Targeting Medicare consumers. Managed care providers can make inroads by understanding preference and cost-sensitivity issues.

The authors' conjoint study provided valuable information on the preferences of the hugh Medicare-eligible and soon-to-be-eligible markets. Leading the list were hospitalization coverage, skilled nursing facilities, and out-of-area coverage. The task of defining choice sets was made easier and more meaningful by selecting the top six attributes for each respondent. Asking respondents to rank levels within each attribute and assessing the importance of the various levels provided a more robust estimate of consumer preferences. Using an innovative price-sensitivity method preserved the integrity of the data. The method minimized respondent fatigue and enabled the authors to gather price-sensitivity data from respondents who were not actually paying for their health services. Respondents preferred Supplemental F and Medicare products even though they placed more value on the qualities of alternative health care products. This suggests that managed care providers need to change consumer perceptions about their products.