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Why not the best for the chronically ill?

S B Jones1

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

The Hospice Journal
|June 30, 1998
PubMed
Summary
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Health plans underinvest in chronically ill patients due to flawed risk adjustment. New strategies are needed to ensure fair premiums and improve care value for these individuals.

Area of Science:

  • Health economics
  • Managed care
  • Healthcare policy

Background:

  • Risk adjustment mechanisms in health plans are currently inadequate.
  • This inadequacy leads to "demarketing" of care for high-cost, chronically ill individuals.
  • Current systems fail to provide fair premiums, disincentivizing investment in necessary care.

Purpose of the Study:

  • To highlight the deficiencies in current premium adjustment technologies.
  • To propose alternative strategies for managing care for the chronically ill.
  • To advocate for improved value in healthcare for individuals with chronic conditions.

Main Methods:

  • Analysis of existing health plan market structures and risk adjustment technologies.
  • Review of the impact of risk selection on care provision for chronically ill populations.

Related Experiment Videos

  • Exploration of potential new purchasing and pricing models for chronic care.

    • Main Results:

    • Premium adjustors are the weakest link in ensuring competitive health insurance markets.
    • Health plans are incentivized to avoid, rather than manage, high-cost patients.
    • Significant improvements in care for the chronically ill are hindered by current systems.

    Conclusions:

    • Radical new approaches are necessary to achieve best value for the chronically ill.
    • Consideration should be given to condition-specific pricing for care.
    • Purchasing care directly from provider systems, alongside health plans, is a viable alternative.