Additional data on health plan characteristics include disenrollment rates and plan model type covering staff, group, network, IPA, and mixed models are used as covariates. Secondly, managed care markets are informationally efficient with respect to the financial factors of premium and subjective coverage measures. They are also informationally efficient with respect to quality, as measured by report cards and quit rates. The effect persists when report card residuals are used in place of report card scores and is stronger within a small sample of new hires compared to a larger sample of existing employees. The results also indicate that when report cards are not made available employees rely on substitute sources of information such as the plan quit rate and plan premium to infer quality.
Market efficiency is optimized when report card are widely distributed.
It can improve managed care markets information efficiency for both new hires and existing employees when they need to choose their healthplans.