The goal of this project is to examine how the release of health plan performance information influences employee health plan choices. Belief in the importance of information in today's health insurance marketplace has led to the development and dissemination of health plan report cards by employers, the media, and consumer advocacy organizations. These report cards attempt to measure plan performance along with various dimensions and are often based on the Health Plan Employer Data and Information Set (HEDIS). This analysis will be based on the health plan choices of employees of General Motor Corporation (GM) for two open enrollment periods and will exploit two sources of variation to identify the impact of information on plan choice. First, health plan choices are observed both before and after the firm leased HEDIS based plan performance ratings to non-union employees. Second, the behavior of union employees, who were not given such information, will be used to control for other factors that may have changed and affected health plan choice. Four specific research questions will be addressed. 1. Does the release of report card ratings alter enrollment in plans? If so, along which dimensions of performance. How influential are report card ratings relative to other factors, such as out-of-pocket price, that might influence plan choice? 2. Does the age of the employee affect the degree to which they are influenced by the release of report card ratings? 3. Are newly hired employees, faced with this particular set of choices for the first time, more influenced by the report card ratings? 4. To what extent do high HMO performance ratings influence individuals to switch from FFS or preferred provider plans to HMOs? Conditional and nested logit models will be estimated as well as marked share regressions, based on aggregate data, which are appropriate in unobserved plan attributes are important determinants of plan choice. Each of these methods account for the different set of choices that each employee faces. They also model the health plan choice for each employee as a function of the attributes of all plans from which employees could choose. This is important because it is the relative price and quality, not the absolute price and quality, that influence choice.
