Understanding biased selection in Medicare HMOs

Completeness of cohort-linked U.S. Medicare data: An example from the Agricultural Health Study (1999–2016)

•

We describe linked U.S. Medicare claims data in the Agricultural Health Study.

•

Incomplete claims data were related to geographic, demographic, and health.

•

We saw potential informative missingness by pesticide use and mortality.

•

Incomplete data in Medicare-linked cohorts may impact sample size and validity.

Medicare Fee for Service (FFS) claims data, including inpatient (Part A) and outpatient (Part B) services, provide a valuable resource for research on older adults (≥65 year) in linked U.S. cohorts. Here we describe our experience linking the Agricultural Health Study cohort, including 47,501 licensed pesticide applicators and spouses from North Carolina (NC) and Iowa (IA) to Medicare claims data from 1999 to 2016. Given increased Part C (i.e., managed care/Medicare Advantage) enrollment during this period, and a resulting lack of available Part C claims data prior to 2015, we also explored potential for informative missingness. We compared those with partial or limited/no FFS to those with complete FFS coverage (i.e., ≥11 months per year parts AB, but not C, throughout Medicare enrollment) in relation to baseline farm size, general pesticide use, and mortality, in logistic regression models adjusted for age, sex, race, education, and smoking, and stratified by state. While 46,689 participants (98%) were linked to Medicare IDs, only 33,487 (70%) had complete FFS, 9353 (20%) had partial FFS (≥1 year FFS but not complete), and 3849 (8%) had limited/no FFS (Part A or Part C-only). Incomplete FFS was more common in NC, mostly due to Part C, and was associated with farm characteristics, pesticide use, and mortality. These findings indicate that, in addition to reduced sample size in analyses limited to complete FFS, missingness may not be random. The potential impact of incomplete FFS data and changes in coverage type need to be considered when planning linked analyses and interpreting results.

A decade of experience for high-needs beneficiaries under Medicare Advantage

OBJECTIVE

To describe the association between longitudinal enrollment in Medicare Advantage (MA) and utilization, access, quality of care, and health outcomes for beneficiaries with complex health needs.

DATA SOURCES/STUDY SETTING

Beneficiary characteristics, enrollment, and outcomes data from the 2004-2016 waves of the Health and Retirement Study (HRS).

STUDY DESIGN

Using the HRS panel structure, we identified beneficiaries consistently reporting high needs as well as enrollment in MA versus traditional Medicare (TM). We first evaluated a robust set of beneficiary characteristics to identify those that distinguish beneficiaries who consistently enrolled in MA versus TM. We then described adjusted differences in outcomes between high-needs beneficiaries who consistently enrolled in MA versus TM.

PRINCIPAL FINDINGS

Among high-needs beneficiaries, there was a modest amount of favorable selection into MA based on health. Controlling for several characteristics, MA enrollees used less care (with a 6.6 percentage point (pp) lower probability of hospitalization, 4.7 fewer physician visits, and a 5.1 pp lower probability of using home health care), had a 4.1 pp greater probability of being unable to afford their care, and had a 5.7 pp lower probability of reporting that they were very satisfied with their care. Compared to associations between MA and outcomes for high-needs beneficiaries, for non-high-needs beneficiaries MA enrollment was associated with smaller decreases in utilization and no statistically significant difference in the inability to afford care.

CONCLUSIONS

Our descriptive findings raise the possibility that high-needs beneficiaries may experience unique challenges in MA compared to their non-high-needs counterparts.

The Role of Behavioral Health Diagnoses in Adverse Selection

OBJECTIVE

Adverse selection in medical insurance is well documented; however, little is known about the role of behavioral health. This study's objective was to examine the probability of being enrolled in the lowest-deductible plan among commercially insured patients, according to psychiatric diagnosis.

METHODS

This cross-sectional study used 2012-2013 benefit design and plan choice data linked to 2011-2012 behavioral health claims for a national sample of individuals (N=116,975) and different family types (couple with at least one dependent, N=59,237; single subscriber with at least one dependent, N=19,066; couple with no dependents, N=40,917) with Optum, UnitedHealth Group "carve-in" plans. Analyses included multiple logistic regressions examining whether the individual (or family) was enrolled in the plan with the lowest deductible as functions of whether individuals (or family members) had any psychiatric diagnosis, the number of psychiatric diagnoses they had, and whether they had individual major psychiatric diagnoses.

RESULTS

For individuals, having any psychiatric diagnosis was associated with an increase of about 10% in the probability of being enrolled in the lowest-deductible plan compared with having no psychiatric diagnosis (44.9% vs. 40.7%, p=0.04). Each additional psychiatric diagnosis increased this probability by three percentage points (p=0.02). A diagnosis of depression was associated with the largest increase.

CONCLUSIONS

When individuals were offered the choice of a health insurance plan, having a prior psychiatric diagnosis (specifically depression) was associated with being enrolled in the lowest-deductible plans. Individuals with depression may anticipate future expenditures and select plans accordingly.

Analysis of Drivers of Disenrollment and Plan Switching Among Medicare Advantage Beneficiaries

IMPORTANCE

How often enrollees with complex care needs leave the Medicare Advantage (MA) program and what might drive their decisions remain unknown.

OBJECTIVE

To characterize trends in switching to and from MA among high-need beneficiaries and to evaluate the drivers of disenrollment decisions.

DESIGN, SETTING, AND PARTICIPANTS

This cross-sectional study of MA and traditional Medicare (TM) enrollees from January 1, 2014, through December 31, 2015, used a multinomial logit regression stratified by Medicare-Medicaid eligibility status. All 14 589 645 non-high-need MA enrollees and 1 302 470 high-need enrollees in the United States who survived until the end of 2014 were eligible for the analysis. Data were analyzed from November 1, 2017, through August 1, 2018.

EXPOSURES

Enrollee dual eligibility and high-need status (based on complex chronic conditions, multiple morbidities, use of health care services, functional impairment, and frailty indicators), MA plan star rating, and cost sharing.

MAIN OUTCOMES AND MEASURES

The proportion of enrollees who disenrolled into TM, remained in the same MA plan, or who switched plans within the MA program.

RESULTS

A total of 13 901 816 enrollees were included in the analysis (56.2% women; mean [SD] age, 70.9 [9.9] years). Among the 1 302 470 high-need enrollees, an adjusted 4.6% (95% CI, 4.5%-4.6%) of Medicare-only and 14.8% (95% CI, 14.5%-15.0%) of Medicare-Medicaid members switched from MA to TM compared with 3.3% (95% CI, 3.3%-3.3%) and 4.6% (95% CI, 4.5%-4.7%), respectively, among non-high-need enrollees. Among enrollees in low-quality plans, 23.0% (95% CI, 22.3%-23.9%) of Medicare and 42.8% (95% CI, 40.5%-45.1%) of dual-eligible high-need enrollees left MA. Even in high-quality plans, high-need members disenrolled at higher rates than non-high-need members (4.9% [95% CI, 4.6%-5.2%] vs 1.8% [95% CI, 1.8%-1.9%] for Medicare-only enrollees and 11.3% vs 2.4% dual eligible enrollees). Enrollment in a 5.0-star rated plan was associated with a 30.1-percentage point reduction (95% CI, -31.7 to -28.4 percentage points) in the probability of disenrollment among high-need individuals. A $100 increase in monthly premiums was associated with a 33.9-percentage point increase (95% CI, -34.9 to -33.0 percentage points) in the likelihood of switching plans, and a small reduction in the likelihood of disenrolling (-2.7 percentage points; 95% CI, -3.2 to -2.2 percentage points). Among Medicare-Medicaid eligible participants, 14.1% (95% CI, 14.0%-14.2%) of high-need and 16.7% (95% CI, 16.6%-16.7%) of non-high-need enrollees switched from TM to MA.

CONCLUSIONS AND RELEVANCE

Results of this study suggest that substantially higher disenrollment from MA plans occurs among high-need and Medicare-Medicaid eligible enrollees. This study's findings suggest that star ratings have the strongest association with disenrollment trends, whereas increases in monthly premiums are associated with greater likelihood of switching plans.

Hospice Care of Veterans in Medicare Advantage and Traditional Medicare: A Risk-Adjusted Analysis

OBJECTIVES

To compare the quality of end-of-life care in Medicare Advantage (MA) and traditional Medicare (TM), specifically, receipt and length of hospice care.

DESIGN

Retrospective analysis of administrative data.

SETTING

Hospice care.

PARTICIPANTS

Veterans dually enrolled in the Veterans Health Administration (VHA) and MA or TM who died between 2008 and 2013 (N = 1,515,441).

MEASUREMENTS

Outcomes studied included use and duration of hospice care. Use of a VHA-enrolled population allowed for risk adjustment that is otherwise challenging when studying MA.

RESULTS

Adjusted analyses revealed that MA beneficiaries were more likely to receive hospice than TM beneficiaries; results corroborate published non-risk-adjusted analyses. MA beneficiaries had shorter hospice duration; this is an opposite direction of effect than non-risk-adjusted analyses. Results were robust to multiple sensitivity analyses limiting the cohort to individuals in MA and TM who had equal opportunity for their comorbidities to be captured. Removing risk adjustment resulted in results that mirrored those in the existing published literature.

CONCLUSION

Our work provides two important insights regarding MA that are important to consider as enrollment in this insurance mechanism grows. First, MA beneficiaries received poorer-quality end-of-life care than TM beneficiaries, as ascertained by exposure to hospice. Second, any comparisons made between MA and TM require proper risk adjustment to obtain correct directions of effect. We encourage the Centers for Medicare & Medicaid Services to make comorbidity data specific to MA enrollees available to researchers for these purposes.

Health plan choice in the Netherlands: restrictive health plans preferred by young and healthy individuals

In a health care system based on managed competition, health insurers negotiate on quality and price with care providers and are allowed to offer restrictive health plans. It is crucial that enrolees who need care choose restrictive health plans, as otherwise health insurers cannot channel patients to contracted providers and they will lose their bargaining power in negotiations with providers. We aim to explain enrolees' choice of a restrictive health plan in exchange for a lower premium. In 2014 an online survey with an experimental design was conducted on members of an access panel (response 78%; n=3,417). Results showed 37.4% of respondents willing to choose a restrictive health plan in exchange for a lower premium. This fell to 22% when the restrictive health plan also included a longer travelling time. Enrolees who choose a restrictive health plan are younger and healthier, or on lower incomes, than those preferring a non-restrictive one. This means that enrolees who use care will be unlikely to choose a restrictive health plan and, therefore, health insurers will not be able to channel them to contracted care providers. This undermines the goals of the health care system based on managed competition.

Validation of an algorithm to determine the primary care treatability of emergency department visits

OBJECTIVES

We propose a new claims-computable measure of the primary care treatability of emergency department (ED) visits and validate it using a nationally representative sample of Medicare data.

STUDY DESIGN AND SETTING

This is a validation study using 2011-2012 Medicare claims data for a nationally representative 5% sample of fee-for-service beneficiaries to compare the new measure's performance to the Ballard variant of the Billings algorithm in predicting hospitalisation and death following an ED visit.

OUTCOMES

Hospitalisation within 1 day or 1 week of an ED visit; death within 1 week or 1 month of an ED visit.

RESULTS

The Minnesota algorithm is a strong predictor of hospitalisations and deaths, with performance similar to or better than the most commonly used existing algorithm to assess the severity of ED visits. The Billings/Ballard algorithm is a better predictor of death within 1 week of an ED visit; this finding is entirely driven by a small number of ED visits where patients appear to have been dead on arrival.

CONCLUSIONS

The procedure-based approach of the Minnesota algorithm allows researchers to use the clinical judgement of the ED physician, who saw the patient to determine the likely severity of each visit. The Minnesota algorithm may thus provide a useful tool for investigating ED use in Medicare beneficiaries.

Medicare Managed Care Spillovers and Treatment Intensity

Evidence suggests that the share of Medicare managed care enrollees in a region affects the costs of treating traditional fee-for-service (FFS) Medicare beneficiaries; however, little is known about the mechanisms through which these 'spillover effects' operate. This paper examines the relationship between Medicare managed care penetration and treatment intensity for FFS enrollees hospitalized with a primary diagnosis of AMI. I find that increased Medicare managed care penetration is associated with a reduction in both the costs and the treatment intensity of FFS AMI patients. Specifically, as Medicare managed care penetration increases, FFS AMI patients are less likely to receive surgical reperfusion and mechanical ventilation and to experience an overall reduction in the number of inpatient procedures. Copyright © 2015 John Wiley & Sons, Ltd.

Characteristics of Medicare Advantage and Fee-for-Service Beneficiaries Upon Enrollment in Medicare at Age 65

Previous research has found differences in characteristics of beneficiaries enrolled in Medicare fee-for-service versus Medicare Advantage (MA), but there has been limited research using more recent MA enrollment data. We used 1997-2005 National Health Interview Survey data linked to 2000-2009 Medicare enrollment data to compare characteristics of Medicare beneficiaries before their initial enrollment into Medicare fee-for-service or MA at age 65 and whether the characteristics of beneficiaries changed from 2006 to 2009 compared with 2000 to 2005. During this period of MA growth, the greatest increase in enrollment appears to have come from those with no chronic conditions and men.

Health Effects of Managed Care Among the Near-Elderly

Objectives: The authors evaluate whether enrolling in a health maintenance organization (HMO) or preferred provider organization (PPO) affects the health of adults ages 55 to 64, relative to fee-for-service plans. Methods: A nationwide random sample of 4,044 adults with employer-sponsored health insurance is drawn from the 1994 to 2000 waves of the Health and Retirement Study. Multinomial logit regressions are estimated for self-reported general health status, first using a sample of all near-elders, then using subsamples of near-elders with and without longstanding chronic health conditions. The possibility of selection bias into managed care plans is considered and explicitly addressed in model estimation. Results: We find no ill effects of HMOs on health status, and older adults with a history of chronic health conditions actually fare better upon enrolling in these plans. Discussion: More research is needed to understand the reasons for the observed beneficial effects of managed care.

How Does Managed Care Improve the Quality of Breast Cancer Care Among Medicare-Insured Minority Women?

PURPOSE

The aim of this study is to investigate if evidence-based clinical guidelines are implemented equitability among ethnic minority breast cancer patients using Medicare Advantage and investigate if presumed advantages of managed care over fee-for-service are greater for minorities than for Whites.

METHODS

Data from the Surveillance, Epidemiology, and End Results and Medicare were used to examine 70,755 women over age 65 diagnosed with early stage breast cancer between 2005 and 2009. Implementation of two clinical guidelines was assessed: receipt of radiation therapy after breast conserving surgery and estrogen receptor status documentation. Multilevel logistic regression and inverse propensity weighting controlled for confounding.

RESULTS

African Americans are still less likely than Whites to receive radiation therapy after breast-conserving surgery, whether they use Medicare fee-for-service (OR 95 % CI) = 0.90 (0.83, 0.98) or managed care (OR 95 % CI) = 0.87 (0.76, 1.00). Differences between receipt of radiation therapy by insurance plan type was nonexistent. Relative to FFS, the use of managed care improved the odds of having estrogen receptor status documented by 44 % in African Americans, (OR 95 % CI) = 1.44 (1.15, 1.83) and by 42 % in Latina patients (OR 95 % CI) = 1.42 (1.17, 1.78).

CONCLUSIONS

Compared to Medicare fee-for-service, ethnic and racial disparities among Medicare Advantage users were reduced. We observed fewer disparities, but not an elimination of disparities, among Medicare Advantage enrollees receiving breast cancer care with an organizational and patient component of care. This suggests managed care may still need to focus on minority patient empowerment and involvement in care.

Associations between health-related quality of life and mortality in older adults

This study measures the use and relative importance of different measures of health-related quality of life (HRQOL) as predictors of mortality in a large sample of older US adults. We used Cox proportional hazards models to analyze the association between general self-reported health and three "healthy days" (HDs) measures of HRQOL and mortality at short-term (90-day) and long-term (2.5 years) follow-up. The data were from Cohorts 6 through 8 of the Medicare Health Outcomes Survey, a national sample of older adults who completed baseline surveys in 2003-2005. At the long term, reduced HRQOL in general health and all categories of the HDs were separately and significantly associated with greater mortality (P < 0.001). In multivariate analysis of long-term mortality, at least one HD category remained significant for each measure, but the associations between mental health and mortality were inconsistent. For short-term mortality, the physical health measures had larger hazard ratios, but fewer categories were significant. Hazard ratios decreased over time for all measures of HRQOL except mental health. In conclusion, HRQOL measures were shown to be significant predictors of short- and long-term mortality, further supporting their value in health surveillance and as markers of risk for targeted prevention efforts. Although all four measures of HRQOL significantly predicted mortality, general self-rated health and age were more important predictors than the HDs.

MEDICARE PAYMENTS AND SYSTEM-LEVEL HEALTH-CARE USE: The Spillover Effects of Medicare Managed Care

The rapid growth of Medicare managed care over the past decade has the potential to increase the efficiency of health-care delivery. Improvements in care management for some may improve efficiency system-wide, with implications for optimal payment policy in public insurance programs. These system-level effects may depend on local health-care market structure and vary based on patient characteristics. We use exogenous variation in the Medicare payment schedule to isolate the effects of market-level managed care enrollment on the quantity and quality of care delivered. We find that in areas with greater enrollment of Medicare beneficiaries in managed care, the non-managed care beneficiaries have fewer days in the hospital but more outpatient visits, consistent with a substitution of less expensive outpatient care for more expensive inpatient care, particularly at high levels of managed care. We find no evidence that care is of lower quality. Optimal payment policies for Medicare managed care enrollees that account for system-level spillovers may thus be higher than those that do not.

Comparison of estimation methods for creating small area rates of acute myocardial infarction among Medicare beneficiaries in California

Creating local population health measures from administrative data would be useful for health policy and public health monitoring purposes. While a wide range of options--from simple spatial smoothers to model-based methods--for estimating such rates exists, there are relatively few side-by-side comparisons, especially not with real-world data. In this paper, we compare methods for creating local estimates of acute myocardial infarction rates from Medicare claims data. A Bayesian Monte Carlo Markov Chain estimator that incorporated spatial and local random effects performed best, followed by a method-of-moments spatial Empirical Bayes estimator. As the former is more complicated and time-consuming, spatial linear Empirical Bayes methods may represent a good alternative for non-specialist investigators.

Varied differences in the health status between Medicare advantage and fee-for-service enrollees

This article examines the differences in mortality measured health status between the Medicare Advantage (MA) program and Fee-for-Service (FFS) program from 1999 to 2007. At the national level, differences in mortality rates were associated with MA market share. In some counties, enrollees in the MA program were 40% less likely to die than their peers in the FFS program, but in other counties, they were 20% more likely to die. Cost shifting between the two programs could bias county classifications of average FFS spending, and enlarged disparities in health status could make it difficult to evaluate risk adjusters.

Measuring coding intensity in the Medicare Advantage program

BACKGROUND

In 2004, Medicare implemented a system of paying Medicare Advantage (MA) plans that gave them greater incentive than fee-for-service (FFS) providers to report diagnoses.

DATA

Risk scores for all Medicare beneficiaries 2004-2013 and Medicare Current Beneficiary Survey (MCBS) data, 2006-2011.

MEASURES

Change in average risk score for all enrollees and for stayers (beneficiaries who were in either FFS or MA for two consecutive years). Prevalence rates by Hierarchical Condition Category (HCC).

RESULTS

Each year the average MA risk score increased faster than the average FFS score. Using the risk adjustment model in place in 2004, the average MA score as a ratio of the average FFS score would have increased from 90% in 2004 to 109% in 2013. Using the model partially implemented in 2014, the ratio would have increased from 88% to 102%. The increase in relative MA scores appears to largely reflect changes in diagnostic coding, not real increases in the morbidity of MA enrollees. In survey-based data for 2006-2011, the MA-FFS ratio of risk scores remained roughly constant at 96%. Intensity of coding varies widely by contract, with some contracts coding very similarly to FFS and others coding much more intensely than the MA average. Underpinning this relative growth in scores is particularly rapid relative growth in a subset of HCCs.

DISCUSSION

Medicare has taken significant steps to mitigate the effects of coding intensity in MA, including implementing a 3.4% coding intensity adjustment in 2010 and revising the risk adjustment model in 2013 and 2014. Given the continuous relative increase in the average MA risk score, further policy changes will likely be necessary.

Beyond black and white: race/ethnicity and health status among older adults

OBJECTIVES

This study examined physical and mental health, health symptoms, sensory and functional limitations, risk factors, and multimorbidity among older Medicare managed care members to assess disparities associated with race/ethnicity.

STUDY DESIGN AND METHODS

We used data on 236,289 older adults from 208 Medicare plans who completed the 2012 Medicare Health Outcomes Survey to compare 14 health indicators across non-Hispanic whites, blacks, American Indians/Alaskan Natives, Asians, Native Hawaiians/Pacific Islanders, multiracial individuals, and Hispanics. Logistic regression models that clustered on the plan estimated the risk of indicators of adverse health and functional status.

RESULTS

Even after controlling for key patient sociodemographic factors, race/ethnicity was significantly associated with most adverse health indicators. Except for Asians, all racial/ethnic minority groups were significantly more likely than whites to report poor mental health status, presence of most health symptoms, sensory limitations, and activities-of-daily-living disability. Important differences were observed across racial and ethnic groups.

CONCLUSIONS

Despite some exceptions, elders of racial/ethnic minority background are generally at higher risk than non-Hispanic whites for a broad range of adverse health and functional outcomes that are not routinely assessed. Limitations include bias related to self-reported data and respondent recall. Future research should consider ethnic subgroup variations; employing newer techniques to improve estimates for smaller groups; and prioritizing and identifying opportunities for care improvement of diverse enrollee groups by considering specific needs. To improve the health status of the elderly, service delivery targeting the needs of specific population groups, coupled with culturally appropriate care for racial/ ethnic minorities, should also be considered.

The spillover effects of Medicare managed care: Medicare Advantage and hospital utilization

More than a quarter of Medicare beneficiaries are enrolled in Medicare Advantage, which was created in large part to improve the efficiency of health care delivery by promoting competition among private managed care plans. This paper explores the spillover effects of the Medicare Advantage program on the traditional Medicare program and other patients, taking advantage of changes in Medicare Advantage payment policy to isolate exogenous increases in Medicare Advantage enrollment and trace out the effects of greater managed care penetration on hospital utilization and spending throughout the health care system. We find that when more seniors enroll in Medicare managed care, hospital costs decline for all seniors and for commercially insured younger populations. Greater managed care penetration is not associated with fewer hospitalizations, but is associated with lower costs and shorter stays per hospitalization. These spillovers are substantial - offsetting more than 10% of increased payments to Medicare Advantage plans.

The importance of dose, frequency and duration of vitamin D supplementation for plasma 25-hydroxyvitamin D

The importance of dose, frequency and duration of vitamin D supplementation for plasma 25(OH)D levels is not well described and rarely reported for supplementation that exceeds 2000 IU per day. The objective is to examine dose, frequency and duration of supplementation in relation to plasma 25(OH)D in a large population-based sample. We accessed data on 2714 volunteers that contributed to 4224 visits and applied multilevel regression. Compared to not using supplements, a minimum regimen of 1000–2000 IU once or twice per week for one month was not effective in raising 25(OH)D. Compared to this minimum regimen, higher doses of 2000–3000, 3000–4000, and 5000 IU or more were associated with a 7.49, 13.19 and 30.22 nmol/L 25(OH)D increase, respectively; frequencies of three to four, five to six and seven times/week were associated with a 5.44, 16.52 and 30.69 nmol/L increase, respectively; and supplementation of five months or longer was associated with an increase of 6.68 nmol/L (p < 0.01 for all). Age, body weight, physical activity, smoking, and self-rated health were significantly associated with 25(OH)D. Whereas dose, frequency and duration of supplementation are important to healthy subjects committed to optimizing their nutritional status, to the design of clinical trials, individual characteristics and lifestyle contribute substantially to 25(OH)D.

Favorable selection, risk adjustment, and the Medicare Advantage program

OBJECTIVES

To examine the effects of changes in payment and risk adjustment on (1) the annual enrollment and switching behavior of Medicare Advantage (MA) beneficiaries, and (2) the relative costliness of MA enrollees and disenrollees.

DATA

From 1999 through 2008 national Medicare claims data from the 5 percent longitudinal sample of Parts A and B expenditures.

STUDY DESIGN

Retrospective, fixed effects regression analysis of July enrollment and year-long switching into and out of MA. Similar regression analysis of the costliness of those switching into (out of) MA in the 6 months prior to enrollment (after disenrollment) relative to nonswitchers in the same county over the same period.

FINDINGS

Payment generosity and more sophisticated risk adjustment were associated with substantial increases in MA enrollment and decreases in disenrollment. Claims experience of those newly switching into MA was not affected by any of the policy reforms, but disenrollment became increasingly concentrated among high-cost beneficiaries.

CONCLUSIONS

Enrollment is very sensitive to payment levels. The use of more sophisticated risk adjustment did not alter favorable selection into MA, but it did affect the costliness of disenrollees.

How does drug treatment for diabetes compare between Medicare Advantage prescription drug plans (MAPDs) and stand-alone prescription drug plans (PDPs)?

OBJECTIVE

To compare the use of guideline-recommended prescription medications for diabetes among Medicare beneficiaries enrolled in stand-alone prescription drug plans (PDPs) with Medicare Advantage prescription drug plans (MAPDs) in the presence of potential selection bias.

DATA SOURCES/STUDY SETTING

Centers for Medicare and Medicaid Services' Chronic Condition Data Warehouse (2006, 2007).

STUDY DESIGN

Retrospective cross-sectional comparison of drug use and proportion of days covered (PDC) for oral-antidiabetics, ACE-inhibitors/ARBs, and antihyperlipidemics among PDP and MAPD enrollees with diabetes. We estimated "naïve" regression models assuming exogenous plan choice and two-stage residual inclusion (2SRI) models to study endogeneity in choice of Part D plan type.

DATA COLLECTION/EXTRACTION METHODS

We identified 111,290 diabetics based on ICD-9 codes in Medicare claims from a random 5 percent sample of Medicare beneficiaries in 2005 excluding dual eligibles.

PRINCIPAL FINDINGS

The naïve regression models indicated lower probability of drug use for oral-antidiabetics (-4 percent; p < .001) and ACE-inhibitors/ARBS (-2 percent; p = .004) among PDP enrollees, but their PDC was higher (3-5 percent) for all drug classes (p < .001). 2SRI models produced no significant differences in any-use equations, but significantly higher PDC values for PDP enrollees for oral-antidiabetics and ACE-inhibitors/ARBs.

CONCLUSIONS

We found similar overall use of recommended drugs in diabetes treatment and no consistent evidence of favorable or adverse selection into PDPs and MAPDs.

Better Quality of Care or Healthier Patients? Hospital Utilization by Medicare Advantage and Fee-for-Service Enrollees

Do differences in rates of use among managed care and Fee-for-Service Medicare beneficiaries reflect selection bias or successful care management by insurers? I demonstrate a new method to estimate the treatment effect of insurance status on health care utilization. Using clinical information and risk-adjustment techniques on data on acute admission that are unrelated to recent medical care, I create a proxy measure of unobserved health status. I find that positive selection accounts for between one-quarter and one-third of the risk-adjusted differences in rates of hospitalization for ambulatory care sensitive conditions and elective procedures among Medicare managed care and Fee-for-Service enrollees in 7 years of Healthcare Cost and Utilization Project State Inpatient Databases from Arizona, Florida, New Jersey and New York matched to Medicare enrollment data. Beyond selection effects, I find that managed care plans reduce rates of potentially preventable hospitalizations by 12.5 per 1,000 enrollees (compared to mean of 46 per 1,000) and reduce annual rates of elective admissions by 4 per 1,000 enrollees (mean 18.6 per 1,000).

New risk-adjustment system was associated with reduced favorable selection in medicare advantage

Health plans participating in the Medicare managed care program, called Medicare Advantage since 2003, have historically attracted healthier enrollees than has the traditional fee-for-service program. Medicare Advantage plans have gained financially from this favorable risk selection since their payments have traditionally been adjusted only minimally for clinical characteristics of enrollees, causing overpayment for healthier enrollees and underpayment for sicker ones. As a result, a new risk-adjustment system was phased in from 2004 to 2007, and a lock-in provision instituted to limit midyear disenrollment by enrollees experiencing health declines whose exodus could benefit plans financially. To determine whether these reforms were associated with intended reductions in risk selection, we compared differences in self-reported health care use and health between Medicare Advantage and traditional Medicare beneficiaries before versus after these reforms were implemented. We similarly compared differences between those who switched into or out of Medicare Advantage and nonswitchers. Most differences in 2001-03 were substantially narrowed by 2006-07, suggesting reduced selection. Similar risk-adjustment methods may help reduce incentives for plans competing in health insurance exchanges and accountable care organizations to select patients with favorable clinical risks.

Medicare managed care plan performance: a comparison across hospitalization types

OBJECTIVE

The study evaluates the performance of Medicare managed care (Medicare Advantage [MA]) Plans in comparison to Medicare fee-for-service (FFS) Plans in three states with historically high Medicare managed care penetration (New York, California, Florida), in terms of lowering the risks of preventable or ambulatory care sensitive conditions (ACSC) hospital admissions and providing increased referrals for admissions for specialty procedures.

STUDY DESIGN/METHODS

Using 2004 hospital discharge files from the Healthcare Cost and Utilization Project (HCUP-SID) of the Agency for Healthcare Research and Quality, ACSC admissions are compared with 'marker' admissions and 'referral-sensitive' admissions, using a multinomial logistic regression approach. The year 2004 represents a strategic time to test the impact of MA on preventable hospitalizations, because the HMOs dominated the market composition in that time period.

FINDINGS

MA enrollees in California experienced 22% lower relative risk (RRR= 0.78, p<0.01), those in Florida experienced 16% lower relative risk (RRR= 0.84, p<0.01), while those in New York experienced 9% lower relative risk (RRR=0.91, p<0.01) of preventable (versus marker) admissions compared to their FFS counterparts. MA enrollees in New York experienced 37% higher relative risk (RRR=1.37, p<0.01) and those in Florida had 41% higher relative risk (RRR=1.41, p<0.01)-while MA enrollees in California had 13% lower relative risk (RRR=0.87, p<0.01)-of referral-sensitive (versus marker) admissions compared to their FFS counterparts.

CONCLUSION

While MA plans were associated with reductions in preventable hospitalizations in all three states, the effects on referral-sensitive admissions varied, with California experiencing lower relative risk of referral-sensitive admissions for MA plan enrollees. The lower relative risk of preventable admissions for MA plan enrollees in New York and Florida became more pronounced after accounting for selection bias.

Methodological issues in using multiple years of the Medicare current beneficiary survey

BACKGROUND

The analysis presented in this paper examines the multi-year capacity of the Medicare Current Beneficiary Survey (MCBS).

METHODS

We systematically reviewed the literature for methodological approaches in research using multiple years of the MCBS and categorized the studies by study design, use of survey sampling weights, and variance adjustments. We then replicated the approaches in an empirical demonstration using functional status (activities of daily living (ADL) and 2005-2007 MCBS data.

RESULTS

In the systematic review, we identified 22 pooled, 17 repeated cross-sectional, and 17 longitudinal studies. Less than half of these studies explicitly described the weighting approach or variance estimation. In the empirical demonstration, we showed that different study designs and weighting approaches will yield statistically different estimates.

CONCLUSION

There is a variety of methodological approaches when using multiple years of the MCBS, and some of them provide biased results. Research needs to improve in describing the methods and preferred approaches for using these complex data.

Market characteristics and awareness of managed care options among elderly beneficiaries enrolled in traditional Medicare

BACKGROUND

Medicare beneficiaries' awareness of Medicare managed care plans is critical for realizing the potential benefits of coverage choices.

OBJECTIVES

To assess the relationships of the number of Medicare risk plans, managed care penetration, and stability of plans in an area with traditional Medicare beneficiaries' awareness of the program.

RESEARCH DESIGN

Cross-sectional analysis of Medicare Current Beneficiary Survey data about beneficiaries' awareness and knowledge of Medicare managed care plan availability. Logistic regression models used to assess the relationships between awareness and market characteristics.

SUBJECTS

Traditional Medicare beneficiaries (n = 3,597) who had never been enrolled in Medicare managed care, but had at least one plan available in their area in 2002, and excluding beneficiaries under 65, receiving Medicaid, or with end stage renal disease.

MEASURES

Traditional Medicare beneficiaries' knowledge of Medicare managed care plans in general and in their area.

RESULTS

Having more Medicare risk plans available was significantly associated with greater awareness, and having an intermediate number of plans (2-4) was significantly associated with more accurate knowledge of Medicare risk plan availability than was having fewer or more plans.

CONCLUSIONS

Medicare may have more success engaging consumers in choice and capturing the benefits of plan competition by more actively selecting and managing the plan choice set.

Identifying chronic conditions in Medicare claims data: evaluating the Chronic Condition Data Warehouse algorithm

OBJECTIVE

To examine the strengths and limitations of the Center for Medicare and Medicaid Services' Chronic Condition Data Warehouse (CCW) algorithm for identifying chronic conditions in older persons from Medicare beneficiary data.

DATA SOURCES

Records from participants of the NHANES I Epidemiologic Follow-up Study (NHEFS 1971-1992) linked to Medicare claims data from 1991 to 2000.

STUDY DESIGN

We estimated the percent of preexisting cases of chronic conditions correctly identified by the CCW algorithm during its reference period and the number of years of claims data necessary to find a preexisting condition.

PRINCIPAL FINDINGS

The CCW algorithm identified 69 percent of preexisting diabetes cases but only 17 percent of preexisting arthritis cases. Cases identified by the CCW are a mix of preexisting and newly diagnosed conditions.

CONCLUSIONS

The prevalence of conditions needing less frequent health care utilization (e.g., arthritis) may be underestimated by the CCW algorithm. The CCW reference periods may not be sufficient for all analytic purposes.

Long-term impact of Medicare managed care on patients treated for coronary artery disease

BACKGROUND

Planned health insurance reform promises and has started to cut reimbursement to Medicare managed care (MMC) plans. If such plans provide better care, adjusting for possible better health of their enrollees, then such reimbursement changes may have unforeseen quality consequences.

OBJECTIVES

To examine whether long-term follow-up outcomes of patients who receive intensive interventional care for coronary artery disease differed by Medicare plan type.

RESEARCH DESIGN

Patient-level postdischarge outcomes were multivariate adjusted logistic functions of a patient's insurance type at time of index admission. Data were retrospective secondary percutaneous coronary intervention data from Pennsylvania with 35,417 index admissions in 2004 to 2005 and in-state follow-up hospitalizations within 12 months and in-state death within 3 years of discharge.

RESULTS

MMC insured patients had a consistently estimated 3-year survival benefit (relative risk of death 0.91; P value 0.003) compared with traditional Medicare traditional fee for service patients. Results were robust to propensity score stratification, subset analyses, and rich controls for observed confounders. Implausibly large associations (between an unmeasured confounder and both insurance status and outcomes) would have to be hypothesized to fully explain the observed survival benefit.

CONCLUSIONS

Among a large number of Pennsylvanian elderly patients, receiving a very common therapeutic procedure for highly prevalent disease, being insured with MMC was associated with a clinically meaningful long-term survival benefit. Impending health insurance reform that changes the relative attractiveness of MMC plans may have unintended consequences on outcome quality.

Health plan enrollment and mortality in the Medicare program

Prior studies have found that Medicare health maintenance organization (HMO) enrollees have lower mortality (over a fixed observation period) than beneficiaries in traditional fee-for-service (FFS) Medicare. We use Medicare Current Beneficiary Survey (MCBS) data to compare 2-year predicted mortality for Medicare enrollees in the HMO and FFS sectors using a sample selection model to control for observed beneficiaries characteristics and unobserved confounders. The difference in raw, unadjusted mortality probabilities was 0.5% (HMO lower). Correcting for numerous observed confounders resulted in a difference of -0.6% (HMO higher). Further adjustment for unobserved confounders resulted in an estimated difference of 3.7 and 4.2% (HMO lower), depending on the specification of geographic-fixed effects. The latter result (4.2%) was statistically significant and consistent with prior studies that did not adjust for unobserved confounding. Our findings suggest there may be unobserved confounders associated with adverse selection in the HMO sector, which had a large effect on our mortality estimates among HMO enrollees. An important topic for further research is to identify such confounders and explore their relationship to mortality. The methods presented in this paper represent a promising approach to comparing outcomes between the HMO and FFS sectors, but further research is warranted.

Disentangling incentives effects of insurance coverage from adverse selection in the case of drug expenditure: a finite mixture approach

This paper takes a finite mixture approach to model heterogeneity in incentive and selection effects of drug coverage on total drug expenditure among the Medicare elderly US population. Evidence is found that the positive drug expenditures of the elderly population can be decomposed into two groups different in the identified selection effects and interpreted as relatively healthy with lower average expenditures and relatively unhealthy with higher average expenditures, accounting for approximately 25 and 75% of the population, respectively. Adverse selection into drug insurance appears to be strong for the higher expenditure component and weak for the lower expenditure group.

Medicare managed care enrollment by disability-eligible and age-eligible veterans

OBJECTIVE

To assess factors associated with enrollment in a Medicare advantage (MA) plan versus Medicare fee-for-service plan in 2000-2004 by Medicare-eligible veterans. We also assessed whether these factors differed between disability-eligible veterans and age-eligible veterans.

METHODS

Medicare claims data, VA administrative data, and 2000 census data were constructed in a retrospective cohort study of 20,581 age-eligible veterans and 7541 disability-eligible veterans. MA enrollment in 2000-2004 was estimated in a logistic regression in a pooled sample of age-eligible and disability-eligible veterans that controlled for demographic, socioeconomic, and disease risk factors. Separate logistic regressions also were estimated for age-eligible and disability-eligible veterans.

RESULTS

Minority veterans and veterans with lower disease risk scores were more likely to be enrolled in an MA plan in 2000-2004 than white veterans or veterans with higher risk scores. Age-eligible veterans were more likely to be enrolled if aged 75 or older, female, able to receive free VA care, or not enrolled in Medicaid. Disability-eligible veterans were more likely to be enrolled if they were married or elderly.

CONCLUSIONS

Medicare Advantage plans appeared to benefit from favorable selection of Medicare-eligible veterans.

Market and beneficiary characteristics associated with enrollment in Medicare managed care plans and fee-for-service

BACKGROUND

Risk selection in the Medicare managed care program ("Medicare Advantage") is an important policy concern. Past research has shown that Medicare managed care plans tend to attract healthier beneficiaries and that market characteristics such as managed care penetration may also affect risk selection.

OBJECTIVES

To assess whether patient enrollment in Medicare managed care (MMC) or traditional fee-for-service (FFS) Medicare is related to beneficiary and market characteristics and provide a baseline for understanding how changes in Medicare policy affect MMC enrollment over time.

RESEARCH DESIGN

Data sources were the 2004 Medicare MMC and FFS CAHPS surveys, the Social Security Administration's Master Beneficiary Record, MMC Market Penetration Files, and 2000 Census data. We estimated logistic regression models to assess what beneficiary characteristics predict enrollment in MMC and the moderating effects of market characteristics.

RESULTS

Enrollees in MMC plans tend to have better health than those in FFS. This effect is weaker in areas with more competition. Latinos and beneficiaries with less education and lower income, as indicated by earnings history or local-area median income, are more likely to enroll in MMC.

CONCLUSIONS

Enrollment in MMC is related to beneficiary characteristics, including health status and socioeconomic status, and is modified by MMC presence in the local market. Because vulnerable subgroups are more likely to enroll in MMC plans, the Centers for Medicare & Medicaid Services should monitor how changes to Medicare Advantage policies and payment methods may affect beneficiaries in those groups.

Varicella vaccination and ischemic stroke in children: is there an association?

BACKGROUND

Ischemic stroke is a known complication of varicella disease. Although there have been case reports of ischemic stroke after varicella vaccination, the existence and magnitude of any vaccine-associated risk has not been determined. OBJECTIVE. The purpose of this work was to determine whether varicella vaccination is associated with an increased risk of ischemic stroke and encephalitis in children within 12 months after vaccination.

PATIENTS AND METHODS

We conducted a retrospective cohort study based on computerized data from children 11 months through 17 years old enrolled for > or =12 months in the Vaccine Safety DataLink from 1991 through 2004. International Classification of Disease codes identified cases of ischemic stroke (433-436, 437.1, 437.4, 437.6, 437.8-437.9) and encephalitis (052.0, 323.5, 323.8-9). Cox regression was used to model the risk in the 12 months after vaccination relative to all other person-time. Covariates included calendar time, gender, and stroke risk factors (eg, sickle cell disease).

RESULTS

Varicella vaccine was administered to 35.3% of the 3.2 million children in the cohort. There were 203 new inpatient ischemic stroke diagnoses, including 8 that occurred within 12 months after vaccination; there was no temporal clustering. The adjusted stroke hazard ratio was not elevated during any of the time periods in the 12 months after vaccination. Stroke was strongly associated with known risk factors such as sickle cell disease and cardiac disease. None of the 243 encephalitis cases occurred during the first 30 days after vaccination, and there was no association between encephalitis and varicella vaccination at any time in the 12 months after vaccination.

CONCLUSION

Our retrospective cohort study of >3 million children found no association between varicella vaccine and ischemic stroke.

Managed care and medical expenditures of Medicare beneficiaries

This paper investigates the impact of Medicare HMO penetration on the medical care expenditures incurred by Medicare fee-for-service (FFS) enrollees. We find that increasing penetration leads to reduced spending on FFS beneficiaries. In particular, our estimates suggest that the increase in HMO penetration during our study period led to approximately a 7% decline in spending per FFS beneficiary. Similar models for various measures of health care utilization find penetration-induced reductions consistent with our spending estimates. Finally, we present evidence that suggests our estimated spending reductions are driven by beneficiaries who have at least one chronic condition.

Effect of premium, copayments, and health status on the choice of health plans

OBJECTIVE

Explore effects of comorbidity and prior health care utilization on choice of employee health plans with different levels of cost sharing.

DATA SOURCES/STUDY SETTING

Mayo Clinic employees in Rochester, Minnesota (MCR) under age 65 in January 2004; N = 20,379.

STUDY DESIGN

Assessment of a natural experiment where self-funded medical care benefit options were changed to contain costs within a large medical group practice. Before the change, most employees were enrolled in a plan with first dollar coverage, while 18% had a plan with copays and deductibles. In 2004, 3 existing plans were replaced by 2 new options, one with lower premiums and higher out-of-pocket costs and the other with higher premiums, a lower coinsurance rate, and lower out-of-pocket maximums.

DATA COLLECTION/EXTRACTION METHODS

Data on employees were merged across insurance claims, medical records, eligibility files, and employment files for 2003 and 2004.

PRINCIPAL FINDINGS

As the number of chronic comorbidities among family members increased, the probability of choosing high-premium option also increased. Seventy-two percent of employees with at least 1 family member with comorbidity chose the high-cost option versus 54.7% of employees with no comorbidities. High-premium and low-premium plans seem to subdivide population into discrete risk categories, which may adversely affect the future stability of the insurance plan options.

CONCLUSIONS

Various factors affect decision making of employees regarding the choice of plan with different levels of cost-sharing. In a natural experiment setting where all options were redesigned, the health status of employees and their dependents played a very significant role in plan choice.

Disenrollment from Medicare managed care among beneficiaries with and without a cancer diagnosis

BACKGROUND

Medicare managed care may offer enrollees lower out-of-pocket costs and provide benefits that are not available in the traditional fee-for-service Medicare program. However, managed care plans may also restrict provider choice in an effort to control costs. We compared rates of voluntary disenrollment from Medicare managed care to traditional fee-for-service Medicare among Medicare managed care enrollees with and without a cancer diagnosis.

METHODS

We identified Medicare managed care enrollees aged 65 years or older who were diagnosed with a first primary breast (n = 28 331), colorectal (n = 26 494), prostate (n = 29 046), or lung (n = 31 243) cancer from January 1, 1995, through December 31, 2002, in Surveillance, Epidemiology, and End Results (SEER) cancer registry records linked with Medicare enrollment files. Cancer patients were pair-matched to cancer-free enrollees by age, sex, race, and geographic location. We estimated rates of voluntary disenrollment to fee-for-service Medicare in the 2 years after each cancer patient's diagnosis, adjusted for plan characteristics and Medicare managed care penetration, by use of Cox proportional hazards regression.

RESULTS

In the 2 years after diagnosis, cancer patients were less likely to disenroll from Medicare managed care than their matched cancer-free peers (for breast cancer, adjusted hazard ratio [HR] for disenrollment = 0.78, 95% confidence interval [CI] = 0.74 to 0.82; for colorectal cancer, HR = 0.84, 95% CI = 0.80 to 0.88; for prostate cancer, HR = 0.86, 95% CI = 0.82 to 0.90; and for lung cancer, HR = 0.81, 95% CI = 0.76 to 0.86). Results were consistent across strata of age, sex, race, SEER registry, and cancer stage.

CONCLUSION

A new cancer diagnosis between 1995 and 2002 did not precipitate voluntary disenrollment from Medicare managed care to traditional fee-for-service Medicare.

Selection bias and utilization of the dual eligibles in Medicare and Medicaid HMOs

OBJECTIVE

To examine the existence of selection bias in the first 3 years of the Minnesota Senior Health Options (MSHO) demonstration and to estimate the MSHO effects on medical services utilization after adjusting for selection bias.

DATA SOURCES

Monthly dual eligibility data and MSHO encounter data of March 1997-December 2000 and Medicaid encounter data of January 1995-December 2000 from the Minnesota Department of Human Services; Medicare fee-for-service claims data of January 1995-December 2000 from the Centers for Medicare and Medicaid Services.

STUDY DESIGN

Quasi-experimental design comparing utilization between MSHO and control groups; multiple econometric and statistical models were estimated with time-invariant and time-varying covariates.

PRINCIPAL FINDINGS

Favorable MSHO selection was found in the nursing home (NH) and community populations, but selection bias did not substantially affect the findings. Enrollment in MSHO for more than 1 year reduced inpatient hospital admissions and days, emergency room and physician visits for NH residents, and lowered physician visits for community residents.

CONCLUSIONS

There was favorable selection in the first 3 years of the MSHO program. Enrollment in MSHO reduced several types of utilization for the NH group and physician visits for community enrollees.

Predicting risk selection following major changes in Medicare

The Medicare Modernization Act of 2003 created several new types of private insurance plans within Medicare, starting in 2006. Some of these plan types previously did not exist in the commercial market and there was great uncertainty about their prospects. In this paper, we show that statistical models and historical data from the Medicare Current Beneficiary Survey can be used to predict the experience of new plan types with reasonable accuracy. This lays the foundation for the analysis of program modifications currently under consideration. We predict market share, risk selection, and stability for the most prominent new plan type, the stand-alone Medicare prescription drug plan (PDP). First, we estimate a model of consumer choice across Medicare insurance plans available in the data. Next, we modify the data to include PDPs and use the model to predict the probability of enrollment for each beneficiary in each plan type. Finally, we calculate mean-adjusted actual spending by plan type. We predict that adverse selection into PDPs will be substantial, but that enrollment and premiums will be stable. Our predictions correspond well to actual experience in 2006.

The impact of private insurance coverage on veterans' use of VA care: insurance and selection effects

OBJECTIVE

To examine private insurance coverage and its impact on use of Veterans Health Administration (VA) care among VA enrollees without Medicare coverage.

DATA SOURCES

The 1999 National Health Survey of Veteran Enrollees merged with VA administrative data, with other information drawn from American Hospital Association data and the Area Resource File.

STUDY DESIGN

We modeled VA enrollees' decision of having private insurance coverage and its impact on use of VA care controlling for sociodemographic information, patients' health status, VA priority status and access to VA and non-VA alternatives. We estimated the true impact of insurance on the use of VA care by teasing out potential selection bias. Bias came from two sources: a security selection effect (sicker enrollees purchase private insurance for extra security and use more VA and non-VA care) and a preference selection effect (VA enrollees who prefer non-VA care may purchase private insurance and use less VA care).

PRINCIPAL FINDINGS

VA enrollees with private insurance coverage were less likely to use VA care. Security selection dominated preference selection and naïve models that did not control for selection effects consistently underestimated the insurance effect.

CONCLUSIONS

Our results indicate that prior research, which has not controlled for insurance selection effects, may have underestimated the potential impact of any private insurance policy change, which may in turn affect VA enrollees' private insurance coverage and consequently their use of VA care. From the decline in private insurance coverage from 1999 to 2002, we projected an increase of 29,400 patients and 158 million dollars for VA health care services.

Predictors of voluntary disenrollment from Medicare managed care

BACKGROUND

Prior research on selection bias in Medicare plans has demonstrated favorable enrollment of healthier beneficiaries, resulting in plan overpayment. However, total selection bias depends not only on who enrolls, but also on who disenrolls. Few studies examine selectivity in disenrollment; it is unclear how those who leave plans differ from those who remain.

OBJECTIVE

The examination of health status and plan characteristics as potential predictors of voluntary disenrollment from Medicare managed care.

RESEARCH DESIGN

Baseline data on health of Medicare managed care enrollees are from the 1998 Medicare Health Outcomes Survey, merged with data on enrollment status and plan characteristics. Beneficiary voluntary disenrollment, versus continuous enrollment, 24 months after completing the survey was modeled as a function of perceived health in 1998 and plan characteristics. The sample included 109,882 community-dwelling elderly.

RESULTS

Between 1998 and 2000, 24% of Medicare managed care enrollees voluntarily disenrolled from plans. Poor perceived physical and mental health significantly increased the odds of voluntary disenrollment. Odds of disenrollment were higher for members of plans that increased premiums and had low market share between 1998 and 2000. Conversely, gaining drug coverage in a plan between 1998 and 2000 lowered the odds of disenrollment (relative to no coverage).

CONCLUSION

Medicare plans experience favorable selection bias partly because sicker members are likelier to disenroll. Plan-level policies that influence market share and benefits, particularly pharmaceutical coverage, also have important effects on disenrollment, regardless of health effects. Understanding both individual and plan influences on disenrollment is critical to benefit coverage and disenrollment restriction ("lock in") policies.

Free choice of health plan combined with risk-adjusted capitation payments: are switchers and new enrolees good risks?

It is well established in the literature that the young and healthy are more inclined to switch health plan, given the opportunity. In countries where risk-adjusted capitation payments are used to create a level playing field for the competing health plans, as is the case in The Netherlands, it is important to determine whether plans could exploit such selective switching to gain unfair advantage. This study analyses whether various risk-adjustment models are capable of compensating adequately for selective switching in the Dutch sickness fund sector. Data concern information on health care expenditures, demographics and indicators of chronic diseases for 10 million members from 21 funds. Results indicate that switchers in 2000-2001 had expenditures that were around 40% below average in 1994-2002, confirming that movers are 'good' risks in absolute terms. However, after taking into account that these people are younger and healthier, the risk-adjusted payments for them nearly equalled actual expenditures. This holds for both people who in fact switched from one fund to another, and for those who were forced by regulation to leave the private insurance sector and who had to choose a sickness fund. Importantly, models using only demographics could not achieve this.

Biased selection within the social health insurance market in Colombia

Reducing the impact of insurance market failures with regulations such as community-rated premiums, standardized benefit packages and open enrolment, yield limited effect because they create room for selection bias. The Colombian social health insurance system started a market approach in 1993 expecting to improve performance of preexisting monopolistic insurance funds by exposing them to competition by new entrants. This paper tests the hypothesis that market failures would lead to biased selection favoring new entrants. Two household surveys are analyzed using Self-Reported Health Status and the presence of chronic conditions as prospective indicators of individual risk. Biased selection is found to take place, leading to adverse selection among incumbents, and favorable selection among new entrants. This pattern is absent in 1997 but is evident in 2003. Given that the two incumbents analyzed are public organizations, the fiscal implications of the findings in terms of government bailouts, are analyzed.

The instrumental variable method to study self-selection mechanism: a case of influenza vaccination

OBJECTIVE

To assess whether estimates of the effectiveness of influenza vaccination in reducing rates of hospitalizations and all-cause mortality derived from cross-sectional data could be improved by applying the instrumental variable (IV) method to data representing the community-dwelling elderly population in the United States in order to adjust for self-selection bias.

METHODS

Secondary data analysis, using the 1996-97 Medicare Current Beneficiary Survey data. First, using single-equation probit regressions this study analyzed influenza-related hospitalization and death due to all causes predicted by vaccination status, which was measured by claims or survey data. Second, to adjust for potential self-selection of the vaccine receipt, for example, higher vaccination rates among high-risk individuals, bivariate probit (BVP) models and two-stage least squares (2SLS) models were employed. The IV was having either arthritis or gout.

RESULTS

In single-equation probit models, vaccination appeared to be ineffective or even to increase the probability of adverse outcomes. Based on BVP and 2SLS models, vaccination was demonstrated to be effective in reducing influenza-related hospitalization by at least 31%. The BVP model results implied significant self-selection in the single-equation probit models.

CONCLUSIONS

Adjusting for self-selection, BVP analyses yielded vaccine effectiveness estimates for a nationally representative cross-sectional sample of the community-dwelling elderly population that are consistent with previous estimates based on randomized controlled trials, prospective cohort studies, and meta-analyses. This result suggests that analyses with 2SLS and BVP in particular may be useful for the analysis of observational data regarding prevention in which self-selection is an important potential source of bias.

Trends in the health status of medicare risk contract enrollees

Previous research has found Medicare risk contract enrollees to be healthier than beneficiaries in fee-for-service (FFS). Medicare Current Beneficiary Survey (MCBS) data were used to examine trends in health and functional status measures among risk contract and FFS enrollees from 1991 to 2004. Risk contract enrollees reported better health and functioning, but the differences tended to narrow over time. Most of the differences in trends were observed for functional status measures and institutionalization; differences in trends for perceived health status and prevalence rates of chronic conditions tended to be small or non-existent. The narrowing of functional and health status differences between the risk contract and FFS populations may have implications for payment policy, as well as implications for the role of private health plans in Medicare.

VA-Medicare dual beneficiaries' enrollment in Medicare HMOs: access to VA, availability of HMOs, and favorable selection

This study examined the association between Veterans Administration (VA)-Medicare dual beneficiaries' HMO enrollment and factors including sociodemographics, access/attachment to VA, self-reported health status, and characteristics of Medicare HMO markets. The results showed that availability of Medicare HMOs and less access to VA care were the major predictors of VA-Medicare dual beneficiaries' HMO enrollment. Other significant predictors of HMO enrollment were age (65-69), having no college education, VA priority status (low income; less than 50 percent service disability). There was some evidence of favorable selection measured by self-reported health status. The identified HMO enrollment profile can position VA better in attracting and managing the care of these beneficiaries and in meeting potentially large shifts in their need for VA care if Medicare benefits or policies change markedly.

An analysis of disenrollment from Medicare managed care plans by Medicare beneficiaries with diabetes

RESEARCH OBJECTIVE

The purpose of this work is to determine whether high-cost high-risk Medicare patients with diabetes in managed care plans disenroll more quickly than lower-cost lower-risk Medicare patients with diabetes. If high-cost high-risk patients with diabetes do disenroll more quickly, Medicare managed care plans benefit financially from favorable disenrollment.

STUDY DESIGN

Time in a health maintenance organization (HMO) was modeled using a duration model with the number of months in the HMO as the dependent variable, controlling for censoring. Data were drawn from a representative sample of Medicare patients with diabetes in the FFS sector in 1994. The panel was followed for 4 years, 1995-1998. The sample included all 6839 individuals who enrolled in a Medicare HMO for at least 1 month during the 48-month observation window.

PRINCIPAL FINDINGS

We found a statistically significant negative association between the time in an HMO and pre-enrollment Part B expenditures (beta = -0.00001, t = -4.39) and any Part A expenditures (beta = -0.465, t = -1.98), and 2 of 4 diabetic complications (heart complications: beta = -0.0773, t = -4.61; vision complications beta = -0.2474, t = -1.94). Of the plan characteristics, only the drug benefit variable (beta = 0.151, t = 5.64) had a statistically significant coefficient.

CONCLUSIONS

Overall, our results support the hypothesis that high-cost, high-risk individuals disenroll from Medicare HMOs sooner than lower-cost lower-risk individuals. However, this effect is mitigated by plans offering better prescription drug benefits. We did find some evidence that patients with diabetes with very high pre-enrollment Part A costs may remain longer in HMOs relative to patients with diabetes with lower Part A prior year expenditures.