December 16, 2004 - States often serve as natural laboratories for testing new initiatives or changes in health policy. Three articles in the fall issue of INQUIRY examine different issues – expanding health insurance for low-income adults, potential biases in telephone health insurance surveys, and annual open enrollment in Medigap plans – based on analyses that used states as the testing ground.

“MassHealth Succeeds in Expanding Coverage for Adults,” by Sharon K. Long and Stephen Zuckerman – This study by researchers at the Urban Institute found clear evidence that MassHealth, an effort instituted in the late 1990s by Massachusetts to provide insurance coverage to its entire low-income population, reduced the number of uninsured adults in the state compared to similar populations in other states. The demonstration project, which included both expanded eligibility for public programs and premium assistance for low-income workers, was among the most ambitious in the country in terms of its high income-eligibility ceilings and the comprehensive nature of the benefits provided. Current budget shortfalls have forced Massachusetts – and other states – to scale back their insurance expansion programs. However, the authors note, “understanding the impacts of the ambitious expansion efforts in Massachusetts adds to the base of knowledge that will be critical for guiding states when the economy recovers and resources needed for expanding coverage again become available.”

“Telephone Service Interruption Weighting Adjustments for State Health Insurance Surveys,” by Michael Davern, James Lepkowski, Kathleen Thiede Call, Noreen Arnold, Tracy L. Johnson, Karen Goldsteen, April Todd-Malmlov, and Lynn A. Blewett – This study, by a team of researchers from the University of Minnesota, evaluated a statistical strategy for addressing the potential bias that can occur when states use telephone surveys to produce estimates of people without health insurance. Bias may arise because such surveys miss people in households without telephones or with an interruption in telephone service; although only 5% of the U.S. population lives in households without telephones, 11% of the nation’s uninsured reside in these households. Comparing health insurance data from telephone surveys in four states – Colorado, Minnesota, West Virginia and Wisconsin -- to data in the Current Population Survey, the researchers concluded that it is effective to apply a telephone-adjusted survey weight (TASW) to address the noncoverage bias. Although they found only small differences in the uninsurance rate before and after employing the TASW, they say “making adjustments for lack of a telephone is important for promoting the legitimacy and credibility of the state surveys of health insurance coverage.”

“Does Open Enrollment Control Premiums? A Case Study from the ‘Medigap’ Market,” by Thomas Rice, Katherine A. Desmond, and Peter D. Fox – This analysis concluded that a 1999 change in Missouri’s “Medigap” regulations, aimed at enhancing competition in the Medigap market, had little effect on the premiums charged by carriers. The Missouri legislation liberalized open enrollment by allowing Medicare beneficiaries to switch to a different insurance carrier each year, provided they retained the same type of policy. (Most states allow open enrollment only during the first six months after a person turns 65 and initially enrolls in Medicare.) The case study compared Missouri’s outcomes to those in two other states – Kansas and Florida. Despite the findings on premiums, the authors say other states still might find Missouri’s change attractive because it had other desirable aspects. With greater freedom to change Medigap policies, seniors were less likely to feel locked into a policy they considered too expensive, they had protection against rising premiums and carriers’ behavior was kept in check.

The Fall 2004 issue also takes a look at for-profit plans versus nonprofit plans:

“The Failed Conversion of CareFirst BlueCross BlueShield to For-Profit Status: Part I, The Whole Story,” by Bruce McPherson – available free at http://www.inquiryjournalonline.org/inqronline/?request=get-document&issn=0046-9580&volume=041&issue=03&page=0245. This article analyzes in detail the failed attempt by CareFirst, a nonprofit health insurer in Maryland, to convert to for-profit status and be acquired by the for-profit company, Wellpoint Health Networks, Inc. The second part, which describes the lessons gained from the failed conversion, will appear in INQUIRY’s winter issue.

“The Effects of HMO Ownership on Hospital Costs and Revenues: Is There a Difference Between For-Profit and Nonprofit Plans?” by Yu-Chu Shen and Glenn Melnick – available free at http://www.inquiryjournalonline.org/inqronline/?request=get-document&issn=0046-9580&volume=041&issue=03&page=0255. This study found that hospitals in urban areas with high rates of HMO market share penetration experienced revenue and cost growth rates that were, respectively, 21 and 18 percentage points below hospitals in areas with low HMO penetration. Also, conditional on overall HMO penetration levels, hospitals in urban areas with high for-profit HMO penetration saw revenue and cost growth rates 10 percentage points below hospitals in comparable areas with low for-profit penetration; the difference was especially evident in areas with high HMO penetration.

Abstracts and full text of the previous articles are available to reporters and INQUIRY subscribers at www.inquiryjournal.org.

Also on the Web site are these other papers from the Fall 2004 issue:

“The View From Here: Common Ground and Common Values,” by INQUIRY Editor Katherine Swartz – available free at http://www.inquiryjournalonline.org/inqronline/?request=get-document&issn=0046-9580&volume=041&issue=03&page=0243. This post-election editorial discusses “moral values” in relation to health policy challenges and the role of government in distributing resources and regulating markets to prevent fraud.

“Doing the Same and Earning Less: Male and Female Physicians in a New Medical Specialty,” by Timothy J. Hoff – This study reports findings from a national survey of physicians in the field of hospital medicine. It finds that female hospitalists earn significantly less than their male counterparts despite similar work schedules and commitments; that these outcomes remain even for male and female hospitalists who are married and have children; and that female hospitalists maintain positive feelings toward their careers despite assuming multiple work and nonwork roles.

“Does Capitation Matter? Impacts on Access, Use, and Quality,” by Samuel H. Zuvekas and Steven C. Hill – This study finds that providers’ organization as a group/staff HMO has a greater impact on health care access and quality than provider capitation. In particular, group/staff HMOs appear to substantially increase office hours but decrease coordination of care.

“Using Encounter Data from Medicaid HMOs for Research and Monitoring,” by Merrile Sing – This study analyzed 1996 and 1997 encounter data – records of health care use reflecting providers’ encounters with patients – from TennCare, Tennessee’s Medicaid program, and found them to be incomplete despite earlier reviews that found them otherwise. Accurate and complete encounter data are necessary for quality improvement and administration of Medicaid managed care, the author states. Although Tennessee’s early experience suggests caution, a follow-up commentary notes that states today have more experience in collecting and reviewing encounter data.

INQUIRY is a peer-reviewed scholarly publication. Now in its 42nd year, it is published quarterly by Excellus Health Plan, Inc. Press releases and article abstracts are available at www.inquiryjournal.org.