Patient Selection in a Competitive Health Care System

Abstract

Prologue: During the 1980s, as alternative medical care delivery systems have proliferated and nonprofit and commercial health insurance carriers have competed to remain viable enterprises, the insurance market has splintered into an array of new choices. As this more competitive environment has evolved, one increasingly important development in the health policy realm is how insurers select patients. Patients deemed high medical risks obviously cost considerably more than patients with fewer maladies. Within this context, it has become clear that as health insurers grow ever less willing to cross-subsidize hospital expenditures that are not otherwise covered—that is, indigent care and graduate medical education expenses—patient selection becomes a paramount concern of provider and payer alike. In this article, Harold Luft and Robert Miller examine the multitude of issues that arise around the subject of patient selection. Luft holds a doctorate in economics from Harvard University and also took a postdoc...