Membership duration and utilization rates in a prepaid group practice.

The relationship between utilization rates and duration of membership in prepaid group practices can have important implications for national policy and HMO administration. The results of this study demonstrate a substantial reduction in utilization rates with increasing duration of membership over a 5-year period in a developing prepaid group practice (PGP) located in urban St. Louis. This "start-up effect" is strongly evident across different socioeconomic subgroupings of the study population (sex, race, income, education and age) and for different employers and cohorts. The implications of widespread start-ups for health care financing policy and for important PGP management decisions are discussed, and suggestions are made for future study of the start-up phenomenon.