A new measure of the impact of managed care on healthcare markets.
BACKGROUND
Most studies of managed care impact have used health maintenance organization (HMO) penetration or index of competition as the marker of managed care impact. However, little empirical evidence has been found to support the validity of these or other measures in current use. In addition, as managed care evolves to forms other than HMOs and managed care penetration in large metropolitan areas approaches 100% of commercially insured patients, the utility of the most commonly used measure, HMO penetration, will decrease still further.


OBJECTIVE
To provide a preliminary analysis of the use of premiums as a measure of market impact of managed care.


METHODS
Retrospective analysis (quartile, correlation, multiple-variable linear regression) of publicly available datasets.


METHODS
Labor market-adjusted HMO premiums from 3 publicly available sources, for the 56 largest metropolitan areas in the United States, were compared with penetration and index of competition as predictors of the dependent market variable, hospital bed-days per 1000 population.


RESULTS
Health maintenance organization premiums in the Federal Employees Health Benefits Program emerged as the best predictor of HMO market impact. Average HMO premiums reported in the Interstudy database and for the Medicare+Choice program also outperformed penetration or index of competition in relating to several commonly available markers of competition such as bed-days per 1000.


CONCLUSIONS
Premiums charged by HMOs are a useful measure of the impact of managed care on healthcare markets in large metropolitan areas.
Pawlson
L G
LG
National Committee for Quality Assurance, Washington, DC 20036, USA. pawlson@ncqa.org
Moy
E M
EM
Kim
J I
JI
Griner
P F
PF
D004465:Economic Competition; D005249:Fees and Charges; D019981:Health Care Sector / Q000639:trends*; D006279:Health Maintenance Organizations / Q000191:economics* / Q000458:organization & administration / Q000706:statistics & numerical data; D012189:Retrospective Studies; D014481:United States