Why Not the Best for the Chronically Ill?

SUMMARY

Premium adjustors to neutralize risk selection among health plans are the weakest component in the technology for assuring competitive markets. It will be many years before we have adjustors adequate to free health plans to invest in and market improved managed care to predictably high-cost chronically ill persons. For want of a fair premium, health plans are driven by risk selection to underinvest in and otherwise “demarket” care to these very employees and beneficiaries whose costs and care most need to be managed. To achieve best value for the chronically ill, large employer coalitions, Medicare, and Medicaid should consider radical new approaches, such as establishing separate prices for care to people with specific chronic conditions and purchasing such care both from health plans and directly from provider systems. [Article copies available for a fee from The Haworth Document Delivery Service: 1-800-342-9678. E-mail address: [email protected]]

Notes

See also James C. Robinson (1993). A Payment Method for Health Insurance Purchasing Cooperatives. Health Affairs, supplement, 65-75.

See also Joseph P. Newhouse et al. (1993). Risk Adjustment for a Childrens’ Capitation Rate. Health Care Financing Review, 39-54.

For a recent review of this and related research, see Jinnet Fowles; Jonathan Weiner; David Knudson (1994). A Comparison of Alternative Approaches to Risk Measurement. Physician Payment Review Commission..

For more on ACGs, see Barbara Starfield et al. (1991). Ambulatory Care Groups: A Categorization of Diagnoses for Research and Management. Health Services Research 26 (1).

Additional information

Notes on contributors

Stanley B. Jones

Stanley B. Jones is Director of the Health Insurance Reform Project, George Washington University, Washington, D.C.