Private Payers Serving Individuals with Disabilities and Chronic Conditions. NOTES

  1. ICD-9-CM is the International Classification of Diseases, 9th Revision, Clinical Modification. It is required for reported diagnoses and diseases to all Health Care Financing Administration programs.

  2. More information about the potential tradeoffs can be found in Chapter 2 of this report, which notes the benefits offered and various coverage provisions and rules of conduct for those in the indemnity and managed care plans.

  3. This table and all of the following tables and figures exclude information about Employer B's PPO plan. The PPO samples were often very small, resulting in estimates that were not robust. Detailed data about PPO members can be found in Appendix B.

  4. Readers interested in learning more about plan switching have at least two sources for further reading. Chapter 6 of this report provides an in-depth analysis of switching among the plans of Employers A and B. Cutler and Zeckhauser(1998) also present a discussion of plan switching, using the experiences of two plans to illustrate how switching, if ignored, can lead to a “death spiral” in which high-cost plans lose so many healthy enrollees that they become unprofitable and eventually cease operation altogether.

  5. Note that Employer A has no offices in the areas where Employer B is located. Thus, the issue raised here about benefit coverage is not meant in the spirit of comparing benefits between Employers A and B. Our hypothesis is merely that Employer B may offer better coverage than competing employers in the same state, thereby attracting a higher percentage of people with potentially disabling chronic conditions than those other employers, and perhaps a higher percentage than Employer A as well.

  6. Median expenditures (versus mean or average expenditures) are probably more indicative of the middle of teh expenditure distributions because the median is less sensitive to unusually high values. Since in this section of the Chapter we do not adjust the means for differences in patient characteristics, we focus on a comparison of median expenditures across the plans.

  7. The authors are affiliated with The MEDSTAT Group (Mark, Ozminkowski), UCLA Department of Medicine (Ettner), and the Office of the Assistant Secretary for Planning and Evaluation, HHS (Drabek).

  8. For technical details on the creation of ACGs and ADGs, see Johns Hopkins University (1999).

  9. In contrast, the Principal In-Patient DCG model (PIP-DCG), being implemented by the Health Care Financing Administration in the Medicare Plus Choice program, uses only inpatient data to classify patients.

  10. The authors are affiliated with UCLA Department of Medicine (Ettner), Harvard Medical School (Frank), and The MEDSTAT Group (Mark, Smith).

  11. These treatment patterns included inpatient episodes or use of therapies reserved for severe and refractory illness, such as electroconvulsive therapy for depression.

  12. For technical details of the estimation methods, see Ettneret al. (forthcoming).


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