The commercial health insurance industry in transition.

Abstract

Research Article Health AffairsVol. 6, No. 3 The Commercial Health Insurance Industry in TransitionJon Gabel, Cindy Jajic-Toth, Karen Williams, Sarah Loughran, and Kevin HaughPUBLISHED:Fall 1987No Accesshttps://doi.org/10.1377/hlthaff.6.3.46AboutSectionsView articleView Full TextView PDFPermissions ShareShare onFacebookTwitterLinked InRedditEmail ToolsAdd to favoritesDownload CitationsTrack CitationsPermissions View articleAbstractPrologue:The commercial health insurance industry is a vast enterprise of which health insurance is an important part. The health insurance business, which suffered substantial underwriting losses in the early 1980s because of inflation and its inability to control health costs, was in trouble. More recently, with inflation under firmer control and with some progress on the health cost front, commercial insurers have been struggling with a new challenge: more intense competition among delivery organizations for providing medical care to patients. In this survey of the recent activities of commercial health insurers, Jon Gabel and his research colleagues at the Health Insurance Association of America (HIAA) depict the changing nature of the industry. No longer is Blue Cross and Blue Shield the major competitor. Rather, the nations employers are assuming more of the financial risk of insuring their employees against the economic consequences of illness and are demanding that insurers provide information on medical care utilization. At the same time, commercial insurers are acquiring health maintenance organizations (HMOs), developing preferred provider organizations (PPOs), and subjecting fee-for-service medicine to more stringent forms of utilization review. While insurers are plunging into the business of direct service medical care, to which most of the large carriers are heavily committed, some of the large hospital management companies have entered the insurance business. The track record of insurers and hospital management companies in these new ventures has been less than an unqualified success, according to recent press accounts. Gabel, formerly a senior economist at the National Center for Health Services Research and Health Care Technology Assessment, is associate director of research and policy development at HIAA. Karen Williams is director of this activity at HIAA. Cindyjajich-Toth, Sarah Loughran, and Kevin Haugh are researchers at the association.TOPICSPreferred provider organizationsHealth maintenance organizationsUtilization reviewHealth care providersManaged careMarketsPhysician paymentPrivate health insuranceFee-for-servicePhysicians Loading Comments... Please enable JavaScript to view the comments powered by Disqus. DetailsExhibitsReferencesRelated Article MetricsCitations: Crossref 11 History Published online 1 January 1987 InformationCopyright © by Project HOPE: The People-to-People Health Foundation, Inc.ACKNOWLEDGMENTSThe authors thank Dianne Washington and Margaret Walkover for their research assistance and Alfreda Russell for her excellent secretarial support. We also thank Gregory de Lissovoy, Donna DeSanctis, Dave Llewellyn, Tom Musco, and Thomas Rice for their insights and comments.PDF downloadCited ByThe politics of health and social welfare in the United StatesAgeing International, Vol. 31, No. 2Economies of scale and scope as an explanation of merger and output diversification activities in the health maintenance organization industryJournal of Health Economics, Vol. 15, No. 6Interrogating an accounting-based intervention on three axes: Instrumental, moral and aestheticAccounting, Organizations and Society, Vol. 18, No. 4The Effect of Utilization Review on Hospital Use and Expenditures: A Review of the Literature and an Update on Recent Findings18 August 2016 | Medical Care Review, Vol. 47, No. 3The “Corporatization” of U.S. Hospitals: What Can We Learn from the Nineteenth Century Industrial Experience?1 January 1995 | International Journal of Health Services, Vol. 20, No. 1Market-Based Hospital Pricing DecisionsHospital Topics, Vol. 67, No. 6Hospital Utilization Review: Past Experience, Future DirectionsJournal of Health Politics, Policy and Law, Vol. 13, No. 4The Changing World of Group Health InsuranceJon Gabel, Cindy Jajich-Toth, Gregory de Lissovoy, Thomas Rice, and Howard Cohen24 July 2017 | Health Affairs, Vol. 7, No. 3HMOs in the U.S.A. and Britain: A new prospect for health care?Social Science & Medicine, Vol. 27, No. 4The Regulation of Preferred Provider ArrangementsElizabeth S. Rolph, Paul B. Ginsburg, and Susan D. Hosek24 July 2017 | Health Affairs, Vol. 6, No. 3A Physician's View Of Managed CareLawrence Kahn24 July 2017 | Health Affairs, Vol. 6, No. 3