Health Plan Switching in Anticipation of Increased Medical Care Utilization

Abstract
We compare rates and days of maternity and nonmaternity hospital admission for the years 1981 through 1984 for three groups of employees and dependents from a large private employer: those continuously enrolled in a fee-forservice (FFS) plan (N=147,700), those continuously enrolled in a health maintenance organization (HMO) (N=30,957), and those switching from the FFS plan to the HMO (N=2,144). The rate of maternity admissions for plan switchers increased by 106%(P<0.001) in the post-switch year compared with the pre-switch year, while maternity rates for continuing FFS-plan enrollees declined by 12%(P<0.001) and rates for continuing HMO enrollees remained unchanged. Nonmaternity admission rates for switchers decreased by 19%(P=0.079),consistent with the expectation that HMOs reduce these rates substantially, while rates for FFS-plan stayers increased 4%(P<0.001) and those for HMO stayers remained unchanged. We conclude that employees often switch health plans when anticipating increased needs for maternity care and therefore that pre-switch rates of utilization are unreliable measures of the true magnitude of risk selection between HMOs and FFS plans.