Private Payers Serving Individuals with Disabilities and Chronic Conditions. F. Conclusions


Our descriptive analyses highlighted several facts about chronic illness among the two large employers we studied. Despite substantial differences in size and the nature of their work and some differences in prevalence rates for chronic conditions, the types of chronic conditions most prevalent in each employer heavily overlapped.

We found some notable differences across plan types, although frequently the patterns differed by employer. Active employees and early retirees enrolled in managed care plans were younger on average than those in indemnity plans for both employers. As expected, people in HMOs tended to have fewer physical conditions than those in indemnity plans. The results were reversed for psychiatric conditions, however. We found a higher number of psychiatric diagnostic groups among managed care service users than among service users in indemnity plans. Expenditure patterns were also mixed. Expenses were highest among Employer A's adults in the managed care (POS) plan, while they were highest in the indemnity plan for Employer B. Utilization differed across plan types but inconsistently by employer.

The comparisons generated here should be viewed in the context of the way data were collected. Some studies have been conducted in the past to identify disabled people using survey data that included information on functional limitations and perceived health status. In this study it was not feasible to conduct surveys of the two employers' insured populations to obtain information on health and functional status. Our use of health claims and encounter information to identify those with potentially disabling chronic conditions meant that many comparisons relied on the population who used services within the study period. This limitation precludes comparisons to healthy nonusers of services as well as to people with chronic illnesses who did not use any services in the study year.

In the health plans studied here, approximately 25 percent of those with potentially disabling chronic conditions used no health care services in 1995. (These people were identified as potentially disabled based on their 1994 service use and continued enrollment in the health plans.) It may be useful in subsequent studies to identify and survey service users and nonusers among those who have potentially disabling chronic conditions, to obtain more information about the changing need for medical care. Learning when services are most needed during the course of a chronic condition and learning more about the reasons people choose to use health care services may help providers and administrators plan efforts to better meet the needs of those with chronic conditions. The results of such studies may also help educate those with chronic conditions to better manage their own care.

Descriptive studies often raise more questions than they answer. The findings presented in this chapter raise a number of questions:

  • Why do some people with chronic conditions seek or use care while others do not? Is this pattern due to the natural course of illness, cultural factors, socioeconomic characteristics, or plan policies that either facilitate or impinge upon access to services?

  • What characteristics of plan design are most favorable to people with potentially disabling chronic conditions? Are these factors major determinants of the prevalence differences noted here?

  • How would estimates of the prevalence of people with potentially disabling chronic conditions vary if survey data were used to enhance the claims-based data used here for identifying such people?

  • Why do people switch health plans? Is the switching rate similar for those with and without chronic conditions?

  • Managed care is often viewed as a binary (yes or no) occurrence, but in reality there are degrees of management in virtually all plan types. Which particular features of managed care are more appropriate and beneficial for those with potentially disabling chronic conditions? How may providers manage care and manage the cost of treating patients at the same time?

  • Do utilization and expenditure differences between managed care and indemnity plans remain once controls are made for the likelihood of choosing each plan type?

  • What financial incentives exist for plans to avoid or accept people with potentially disabling chronic conditions? Can these be ameliorated by appropriate payment or rate-setting mechanisms.

Answers to these questions will contribute to our understanding of how well managed care serves the needs of people with potentially disabling chronic conditions. In subsequent chapters of this report, we address the last two questions. In Chapter 6 we analyze people with chronic illness who switch plans. Our goal is to determine how personal and plan characteristics determined their move and whether the evidence is consistent with well-known forms of strategic behavior on the part of individuals and insurance firms. In later chapters we apply competing risk-adjustment methods to these data, to determine how well such models predict expenditures by people with selected chronic conditions. Answers to the other questions would require survey data that were not available for this study.

Although not exhaustive, our findings constitute a significant contribution to publicly available information on health care for people with potentially disabling chronic conditions. They also suggest what additional information, from surveys or medical claims, will be necessary in order to learn more about how managed care can best serve people with potentially disabling chronic conditions.

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