Incentives for Voluntary Disclosure of Quality Information in HMO Markets |
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| Authors: | Kyoungrae Jung |
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| Institution: | Kyoungrae Jung is at the Department of Health Policy and Administration, The Pennsylvania State University, 604 Ford Building, University Park, PA 16802. The author can be contacted via e-mail: . I am deeply indebted to Roger Feldman for his encouragement and valuable discussions during my dissertation work, from which this article originates. I am also grateful to Bob Town for his insightful comments. I thank the National Committee for Quality Assurance for making its Health Plan and Employer Data Information Set available, and Doug Wholey for sharing his data with me. |
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| Abstract: | This study examines incentives for voluntary disclosure of quality information by health maintenance organizations (HMOs). Economic theory predicts complete voluntary disclosure without mandatory rules. This article introduces plans' selection motives to avoid high-risk consumers as a deterrent of full unraveling; if disclosure is expected to attract high-risk members, plans have incentives to withhold information. The empirical analysis shows that while market unraveling was an important mechanism to bring disclosure, it was not complete, and plans in markets with high-risk consumers were less likely to disclose. This study suggests that market unraveling may not arise if risk selection incentives are prevalent. |
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