Why do so few HMOs offer Medicare risk plans in rural areas?

Part of a special section on delivery and financing issues in access to health care services in rural areas of the U.S. A study was conducted to determine the extent to which health maintenance organizations (HMOs) provide services to Medicare beneficiaries in rural areas. The findings revealed th...

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Bibliographic Details
Published in:Health Care Financing Review Vol. 17; pp. 85 - 98
Main Authors: Serrato, Carl, Brown, Randall S., Bergeron, Jaeanette
Format: Article
Published: HCFA ORDS Publications Fall 1995
Subjects:
Online Access:View this record in EBSCOhost
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      aug:
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          Serrato, Carl
          Brown, Randall S.
          Bergeron, Jaeanette
      su:
        Health maintenance organizations
        Medicare
        Rural health services
        United States
      sug:
        subj:
          United States
          Health maintenance organizations
          Medicare
          Rural health services
      ab: Part of a special section on delivery and financing issues in access to health care services in rural areas of the U.S. A study was conducted to determine the extent to which health maintenance organizations (HMOs) provide services to Medicare beneficiaries in rural areas. The findings revealed that only 17 of the 38 HMOs that have Medicare risk contracts and provide coverage to commercial clients in rural counties include the rural counties in their Medicare plan service areas. The rural counties in which HMOs offer Medicare coverage have higher adjusted average per capita costs (AAPCCs), bigger populations, and a greater number of physicians per capita than do those rural counties that are excluded from the Medicare risk plans. Interviews with HMOs revealed that low and erratic AAPCCs, scarcity of potential enrollees, lack of negotiating power with physicians, and adverse selection were the main disadvantages to initiating the Medicare plan in rural areas.
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    language: English
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