Evidence for selective health maintenance organization enrollment among children and adolescents covered by Medicaid.

OBJECTIVE

To determine whether children and adolescents are selectively enrolled in health maintenance organizations (HMOs) based on age, gender, diagnosis, or prior utilization.

DESIGN

Case-control study. New HMO enrollees were compared with a control population of non-HMO enrollees.

SETTING

Medicaid claims data and HMO participation records for the Medicaid and Aid to Families of Dependent Children sector in Baltimore, Md.

RESULTS

Controlling for age, significant differences in prior health care utilization as measured by Medicaid expenditures and hospital days were noted. Children enrolling in HMOs had significantly lower prior utilization than children from the control population as measured by dollar expenditures and hospital days. Young children enrolling in HMOs were only half as likely to have prior claims for asthma. Conversely, adolescents enrolling in HMOs had significantly higher prior utilization than adolescents from the control population. The difference among adolescents was due to a higher birth rate among new HMO enrollees in that age bracket.

CONCLUSIONS

Voluntary HMO enrollment of children covered by Medicaid and Aid to Families of Dependent Children sector was subject to selection biases that may be economically favorable to the HMOs and may undermine the cost-containment goals of prepaid health care for Medicaid participants. Voluntary capitated systems where fee-for-service remains a significant alternative must monitor for these selection biases that are not allowed for in the adjustments to capitation rates.