Private Payers Serving Individuals with Disabilities and Chronic Conditions. C. Methods Overview


In this chapter, we address the questions above through a descriptive profile of chronically ill people in the indemnity and managed care plans offered by two large employers. The profiles include:

  • disability prevalence estimates for the employee population,
  • demographic characteristics of those who used services,
  • inpatient case mix,
  • outpatient case mix, and
  • expenditures of those who used services.

These measures were calculated separately for each plan type to facilitate comparisons between those in indemnity plans and those in managed care plans. We also study individuals in each plan type separately from those who switched plan types from 1994 to 1995 because switching may denote dissatisfaction with premiums, out-of-pocket costs, coverage, perceived access to care, quality of care, or other plan features that cannot be measured directly. Those who remain in the same plan type over time may be less concerned about these issues, or they may be more savvyabout using managed care services to obtain the care they want. In some instances, managed care may involve a tradeoff between access to particular providers versus much lower out-of-pocket costs or better benefits.2 We put all people who switch plans into a single category, not because they are a uniform group but because doing so allows us to define a clean group of stayers--people who stayed with the same plan over both years--versus those who did not. The characteristics and types of plan switchers are discussed in Chapter 6.

We also present data separately for three groups of insured people: children under age 18, active employees, and early retirees. Stratifying by age group is important because, as shown below, the groups have different rates of potentially disabling chronic illness. Moreover, some of these conditions are defined for children only, and the frequency of the remaining conditions varies across age groups.

For these analyses, the data come from two employers. Employer A is a large firm with offices in over 30 cities across the United States. Each location offers an indemnity plan and a POS managed care plan. The benefits offered in these plans are the same across locations, although the POS plan requires lower copayments and deductibles and offers a wider array of preventive services than does the indemnity plan. Employer B is a large state government that offers an indemnity plan, a PPO plan, and seven HMO plans. Like Employer A, its indemnity plan charges higher copayments and deductibles than the managed care plans but makes no restrictions on out-of-network coverage. Chapter 2 describes the features of the plans offered by Employer A and Employer B.

Our statistical analyses used chi-squared tests of independence for comparing variables measured as percentages. We used analysis of variance (ANOVA) to compare means of continuous measures. No other adjustments were made in comparisons, since the purpose of this chapter is to present a global view of descriptive characteristics of those who have potentially disabling chronic conditions. As a result, we do not draw inferences about causality in this chapter. Readers should not assume that differences between those in the indemnity and managed care plans are due to plan design or to treatment practice patterns. Rather, the descriptive statistics constitute a first look at the data, providing an overview of the data and suggesting areas for detailed examination. More sophisticated analyses are presented in Chapter 6, which addresses whether managed care influences health care utilization and expenditure patterns.

View full report


"privpay.pdf" (pdf, 3.64Mb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®