FEE-FOR-SERVICE VERSUS HMO OUTPATIENT EXPENDITURE PATTERNS

This study compares the higher moments of fee-for-service (FFS) and he alth maintenance organization (HMO) expenditure distributions in conne ction with outpatient episodes for randomly assigned patients over 39 diagnoses. The results indicate that the variance and skewness of the unexplained variation in expenditure is much greater for FfS health ca re than for HMO health care. The results may be attributable to the co nstruction of the dependent variable or to physician financial incenti ves.