Provider choice and utility loss due to selective contracting in rural andurban areas

An econometric model estimated the disutility of traveling long distances f or depression treatment, and simulations calculated the utility loss associ ated with selective contracting in rural and urban areas. A representative sample of depression patients (n = 106) and all practicing providers (n = 3 ,710) in Arkansas were identified and the distances between them were calcu lated. Using discrete choice analysis, patient preferences for provider typ e and travel distance were estimated. Simulations calculated the utility lo ss associated with alternative scenarios of selective contracting. Provider type and distance were significant predictors of provider choice. To equat e the utility loss associated with selective contracting in rural and urban areas, a slightly higher proportion of rural physicians and a substantiall y higher proportion of rural mental health specialists must be contracted. To avoid further reductions in geographic access, managed care organization s should contract with a higher proportion of rural providers than urban pr oviders.