Using survey measures to assess risk selection among Medicare managed care plans.
This paper quantifies risk selection among competing Medicare managed care plans, using beneficiary survey data from the Consumer Assessments of Health Plans Survey. Selection, measured by variation in plan-level prevalence of health conditions and predicted costs, was substantial. A plan with moderate (one standard deviation) adverse selection would have predicted costs 11.6% above an average plan. Only a small part of this variation was explained by the geographical differences in the prevalence of health conditions among or within Metropolitan Statistical Areas, indicating that the selection was driven by plan attributes. Plans serving members with greater health needs have the potential to establish programs to serve these sick members well, yet this places plans at financial risk. Hence, improved risk adjustment for chronic conditions may be warranted. Moreover, survey measures have the potential to measure the prevalence of such conditions reliably and consistently across plans.
Zaslavsky
Alan M
AM
Department of Health Care Policy, Harvard Medical School, Boston, MA 02115, USA.
Buntin
Melinda J Beeuwkes
MJ
D000328:Adult; D000368:Aged; D002391:Catchment Area, Health; D002908:Chronic Disease / Q000191:economics / Q000453:epidemiology; D006233:Persons with Disabilities / Q000706:statistics & numerical data; D005163:Factor Analysis, Statistical; D017048:Health Care Costs / Q000706:statistics & numerical data; D006301:Health Services Needs and Demand; D006302:Health Services Research; D006304:Health Status; D006801:Humans; D015273:Insurance Selection Bias; D008329:Managed Care Programs / Q000458:organization & administration* / Q000706:statistics & numerical data; D020398:Medicare Part C / Q000458:organization & administration* / Q000706:statistics & numerical data; D008875:Middle Aged; D015995:Prevalence; D020379:Risk Adjustment; D014481:United States / Q000453:epidemiology