable selection through marketing and enrollment activities, it has been speculated that centralizing all such functions through an independent broker could reduce enrollment selection bias. In 1985, the Health Care Financing Administration initiated a three-year demonstration of a HMO broker model in Portland, Oregon, known as Health Choice, Incorporated (HCI). This study reports empiric findings that provide no evidence to support claims of the efficacy of an enrollment brokerage function in reducing Medicare HMO enrollment selection bias.
Insights
This study found no evidence that using an enrollment broker reduces selection bias in Medicare Health Maintenance Organization (HMO) enrollments. The Health Choice, Incorporated demonstration did not support claims of brokerage efficacy.
Area of Science:
- Health Services Research
- Health Economics
- Public Health Policy
Background:
- Medicare Health Maintenance Organizations (HMOs) commonly exhibit favorable risk selection.
- Marketing and enrollment strategies may influence this selection bias.
- Independent brokers have been proposed as a method to mitigate bias.
Purpose of the Study:
- To evaluate the effectiveness of an enrollment broker model in reducing selection bias among Medicare HMO enrollees.
- To provide empirical evidence on the efficacy of the Health Choice, Incorporated (HCI) demonstration project.
Main Methods:
- Analysis of a three-year demonstration project in Portland, Oregon, involving an independent HMO broker model (HCI).
- Empirical examination of enrollment data and selection bias within the Medicare HMO program.
Main Results:
- The study found no empirical evidence supporting the hypothesis that an enrollment brokerage function reduces Medicare HMO enrollment selection bias.
- Findings indicate that the HCI demonstration did not achieve its intended outcome of mitigating selection bias.
Conclusions:
- The enrollment broker model, as implemented in the HCI demonstration, was not effective in reducing selection bias in Medicare HMO enrollments.
- Further research may be needed to explore alternative strategies for addressing risk selection in Medicare programs.