Private Payers Serving Individuals with Disabilities and Chronic Conditions. C. How The Study Was Conducted

01/01/2000

Two large employers contributed data for the Private Payers Study. Employer A specializes in communications and electronics, and has offices in 30 cities around the country. Employer B is a large northeastern state government. The data used for this study included (1) health plan enrollment information for members of both employers’ indemnity and managed care plans, and (2) claims-based information on inpatient, outpatient and pharmacy services used in 1995 by persons covered in these managed care and indemnity plans. More information about the employers and their health plans can be found in the next chapter of this report.

One of the challenges addressed by this study was the difficulty of using only health insurance claims or encounter data to identify chronically ill persons who may be disabled. No survey data were available to identify those with functional limitations in our sample. To address this issue, a physician and clinical coding specialist identified ICD-9-CM diagnosis codes that may be associated with chronic, potentially disabling illness. After subsequent review by ASPE staff and some reconsideration of a first draft, over 320 chronic physical and mental health conditions were identified as potentially leading to serious disability. About 30 additional illnesses were identified as potentially disabling if coupled with high service use. Chapter 3 describes in more detail the process used to identify persons with these conditions.

After we identified chronically ill and potentially disabled persons in the inpatient and outpatient data bases provided by the two employers for this study, we compared the demographic characteristics, case mix, and service use of this group according to their type of coverage. For purposes of this study, managed care refers to health maintenance organizations (HMOs), point of service (POS) plans, and preferred provider organizations (PPOs). The characteristics of these plans are described in Chapter 2. Potentially disabled persons with chronic illnesses who were covered by these plan types were compared to similar persons in the indemnity plans offered by each employer. Chapter 5 presents the descriptive results of these comparisons.

Simple comparisons of demographics, case mix, and service use were supplemented with multiple regression analyses designed to estimate the impact of managed care coverage on service use and health care expenditures, controlling for other factors that may also affect utilization and expenditures. We present the managed care impact estimates in Chapter 6.

Finally, we investigated the application of risk adjustment methods for persons with potentially disabling chronic illnesses. These regression analyses were designed to estimate how much more of the variation in health care expenditures could be accounted for by different methods of measuring the case mix of the group of potentially disabled persons. We conducted separate risk adjustment analyses for physical health problems and mental health problems. The results of these analyses are described in Chapter 7 and Chapter 8, respectively.

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