Demand for and provision of HMO quality information

This study attempts to systematically examine the factors that affect the demand and supply of HMO quality information. Based on the implications of two theoretical models, we draw hypotheses regarding the demand and supply of HMO quality information. In the absence of a direct measure for the price of information, we test these hypotheses using indirect measures that should affect the effective price of HMO quality information. On the supply side, this study focused particularly on how the actual quality level of an HMO would be related to the chance that this quality level becomes disclosed. A logistic regression analysis found a strong positive relationship between favorable quality indicators and the probability that an HMO would reveal its quality level specifically through the Health Plan Employer Data and Information Set (HEDIS). The supply of HEDIS is also positively affected by other factors such as the size and the tax status of HMOs, and negatively affected by the rate of HMO penetration in the market. Findings from the demand part of the study confirm that large employers tend to use more of and have more demand for HMO quality information than their smaller counterparts. Although these study findings contribute to a better understanding of the issues of HMO quality information in the current HMO market, many important questions remain to be answered.