Changes in benefit payments and health insurance premiums among firms switching health insurance carriers.
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Employer-purchased group health insurance is a major source of funding in the US healthcare system, accounting for approximately one third of each healthcare dollar spent. Surprisingly, little is known about employers' behavior in purchasing health insurance or the circumstances leading employers to switch health insurance carriers. We descriptively analyzed data for a cohort of 95 insured groups between 1985 and 1991 to determine the frequency with which employers switch health insurance carriers and the growth pattern in premiums and benefit payments before the switch was made. Thirty-seven percent of groups switched carriers during the study period, with at least five groups switching each year from 1987 through 1991. The groups that switched insurance carriers experienced higher average annual rates of growth in benefit payments than those that did not switch (18% versus 11%). Groups that switched did not have significantly higher observed premium growth rates than those that did not switch, suggesting that employers decided to switch insurers before absorbing an increase in premiums. However, some firms that switched experienced below average increases in both benefit payments and premiums, indicating that premiums and anticipated premium increases are not solely responsible for the decision to switch health insurance carriers. (+info)
Nonprofit to for-profit conversions by hospitals, health insurers, and health plans.
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Conversion of hospitals, health insurers, and health plans from nonprofit to for-profit ownership has become a focus of national debate. The author examines why nonprofit ownership has been dominant in the US health system and assesses the strength of the argument that nonprofits provide community benefits that would be threatened by for-profit conversion. The author concludes that many of the specific community benefits offered by nonprofits, such as care for the poor, could be maintained or replaced by adequate funding of public programs and that quality and fairness in treatment can be better assured through clear standards of care and adequate monitoring systems. As health care becomes increasingly commercialized, the most difficult parts of nonprofits' historic mission to preserve are the community orientation, leadership role, and innovation that nonprofit hospitals and health plans have provided out of their commitment to a community beyond those to whom they sell services. (+info)
Employer-sponsored health insurance: are employers good agents for their employees?
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Employers in the United States provide many welfare-type benefits, such as life insurance, disability insurance, health insurance, and pensions, to their employees. Employers can be viewed as performing an agency role in purchasing pension, health, and other welfare benefits for their employees. An exploration of their competence in this role as agents for their employees indicates that large employers are very helpful to their employees in this arena. They seem to contribute to individual employees' welfare by providing them with valued services in purchasing health insurance. (+info)
The role of independent agents in the success of health insurance market reforms.
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The impact of reforms on the health insurance markets cannot be understood without more information about the role played by insurance agents and a closer analysis of their contribution. An in-depth, qualitative study of insurance-market reforms in seven illustrative states forms the basis for this report on how agents help to shape the efficiency and fairness of insurance markets. Different types of agents relate to insurers in their own ways and are compensated differently. This study shows agents to be almost uniformly enthusiastic about guaranteed-issue requirements and other components of market reforms. Although insurers devise strategies for manipulating agents in order to avoid undesirable business, these opportunities are limited and do not appear to be seriously undermining the effectiveness of market reforms. Despite the layer of cost that agents add to the system, they play an important role in making market reforms work, and they fill essential information and service functions for which many purchasers have no ready substitute. (+info)
Controlling the cost of dental care.
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Methods for controlling dental care expenditures are taking on greater importance with the rapid increase in prepaid dental plans. The use of regulatory systems to monitor provider performance are necessary to prevent gross over-utilization but are unlikely to result in net savings of more than five per cent of total gross premiums. Theoretically, prepaid group dental practice (PGDP) may reduce expenditures by changing the mix of services patients receive. The modest estimated savings and the small number of PGDPs presently in operation limit the importance of this alternative for the next five to ten years. If substantial reductions in dental expenditures are to be obtained, it will be necessary to limit dental insurance plans to cover only those services which have demonstrated cost-effectiveness in improving health for the majority of people. The concept that richer benefit plans may have small marginal effects on improving oral health may not be easy for the public to accept but, until they do, expenditures for dental care will be difficult to control. (+info)
Reinsurance of health insurance for the informal sector.
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Deficient financing of health services in low-income countries and the absence of universal insurance coverage leaves most of the informal sector in medical indigence, because people cannot assume the financial consequences of illness. The role of communities in solving this problem has been recognized, and many initiatives are under way. However, community financing is rarely structured as health insurance. Communities that pool risks (or offer insurance) have been described as micro-insurance units. The sources of their financial instability and the options for stabilization are explained. Field data from Uganda and the Philippines, as well as simulated situations, are used to examine the arguments. The article focuses on risk transfer from micro-insurance units to reinsurance. The main insight of the study is that when the financial results of micro-insurance units can be estimated, they can enter reinsurance treaties and be stabilized from the first year. The second insight is that the reinsurance pool may require several years of operation before reaching cost neutrality. (+info)
Why insurers should reimburse for compression stockings in patients with chronic venous stasis.
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BACKGROUND: Chronic venous stasis ulcers produce substantial morbidity rates and result in a significant expense to society. Fortunately, compression stockings (CS) have been found to reduce the rate of recurrence in patients with previous ulceration. Surprisingly, Medicare and other insurers do not reimburse the expense associated with CS or with patient education (Ed), which is essential to ensure compliance. METHODS: A Markov decision analysis model was used for analysis of the cost-effectiveness of a strategy of reimbursement for CS and Ed (prophylaxis) versus one that does not supply these resources in a 55-year-old patient with prior venous stasis ulceration. The mean time to ulcer recurrence (53 months with CS+Ed; 18.7 months without prophylaxis), the mean time for ulcer healing (4.6 months), the probabilities of hospitalization (12%) and amputation (0.4%) after the development of an ulcer, and quality-adjustment factors (0.80 during ulcer treatment) were derived from the literature. The cost of CS ($300/year) and Ed ($93 for initial evaluation; $58/year; $40/recurrence) and the medical cost of ulcer treatment (average cost, $1621/recurrence) were calculated from our hospital cost accounting system. RESULTS: A strategy of CS and Ed was cost saving, with 0.37 quality-adjusted life years and $5904 saved, compared with a strategy that does not provide these resources. The inclusion of loss of revenue related to absence from work in the analysis increased cost savings to $17,080 during the patient's lifetime. With sensitivity analysis, CS and Ed remained cost-effective (lifetime cost per quality-adjusted life year saved, <$60,000) if amputations and the cost of ulcer treatment were eliminated or if the cost of prophylaxis was increased to 600% of the base-case. The mean time to recurrence in patients with CS and Ed needed to be reduced from 53 months to 21.1 months before this strategy was no longer cost-effective. CONCLUSION: Prophylactic CS and Ed in patients with prior venous stasis ulceration are cost saving, even with the most conservative of assumptions. Insurers should routinely reimburse for these interventions. (+info)
Professionalism, regulation, and the market: impact on accountability for quality of care.
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This paper examines the interplay of professionalism, regulation, and the market in shaping accountability on the part of hospitals, physicians, and health plans. We pay particular attention to the role of accreditation. We review the development of accountability and examine its recent evolution in the context of changing information technology, consumer demands, the decline of the staff- and group-model HMO, and the reemergence of health care cost inflation. The market is emerging as the dominant influence on accountability; this development will require changes in the roles and structure of regulation, professionalism, and accreditation in assuring accountability. (+info)