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Health Serv Res. 1993 Dec;28(5):563-75.

Selection in a preferred provider organization enrollment.

Author information

1
Department of Internal Medicine, University of Michigan Medical School.

Abstract

OBJECTIVE:

The study was conducted to determine whether favorable or adverse selection occurred in a preferred provider organization (PPO) enrollment.

DATA SOURCES AND STUDY SETTING:

Secondary data sources were used to conduct a retrospective study of the utilization of health services and the demographic characteristics of the population involved in the first open enrollment in a new university-based PPO. The PPO under study, sponsored by the University of Michigan (UM) Medical Center, was offered to all 43,005 UM employees, dependents, and retirees.

STUDY DESIGN:

We analyzed insurance company payments during the one-year period prior to the enrollment to compare the utilization patterns of those who enrolled in the PPO with those who did not.

DATA COLLECTION:

Prior health care utilization data were obtained from Blue Cross-Blue Shield of Michigan on the entire university population for one year prior to the start of the PPO. Demographic data were obtained from the personnel office of the university.

PRINCIPAL FINDINGS:

The PPO group had a younger median age than the non-PPO group; the sex distribution was roughly similar for the two groups. In the PPO group 57 percent of all contracts were family contracts compared with only 30 percent in the non-PPO group. The PPO group experienced 20.6 percent lower inpatient payments per member, and 9.4 percent lower outpatient payments per member in the year prior to the enrollment. These differences resulted in an overall 18.7 percent lower payment per member for the PPO group in the year prior to their enrollment.

CONCLUSIONS:

The results show, based on prior insurance payments, that this PPO received favorable selection during the open enrollment, a finding consistent with favorable selection found in early HMO enrollment.

PMID:
8270421
PMCID:
PMC1069964
[Indexed for MEDLINE]
Free PMC Article
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