Table 5. Premium Regression1.
| Observations = 3,109 | ||||
|---|---|---|---|---|
| Mean of LHS = 4.4066 | ||||
| Adjusted R-squared = 0.589 | ||||
| F[85, 3023] = 533.32 | ||||
| Results corrected for Heteroskedasticity | ||||
| Breusch-Pagan Chi-Squared (D.F.) = 1338.76 (85) | ||||
| Final Value of Rho = 0.48185 | ||||
| Durbin-Watson: Untransformed Residuals = 1.0363 | ||||
| Durbin-Watson for Transformed Residuals = 2.0353 | ||||
| Autocorrelation: Transformed Residuals = -0.01767 | ||||
| Variable | Coefficient | Standard Error | t-ratio | Probability |
| Constant | 3.8752 | 0.09192 | 42.158 | 0.000 |
| Merged Last Year | -0.015550 | 0.03152 | -0.493 | 0.622 |
| Merged 2 Years Ago | 0.030314 | 0.03521 | 0.861 | 0.389 |
| Merged 3+ Years Ago | -0.0050665 | 0.03179 | -0.159 | 0.873 |
| Will Merge | 0.015720 | 0.03136 | 0.501 | 0.616 |
| Will Exit | -0.041126 | 0.03013 | -1.365 | 0.172 |
| Will Fail | -0.020851 | 0.02302 | -0.906 | 0.365 |
| Competitive*Merged 1 | 0.13073 | 0.05538 | 2.361 | 0.018 |
| Competitive*Merged 2 | -0.065699 | 0.06084 | -1.080 | 0.280 |
| Competitive*Merged 3+ | -0.035040 | 0.05729 | -0.612 | 0.541 |
| Competitive*Will Merge | 0.068598 | 0.05312 | 1.291 | 0.197 |
| Competitive*Will Exit | 0.11996 | 0.05461 | 2.197 | 0.028 |
| Competitive*Will Fail | -0.10445 | 0.04706 | -2.219 | 0.026 |
| Per Capita Income | 0.0072889 | 0.002883 | 2.528 | 0.011 |
| Hospital Utilization | -0.00032548 | 0.0002555 | -1.274 | 0.203 |
| Open-Ended | -0.045228 | 0.01111 | -4.071 | 0.000 |
| Coalitions | -0.00095216 | 0.001938 | -0.491 | 0.623 |
| Rate Approval | -0.0045939 | 0.02062 | -0.223 | 0.824 |
| Rate Approval Missing | 0.064694 | 0.02607 | 2.482 | 0.013 |
| Medicare Part A | 0.15486 | 0.01937 | 7.995 | 0.000 |
| HMO Market Penetration | 0.48424 | 0.1946 | 2.488 | 0.013 |
| Docs Per Capita | -0.0069364 | 0.01130 | -0.614 | 0.539 |
| Hospital Occupancy | -0.076836 | 0.07500 | -1.025 | 0.306 |
| Population Density | -0.035144 | 0.01747 | -2.011 | 0.044 |
| IPA | 0.078186 | 0.03039 | 2.573 | 0.010 |
| Network | 0.038882 | 0.01938 | 2.006 | 0.045 |
| Group | 0.025819 | 0.02156 | 1.197 | 0.231 |
| National HMO | 0.021957 | 0.01299 | 1.691 | 0.091 |
| Blue Cross | 0.022426 | 0.01390 | 1.613 | 0.107 |
| For-Profit | -0.048787 | 0.01132 | -4.309 | 0.000 |
| Federally Qualified | 0.065753 | 0.01657 | 3.968 | 0.000 |
| Federally Qualified IPA | -0.065493 | 0.02005 | -3.267 | 0.001 |
| Medicare Enrollment | 0.035368 | 0.07427 | 0.476 | 0.634 |
| Medicaid Enrollment | -0.00064140 | 0.0008376 | -0.766 | 0.444 |
| HMO Hospital Days | 0.000019104 | 0.00001067 | 1.790 | 0.073 |
| Copayment | 0.0049958 | 0.003995 | 1.251 | 0.211 |
| 1986 | -0.0013444 | 0.01785 | -0.075 | 0.940 |
| 1987 | -0.083767 | 0.06717 | -1.247 | 0.212 |
| 1988 | -0.030775 | 0.06741 | -0.457 | 0.648 |
| 1989 | 0.091298 | 0.06792 | 1.344 | 0.179 |
| 1990 | 0.20323 | 0.06901 | 2.945 | 0.003 |
| 1991 | 0.31623 | 0.06858 | 4.611 | 0.000 |
| 1992 | 0.42347 | 0.06895 | 6.142 | 0.000 |
| 1993 | 0.47386 | 0.06899 | 6.868 | 0.000 |
| Other National*86 | -0.022346 | 0.02497 | -0.895 | 0.371 |
| Other National*87 | -0.020943 | 0.02147 | -0.975 | 0.329 |
| Other National*88 | -0.0030227 | 0.02163 | -0.140 | 0.889 |
| Other National*89 | 0.017619 | 0.02071 | 0.851 | 0.395 |
| Other National*90 | 0.043300 | 0.01995 | 2.170 | 0.030 |
| Other National*91 | 0.0035910 | 0.02160 | 0.166 | 0.868 |
| Other National*92 | -0.059149 | 0.02312 | -2.559 | 0.011 |
| Other National*93 | -0.12290 | 0.02299 | -5.346 | 0.000 |
| Group Market C2/P1 | 0.0056593 | 0.02530 | 0.224 | 0.823 |
| Group Market C3/P1 | -0.037440 | 0.03282 | -1.141 | 0.254 |
| Group Market C4/P1 | -0.17257 | 0.03594 | -4.801 | 0.000 |
| Group Market C1/P2 | -0.0053237 | 0.03054 | -0.174 | 0.862 |
| Group Market C2/P2 | -0.012477 | 0.02919 | -0.427 | 0.669 |
| Group Market C3/P2 | -0.0072591 | 0.03005 | -0.242 | 0.809 |
| Group Market C4/P2 | -0.13649 | 0.03469 | -3.935 | 0.000 |
| Group Market C1/P3 | -0.082191 | 0.05662 | -1.452 | 0.147 |
| Group Market C2/P3 | -0.062830 | 0.04140 | -1.518 | 0.129 |
| Group Market C3/P3 | -0.030850 | 0.03461 | -0.891 | 0.373 |
| Group Market C4/P3 | -0.079354 | 0.04092 | -1.939 | 0.052 |
| Group Market C1/P4 | -0.098977 | 0.1718 | -0.576 | 0.565 |
| Group Market C2/P4 | -0.077343 | 0.06654 | -1.162 | 0.245 |
| Group Market C3/P4 | -0.068989 | 0.05080 | -1.358 | 0.174 |
| Group Market C4/P4 | -0.027380 | 0.04891 | -0.560 | 0.576 |
| IPA Market C2/P1 | 0.032436 | 0.01894 | 1.713 | 0.087 |
| IPA Market C3/P1 | 0.025410 | 0.02442 | 1.040 | 0.298 |
| IPA Market C4/P1 | -0.014136 | 0.03078 | -0.459 | 0.646 |
| IPA Market C1/P2 | -0.060882 | 0.02662 | -2.287 | 0.022 |
| IPA Market C2/P2 | -0.0044402 | 0.02445 | -0.182 | 0.856 |
| IPA Market C3/P2 | 0.021593 | 0.02508 | 0.861 | 0.389 |
| IPA Market C4/P2 | -0.055676 | 0.03060 | -1.820 | 0.069 |
| IPA Market C1/P3 | -0.014687 | 0.04011 | -0.366 | 0.714 |
| IPA Market C2/P3 | -0.016202 | 0.03290 | -0.492 | 0.622 |
| IPA Market C3/P3 | -0.0021271 | 0.03186 | -0.067 | 0.947 |
| IPA Market C4/P3 | -0.027324 | 0.03596 | -0.760 | 0.447 |
| IPA Market C1/P4 | -0.22130 | 0.1701 | -1.301 | 0.193 |
| IPA Market C2/P4 | -0.0092861 | 0.05520 | -0.168 | 0.866 |
| IPA Market C3/P4 | -0.017429 | 0.04673 | -0.373 | 0.709 |
| IPA Market C4/P4 | -0.10751 | 0.04687 | -2.294 | 0.022 |
1
Dependent variable is the natural logarithm of private premium per member month.
NOTES: HMO is health maintenance organization. IPA is individual practice association.
SOURCE: Research by Feldman, R., Wholey, D., and Christianson, J. for this article, 1996.