S. E. Berki

A psychiatric patient classification system. An alternative to diagnosis-related groups.

It is generally accepted that diagnosis-related groups (DRGs) for alcohol, drug, and mental disorders are inappropriate for inpatient prospective payment. To address this issue, the Veterans Administration (VA) supported a project to construct alternative classes that are more clinically meaningful, more homogeneous in their resource use, and that account for more variation in resource use among psychiatric and substance use cases than existing DRGs. This paper reports on this project. Using a data set containing universally available discharge data plus behavioral, social, and functional information obtained by a survey of 116,191 discharges from VA psychiatric beds, and with AUTOGRP as the classifying algorithm, a classification system was formed. Twelve psychiatric diagnostic groupings (PDGs) were identified, analogous to major diagnostic groups in the DRG system. Within each PDG, from 4 to 9 terminal groups of Psychiatric Patient Classes (PPCs) were formed and validated. The 12 substance abuse PPCs explain >31% of the variation in length of stay; for the mental disorder PPCs the variance explanation is >11%, a substantial improvement over DRGs that, for the same data set, explain <2 and 3%, respectively. With the addition of only 5 variables beyond those presently included in discharge data sets, greater precision for payment purposes can be achieved. Implications for adoption of this classification system are discussed.

HMO Enrollment: Who Joins What and Why: A Review of the Literature

Enrollment in an HMO involves a simultaneous choice of insurance benefits and a provider system. Review of an extensive series of studies shows that breadth of coverage, lower cost, and assured access to benefits are key elements anticipated in the choice. But so too are the perceived limitations inherent in selection of a physician within a close-panel plan, and the inconvenience of centralized sites. For the design and evaluation of future policy, current knowledge based on past enrollment behavior offers only tentative suggestions.

Enrollment choice in a mutli-HMO setting:the roles of health risk, financial vulnerability, and access to care.

ported. Previous studies concern dual-choice situations; this paper deals with a quadruple-choice situation involving one open- and two closed-panel HMO-type plans as well as Blue Cross/Blue Shield (BC/BS). The riskvulnerability hypothesis is disaggregated into its components and the results show that there is no adverse health risk self-selection in an employed population. The hypothesis of economic vulnerability is maintained when tested in terms of per capita income rather than the previously used measure of family income. It is shown that those who enroll in any HMO-type plan are younger and have younger and larger families and lower per capita income than those who do not. No meaningful differences in terms of health status, health concerns, or prior utilization are found. Of the few differences found between those who enroll in closed- and open-panel HMO-type plans, having a private physician as the usual source of care is the most significant: those with an established physician relationship who join any HMO-type plan tend to follow their physician into the open-panel plan. The results should not be generalized to situations involving premium differences since the premium cost to subscribers in any of the plans considered here was fully paid by the employer. The validity of the results in terms of nonfinancial factors, on the other hand, is enhanced by the removal of cost considerations.Results of an analysis of enrollment decisions in HMO-type plans are reported. Previous studies concern dual-choice situations; this paper deals with a quadruple-choice situation involving one open- and two closed-panel HMO-type plans as well as Blue Cross/Blue Shield (BC/BS). The risk-vulnerability hypothesis is disaggregated into its components and the results show that there is no adverse health risk self-selection in an employed population. The hypothesis of economic vulnerability is maintained when tested in terms of per capita income rather than the previously used measure of family income. It is shown that those who enroll in any HMO-type plan are younger and have younger and larger families and lower per capita income than those who do not. No meaningful differences in terms of health status, health concerns, or prior utilization are found. Of the few differences found between those who enroll in closed- and open-panel HMO-type plans, having a private physician as the usual source of care is the most significant: those with an established physician relationship who join any HMO-type plan tend to follow their physician into the open-panel plan. The results should not be generalized to situations involving premium differences since the premium cost to subscribers in any of the plans considered here was fully paid by the employer. The validity of the results in terms of nonfinancial factors, on the other hand, is enhanced by the removal of cost considerations.

On the analysis of ambulatory utilization: an investigation of the roles of need, access and price as predictors of illness and preventive visits.

After separating ambulatory visits into those made in connection with illness or injury and preventive visits, the utilization patterns of a sample of families and individuals are analyzed. Need, in terms of perceived health status and the numbers of acute and chronic conditions, price, and access are found to be the best predictors of visit rates, but their roles in illness and preventive visit rates are different. The methodologically relevant findings indicate that individual self-reports and independent individual observations are required to identify relationships hidden by family member data, such as that between hospital episodes and ambulatory visits. The substantive findings indicate a substitutive relationship between illness and preventive visits, lend further evidence for relatively low price elasticity for illness visits and show that membership in a closed panel health maintenance organization increases preventive visit rate while price has little or no effect on it. The tentative policy implication—that it is not so much price as the characteristics of the usual source of care which appear to determine preventive services utilization—is discussed in the context of potential biases inherent in the sample.

Expectations and experience of HMO enrollees after one year: an analysis of satisfaction, utilization, and costs.

The impact of HMO enrollment on utilization and satisfaction in a sample of industrial employees was investigated using a panel study design. Preenrollment and postenrollment ambulatory utilization rates, out-of-pocket and measures of satisfaction are presented for enrollees in two closed- and one open-panel HMO-type plans. Their health care experiences are compared to those of reenrollees remaining in the HMOs during both surveys, as well as to those retaining their Blue Cross-Blue Shield membership. Lack of access to and dissatisfaction with previous sources of care distinguished the preenrollment experience of those who selected the closedpanel plans; their postenrollment experience produced increasing satisfaction reflecting that their expectations in these areas were met. Continuing enrollees in closed-panel plans were somewhat less satisfied after a year of experience than they were earlier. Those who joined the open-panel plan did so because of the expanded benefits and financial advantages which, their postenrollment experience showed, were accurately perceived. Utilization patterns also changed: continuing enrollees in both types of plans made fewer illness but more preventive visits; new enrollees used greater numbers of both types of services after enrolling than before.

Enrollment choices in different types of HMOs: a multivariate analysis.

Enrollment decisions of a sample of an employed population choosing among open-panel and closed-panel HMOs and Blue Cross/Blue Shield are analyzed. This report, unlike previous ones, overcomes some of the difficulties of bivariate analysis by the use of the multivariate logistic probability model, logit. The results show that there are four consistent predictors of enrollment choice: previous source of care as the measure of access; family life stage and chronic conditions per family member as indicators of health risk; per capita income as the measure of economic vulnerability; and health concern. Having a private physician as the source of care is the best single predictor, its absence predicting a higher probability of enrollment in the closed, and its presence in the openpanel HMO. Higher risk life stage families, younger and with more children, are more likely to join the open-panel plan than the closed or retain BC/BS; higher incomes and larger numbers of chronic conditions appear to have the same effects. Higher levels of health concern, on the other hand, predict a greater probability of choosing the closed-panel plan. The probability of enrollment in any HMO is predicted with more than 50 per cent accuracy for 60 per cent of the sample. Choice between open and closed-panel plans is predicted with an accuracy in excess of 50 per cent for 80 per cent, and with an accuracy greater than 90 per cent for over 10 per cent of potential enrollees. The applicability of this approach to HMO feasibility analysis and planning is clearly indicated.

Health concern, HMO enrollment, and preventive care use

A sample of 1,042 adults was drawn from an employed population who were given the option of enrollment in any of three prepaid, HMO-type organizations, one of which was an open-panel foundation, or continued subscription in a conventional Blue Cross/Blue Shield plan. The subjects in the sample were interviewed to examine three hypothesized relationships: (1) Enrollees in any HMO will exhibit higher levels of health concern than members of other health plans. (2) Users of preventive services will exhibit a higher level of health concern than nonusers. (3) Expressed health concern is a predictor of the rate of preventive use. Data were analyzed by bivariate and multivariate techniques. Support was found for each hypothesis. We found that, although the level of perceived health status did not vary across enrollees in the various plans, those who chose a closed-panel plan reported the highest level of health concern. Health concern was positively related to the use of preventive services, and the mean number of visits as well as the percentage of individuals who use them were the largest for the members of the closed-panel plans. We also found that health concern was a predictor of preventive use. Regression analysis was used to explore various relationships between health status, health concern, plan membership, and the use of preventive services. The hypothesis of adverse self-selection is questioned. The generalizability of the findings is limited to employed, essentially middle-income groups.

Health Maintenance Organizations as Medicaid Providers

Evolution of a one-door, one-class system of medicine for all Americans was the professed goal of the social legislation of the 1960s. The development of health maintenance organizations (HMOs) was seen to be a major mechanism for assuring access to care and at the same time reducing the costs of social health programs. This has currently been reinforced by procompetitive proposals, which predict great efficiency resulting from the envisaged competition among organized systems of care. This article argues that established HMOs have no incentives to enroll Medicaid beneficiaries and that under current arrangements Medicaid beneficiaries have no incentives to enroll in HMOs. As Medicaid programs across the states are cut, resulting in fewer benefits and more restricted physician payments, beneficiaries may have greater incentives to enroll in organized systems. Private physicians may also face greater incentives to develop HMOs to serve Medicaid beneficiaries. If that happens, however, a two-class system—one for the poor and one for others—will be institutionalized; and to assure minimum standards of care for the poor, more, not less, regulation will be required.

Health care policy: lessons from the past and issues of the future.

Liberal distributional values, the increasingly powerful capacity of medicine to provide more and better care, and concern about the health hazards of an industrial society fueled the vast expansion of the health care sector during the last 20 years. That growth was facilitated by a growing economy. The current health policy debate at one level reexamines the distributional bases of entitlement programs, and at another seeks alternative resource allocation mechanisms to reduce the cost of health care. This article has two themes. First, distributional and allocational policies are shown to be intrinsically related, so that the health policy debate is fundamentally a clash between liberal and libertarian values. Second, the inexorable social forces driving the health care system are shown to be the aging of the population and the rapid expansion of technology. The resulting dynamics imply the further growth of the health sector, now in the environment of a sluggish economy. Future policies will have to struggle with how to ration scarce health resources and how to reorient the health care sector to the problems of the aged.