Out-of-plan use under two prepaid plans

This analysis of out-of-plan use of physician and paramedical services under a Kaiser plan and under a prepaid option offered by a predominantly fee-for-service group practice (Clinic plan) deals primarily with services that members could have obtained from plan providers ("covered services"). The extent and pattern of out-of-plan use were found to be similar. While 16-20 per cent of plan members used some out-of-plan covered services and the mean number of such services was about one half visit per member per year, most out-of-plan user were occasional user, 10-12 per cent of user (or 2 per cent of plan members) accounting for 50 per cent of all out-of-plan covered services. The principal members characteristics associated with out-of-plan use were dissatisfaction, health status and having other insurance. The literature on out-of-plan use is also reviewed.

Use of hospital services under two prepaid plans

This study compares the use of hospital services under two prepaid plans offered to Stanford University employees and their families. One is a Kaiser plan while under the other (Clinic plan), physician services are provided by the Palo Alto Medical Clinic, a multispecialty, largely fee-for-service group practice, and hospital services are covered by a Blue Cross policy. Using age- and sex-adjusted data, the hospital admission rate excluding deliveries is higher under the Clinic plan (44.2 admissions per 1,000 personyears compared with 38.2 under the Kaiser plan), but hospital days per 1,000 personyears are almost identical (249.8 days under the Kaiser plan, 250.7 under the Clinic plan). The difference in the admission rates is due to the higher surgical admission rate under the Clinic plan (32.4 admissions per 1,000 personyears compared to 25.0 under the Kaiser plan). However, when surgical procedures performed in the hospital on a nonadmission basis are added to surgical admissions, the surgical rates under the two plans become very close (35.7 admissions and procedures per 1,000 personyears under the Kaiser plan and 37.6 under the Clinic plan). This lends some support to the hypothesis that the lower hospital surgery rates found under prepaid group practice plans may be due as much to the group practice form of their organization as to their prepaid feature. The authors offer some possible reasons why surgeons in fee-for-service group practices may have relatively low surgery rates even though they do not have the incentive to hold down costs which surgeons in prepaid group practices have.

Use of physician services under two prepaid plans

Use of physician services under two prepaid plans offered to Stanford University staff is analyzed and compared. One is a Kaiser plan; under the other (Clinic plan), physician and outpatient ancillary services are provided by a predominantly fee-for-service group practice and hospital services are covered by a Blue Cross policy. The two plans provide much the same benefits but, in addition to the difference in their organization, they differ in their financial provisions. While the Kaiser plan has only a token copayment for office and home visits, the Clinic plan has a 25 per cent coinsurance provision applying to all physician and outpatient ancillary services. Despite these differences, the mean number of physician visits per year is the same for the two groups after account is taken of differences in age composition, socioeconomic status, health status, attitudes toward seeking care, length of plan membership, family size and satisfaction with the plan. However, when adjustment is also made for differences in physician affiliation, the Kaiser rate becomes half a visit higher than the Clinic rate. This is because under both plans, members who have a specific plan physician as regular source of care use more services than those without one, and because only 42 per cent of Kaiser members compared with 87 per cent of Clinic members stated that they had a specific plan physician.

Factor affecting the choice between two prepaid plans

This study examines the factors affecting the choice between two comprehensive prepaid plans of medical care available to the staff of Stanford University. One is a Kaiser plan, offered since 1969. Under the other (Clinic plan for short), medical services are provided by a predominantly fee-for-service group practice and hospital services are covered by a standard Blue Cross hospital policy; the Clinic plan has been available since the 1950s. The Kaiser plan has only a token copayment for office and home visit while the Clinic plan has a 25 per cent coinsurance provision applying to all physician and outpatient ancillary services. It was found that the two major factors affecting choice were income and distance to the provider. The preference for the Kaiser plan increased as income decreased. Similarly, as distance from the Clinic increased and distance from a Kaiser facility decreased, the preference for the Kaiser plan increased. However, proximity to the provider was a more important factor for the higher-income Clinic plan subscribers. The data also show that the longer availability of the Clinic plan had a long-term effect on enrollment. A substantial proportion of long time Stanford employees who might have been expected to prefer the Kaiser plan stayed with the Clinic plan.

Coinsurance and the demand for physician services: four years later

In 1971 a study was made of the effects of a 25-percent coinsurance provision on the demand for physician services under a comprehensive prepaid plan for medical care. Comparing physician utilization rates in 1966 (the year before coinsurance was introduced) and 1968 (the first calendar year after the change) showed that coinsurance led to a 24-percent decline in the per capita number of all physician visits that held true regardless of how the data were examined--whether by demographic characteristics of the study population, physician specialization, or place of visit. This effect of coinsurance could be temporary--a kind of shock effect that would wear off. Since there was no conclusive proof of this hypothesis, the authors conducted a followup study, comparing physician utilization rates in 1972 and 1968. They found no evidence of any upward trend in the use of physician services. The overall utilization rate was much the same in 1972 as in 1968, and the rates of the demographic subgroups and types of visits were either much the same or slightly lower. Equally important was the finding that the plan had become relatively unattractive for families in the lowest socioeconomic group who constituted a smaller proportion of the 1972 plan membership than of the pre-coinsurance membership.