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April 1, 1992

Hospital Resource Allocation and Insurance Coverage-Reply

Author Affiliations

University of California at San Francisco

JAMA. 1992;267(13):1778-1779. doi:10.1001/jama.1992.03480130090025

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In Reply.  —We agree with Dr Johnson that it is important to consider how physician behavior is rewarded in interpreting our findings on resource allocation to sick newborns by insurance status. Since providers in prepaid plans (including health maintenance organizations, the predominant type of prepaid plan in California) have powerful incentives for eliminating unnecessary services, we looked separately at the records of babies covered by prepaid plans. The babies who were uninsured or on Medi-Cal consistently received significantly fewer services than those with prepaid coverage. This was true despite evidence that the uninsured and Medi-Cal babies were likely to be at greater medical risk than either the prepaid or fee-for-service private groups.Prepaid plans have been accused of cutting too many corners to suit some consumers' preferences; we are not aware of charges that their service levels are excessive. We therefore interpret our results as indicating that the babies who