The Use of Pathology Services

A Comparison of Fee-for-Service and A Prepaid Group Practice

by Willard G. Manning


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This study examines the Health Maintenance Organization (HMO) vs. fee-for-service issues using data on the use of pathology services from a randomized controlled trial in health insurance, the RAND Health Insurance Study. The report compares the utilization of pathology services in three insurance plans with free care. One plan is a free fee-for-service plan in Seattle, Washington. The other two plans are prepaid group practice plans at Group Health Cooperative (GHC) of Puget Sound. The analysis produced three important results. First, there are no significant ambulatory differences between the free fee-for-service plan and the GHC plans. Second, the fee-for-service plan has a significantly greater use of inpatient pathology services than either GHC plan. The third major finding is that self-selection into (out of) an HMO does not appear to have an appreciable effect on the level of use of inpatient and outpatient pathology services.

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