MANAGED CARE AND HEALTH CARE MARKETS

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This project addresses concerns about quality of health care prompted by the growth of managed care. It proposes to do so by developing the largest and most advanced collection of managed care measures in the country and then by using these measures in two important applications. The project thus has three parts: (1) improving the measurement of managed care activity in markets by compiling new measures and applying new techniques to construct more precise measures of managed care, (2) examining the impact of the growth of managed care on the performance of health care markets, including study of specific measures of care for patients and outcomes, and (3) assessing the impact of legislative and regulatory determinants of managed care growth. The project will advance the state of managed care measurement and will produce specific, quantitative evidence about the effects of managed care on health care markets and about the effects of specific policies on managed care. Doing so will help policy-makers, public and private purchasers, managers, and other health care leaders to assess managed care policy options. Our aims include: 1. To compile and evaluate a wide range of measures of managed care activity. These will include data on the prevalence and market share of various plan types, data on the specific cost-reducing activities of plans like restrictions on provider choice, capitation, and utilization management, and data on competition between plans. 2. To synthesize existing measures to develop new, more precise, measures of HMO activity specifically, and managed care activity more broadly. We will specifically focus on developing measures that are valid over time. 3. To examine the effects of growth in managed care and competition among health plans on treatments, costs, and health outcomes for patients, including both those enrolled in managed care plans and those not enrolled. 4. To study the factors that determine the growth of managed care, particularly managed care regulations, including any willing provider laws, freedom of choice laws, mandated benefits, grievance procedure laws, liability laws that expand the rights of patients to sue managed care plans, and medical necessity definitions.