HMO Enrollment Not Affected by ‘Backlash’ in Late 1990s, Study Finds

Most consumers in the late 1990s did not end participation in HMOs, despite a "backlash" over restrictions on health care, according to a new RAND study, the San Francisco Chronicle reports. According to the study, HMO enrollment between 1998 and 2001 decreased by 0.4% nationwide but increased by 3.8% in western states. HMO enrollment among residents of western states with health insurance increased from 36.9% in 1994 to 57.1% in 2001, the study found.

Researchers attributed the increase in HMO enrollment in western states to large HMOs, such as Kaiser Permanente, which "have had a strong presence for decades," the Chronicle reports. Most economists "generally agree tightfisted managed care policies helped keep costs under control for several years," but, in response to consumer criticism, many HMOs in the late 1990s began to implement less-restrictive policies, to which some experts attribute the increase in health care costs in recent years, the Chronicle reports.

Susan Marquis, an author of the study, said, "Even though there was talk about all this backlash, people didn't respond to that by leaving HMOs. Consumer pressure was enough to get HMOs to relax their tight management." She added that HMOs "didn't want to lose market share and they responded by allowing greater flexibility and allowing more choice. Whether this in the long run will allow them to continue to manage costs ... remains to be seen" (Colliver, San Francisco Chronicle, 3/26). An abstract of the study is available online.