Part 1: Background and Significance
This study’s aim is to analyze the relationship between the University of California, Riverside (UCR) students’ insurance types, and health outcomes. It draws on consumer theory, which assumes that if consumers are perfectly informed, they maximize their utility as a function of consuming various goods and services, given relative prices, income, and preferences. Health insurance is a normal good with a positive income elasticity of demand, implying that the poor are less likely to insure. Insurance choice is based on utility and consumers’ expectations about various factors, such as their health status due to uncertainty about future health. Enrolment into various insurance types is often influenced by different decision-making theories, such as expected utility theory, state-dependent theory, prospect theory, and others. These theories critique why consumers decide to associate themselves with various insurance plans.
The expected utility theory is of relevance to this study, as it explains why consumers have to make the right decisions when they choose the preferred insurance plans. The theory suggests that insurance demand is a choice between an uncertain loss that occurs with a probability when uninsured and a certain loss like paying a premium. Health maintenance organizations (HMO) and preferred provider organizations (PPO) are some of the common forms of insurance plans offered in the United States. Consumers’ choice of either of the two insurance types is closely related to health outcomes. This study will use two types of variables, including dependent and independent variables. The former will be the health status of each of the study’s participants, and the latter will be the insurance type. The study will hypothesize that UCR students with HMO insurance type experience more challenges related to health compared to learners with PPO insurance type.
The issues that will be addressed in this study will certainly be related to the everyday health and academic performance of students in the UCR University, and there is a need for the institution to educate students on the best insurance type that they need. Numerous other studies have explored the benefits of HMO and PPO health insurance amongst consumers. The background of this study can be found in studies that aim at giving the consumers detailed information on the best type of insurance that they need to associate when seeking health coverage.
One such research is “Health effects of managed care among the near-elderly,” which attempts to evaluate whether the health of adults aged 55-54 years is affected by their enrollment into HMO or PPO, relative to the fee-for-service plans. The study drew a nationwide random sample of 4,044 adults with employer-sponsored health insurance, from the 1994 to 2000 Health and Retirement study that was undertaken across the U.S. The research uses samples of all-near elders and sub-samples of near-elders with or without longstanding chronic health conditions to identify the insurance plans they are associated with and establish each plan’s effectiveness. The study’s findings are that HMO insurance type is not associated with any negative impacts compared to PPO health insurance and that the health status of older adults with longstanding chronic conditions improved upon enrolling in those plans (Bardey and Rochet 2010). The study argues that the PPO health plan tends to offer better services to the consumers compared to the HMO plan, and that is the reason why the demand the insurance is often on the rise.
Additional studies also examine the significance of HMO and PPO insurance on the health status of consumers across the U.S. For example, Zhang, Cowling, and Facer (2017) aver that various health insurance benefit designs based on value-based purchasing have been promoted to steer patients to high-value providers. However, consumers tend to know little about a particular health insurance benefit design’s effectiveness and underlying mechanisms. This study attempts to demonstrate the difference between PPO’s and HMO’s designs related to their effectiveness and the underlying mechanisms, and its findings show that PPO has an effective benefit design and provides more quality services to consumers compared to HMO insurance type. Buttorff et al. (2015) argue that by 2014, under seven million Americans had acquired private insurance through the health insurance exchanges. The exchange plans were expected to cover essential health benefits, including prescription drugs, but the effectiveness of drug prescription had not been well described in the plans. This study examined the variability in drug coverage in the health exchanges across the two plan types, which are PPO and HMO, and found that HMO insurance type was associated with lower premiums, although it provided less drug coverage compared to PPO insurance plan.
Another study also critiques the effectiveness of HPO and PPO insurance plans across the United States. Kosteas and Renna (2014) also critique the two health insurance plans that include HMO and PPO. The authors attempt to establish which insurance types offer a low-quality plan and which one offers high-quality plans to patients across the United States. The study’s findings are that although HMO is associated with lower premiums, it offers low-quality plans, while PPO insurance type offers high-quality plans to patients.
The mentioned studies delve into the effectiveness of the two types of health insurance plans. However, they fail to outline the underlying mechanisms that attest to the effectiveness of those plans. Most of the studies argue that the PPO plan is effective in helping consumers to improve their health outcomes while one of the studies that explored the mentioned subject disagrees with the argument. Xu and Jensen (2006) argue that the HMO health plan is more effective compared to the PPO plan. The studies explored above seem to draw their arguments on the expected utility theory that opines that insurance demand is a choice between an uncertain loss that occurs with a probability when uninsured and a certain loss like paying a premium. The purpose of this research will be to explore the underlying mechanisms that contribute to the effectiveness of those two plans, and why HMO design is not quite as effective as PPO plan, despite being associated with low premiums.
The significance of this study is that it will address some of the underlying mechanisms that demonstrate why the HMO plan is less effective in improving consumers’ health status compared to the PPO plan. The research’s main research question will be, does the HPO plan help to improve the health status of individuals, particularly the UCR undergraduate students? This study will be of significance to UCR as it will offer sufficient evidence as to why HMO plans are not effective for students, and why the institution should educate students on the need to associate with PPO health plans.
Part 2 Research Design and Methods
This study will adopt a cross-sectional survey design and it will focus on the collection of primary data, which will be gathered directly from the participants. The study’s unit analysis will be the individual as it will the most effective unit for understanding the relationship between insurance type and health outcome amongst the students. Integrating that unit analysis approach will also enable the researcher to understand the individual outliers in the analysis of the collected data. This study will be conducted online; thus, participants will be contacted through emails and provided with a link that will allow them to participate in the survey, which will be conducted through the surveyplanet.com website. Moreover, the researcher will categorize the survey questionnaire tool into two parts. Part one will inquire of a participant’s general information, including his or her socioeconomic status, while part two will include the questions that will allow establishing the relationship between insurance type each student associate with and health outcome. The study will follow up the non-respondents by sending them a reminder email, and if they do not respond, they will not be considered in the data analysis.
The research will aim to achieve a completion rate of 80 percent, but it could achieve a higher rate considering that it will only target a specific audience, the UCR students. The researcher will take control of the study, which will be done through electronic means. The researcher will seek the help of another individual who will be trained on how to handles various technological aspects of the online survey. Additionally, the survey will be done within a particular time frame, and that will be between the beginning of June and the end of July. Between June 1 and 7, 2020, the researcher will acquire approval from the UCR’s institutional review board (IRB) to conduct the study, and between June 8 to 21, 2020, the researcher will conduct the selection and recruitment of the study’s participants considering that the research will involve a large number of participants. The researcher will collect the data between June 22, 2020 ad \July 5, 2020, while data analysis and reporting will be done between July 6 to July 31. The benefit of the time frame will be that students will be in the winter break or summer break depending on the timing; thus, they will have enough time to participate in the survey. On the other hand, the limitation of this study will be that some senior students might decline to participate because they might be focused on their studies.
The study will concentrate on the UCR students. The study will recruit 250 participants to represent the whole of the larger UCR student body. The activity will be done on the inclusion and exclusion criteria. The participants must be full-time students at UCR, pursuing an undergraduate degree. The researcher will use non-probability, convenience sampling to select the study’s participants. The advantage of selecting that number of participants is that it will give an effective representation of the large UCR student body. A disadvantage of selecting that number is that the study’s results might be biased, considering that the study will be based upon the honesty of the participants, and there is a possibility of some giving inaccurate responses. The researcher will send to messages over 350 students through emails entailing information on how their email addresses were found, why is the research being conducted, who is the person conducting the study, and what are the potential risks and benefits associated with the study to recruit participants. The limitation of informing students about the study through emails will be that they may decide not to respond to the mails because they might think that the sender might be spying on them. The recruitment process will be supplemented by an incentive program, which will entail giving of the first 50 respondents of the email sent a bonus worth $10.
The study will comprise two variables, dependent and independent. The dependent variable will be a health outcome or health status. Operationally, the dependent variable will be the health problems each participant has and whether they feel healthy at that time. The independent variable will be the insurance type. Operationally, the independent variable will be the type of insurance a particular student associates with. The study will conceptualize the measures of the variables and separate the survey questions into two parts. Part 1 will entail questions related to the PPO plan and how it influences health outcomes, while part 2 will entail questions related to the HMO plan and how it influences health outcomes. Questions related to health outcomes will have four responses, and the researcher will assign scores of between 1-4 to each response. For instance, “do you feel healthy at the moment?” will be associated with five responses, including not healthy, improving, a bit better, and better. The researcher will assign 1 to the lowest frequency and 4 to the highest frequency.
The researcher will sum up the measures of the independent variables, and measures of the dependent variables will be combined. Higher values of the composite measures of the independent variables (PPO and HMO) will represent the effectiveness of the health plans. Furthermore, higher values of the composite measures of the dependent variable will represent the positive outcome of a particular health plan. The source of the independent variable will be me, and the source of the independent variable will be the student.
The researcher will study the correlation between the two variables by comparing the total score of the composite measures. If the researcher gets a positive correlation between the composite measure of the two variables, then the study will have supported the hypothesis.
Part 3: Ethical Issues
Before the survey, the participants will be provided with information about the study. The information will entail how the researcher accessed each participant’s email address, what is the purpose of the study, who is conducting the study, and the potential benefits and risks of the research. Below the message, participants will be provided with a link that once they click, will provide them with options accept, which will require them to join the survey and decline option, which will allow them to withdraw from the survey. The researcher will inform the participants that their identity will have to remain anonymous throughout the survey. That implies that no participant will be required to include his or her name and other identification features in the survey material. However, the initial information regarding each participant’s identity that will have been collected earlier will be stored in separate locations, and only authorized personnel will be able to retrieve the information. The aim of storing participants’ information in separate locations and allowing only an authorized person to access them will be to protect each participant’s identity. The risks of the research will be low as there will be no psychological discomfort that might be brought about by the nature of the questions that will be asked. Since the study will depend on each participant’s honesty to respond to the questions, there is a possibility of deception, meaning that there will be a deception debriefing.
Bardey, David, and Jean-Charles Rochet. 2010. “Competition Among Health Plans: A Two-Sided Market Approach.” Journal of Economics & Management Strategy 19(2):435–51.
Buttorff, Christine et al. 2015. “Comparing Employer-Sponsored and Federal Exchange Plans: Wide Variations in Cost Sharing for Prescription Drugs.” Health Affairs. Retrieved May 17, 2020 (https://www.healthaffairs.org/doi/full/10.1377/hlthaff.2014.0615).
Kosteas, Vasilios D. and Francesco Renna. 2014. “Plan Choice, Health Insurance Cost and Premium Sharing.” Journal of Health Economics 35:179–88.
Xu, Xiao and Gail A. Jensen. 2006. “Health Effects of Managed Care Among the Near-Elderly.” Journal of Aging and Health 18(4):507–33.
Zhang, Hui, David W. Cowling, and Matthew Facer. 2017. “Comparing the Effects of Reference Pricing and Centers-Of-Excellence Approaches to Value-Based Benefit Design.” Health Affairs 36(12):2094–2101.