Willard Manning, Ph.D., has conducted a variety of research on the impact of health care insurance arrangements on the demand for health care and on health status. He has also examined the impact of utilization review (UR) programs for inpatient medical care on health care costs. Using data on both employers who switched into the UR system and those who did not, he and his colleagues found that UR reduced health care costs. But most of this was by reducing length of stay, not inpatient admission rates. According to Manning, “the estimates of the effects of UR on health care were sensitive to how one conducts the analysis. When employers were used as their own controls, the estimated impact was much less than if cross-sectional comparisons between employers with and without UR were used.”

Recently, Dr. Manning and his colleagues have received a HCFO grant to study the impact of the termination of a utilization review program by United HealthCare in late 1999 as a result of pressure surrounding the patient bill of rights debate. This is a reverse experiment; it will concentrate on the absence of UR/UR's termination, not its introduction. So far the results indicate that the change had minimal impact on health care use; some effects were found on inpatient psychiatric care and on outpatient use of MRIs.

Manning began his study of health insurance as one of the primary researchers on the Health Insurance Experiment (HIE), a large scale randomized study of the effect of alternative insurance arrangements on health status and the use of health services by a non-aged population. His work on the Health Insurance Experiment included studies of the demand for various health services as well as an empirical determination of optimal health insurance coverage by considering the tradeoff between the costs from moral hazard and the gains from risk pooling in health insurance.

While most of his insurance work has focused on the impact of demand-side cost-sharing arrangements, he has also looked at a supply-side alternative by studying the effect of a staff model HMO (Group Health Cooperative of Puget Sound). This work provided the first evidence from a randomized trial that this HMO reduced health care costs relative to comparable fee-for-service plans, largely by reducing inpatient use. The results were not driven by adverse selection into fee-for-service plans.

Dr. Manning’s work has also examined the effects of prepaid mental health carve-outs on the health care use and health status of Medicaid populations in Utah’s Medicaid program. For enrollees with schizophrenia, he found some evidence that those left in traditional Medicaid fared better than those in the new prepaid arrangement, an effect that slowly materialized over time.

Dr. Manning has a secondary set of interests in the economics of poor health habits. He has investigated the external economic costs of poor health habits -- smoking, heavy drinking, and lack of exercise. He has examined the role of prices and regulation of public smoking on the demand for cigarettes. Recently, he completed work for NIAAA that shows that price affects demand for alcohol in all but the heaviest drinkers. In addition, he has found that higher prices lead to reduced abuse and dependence, largely by affecting the likelihood of drinking or of having an alcohol problem, but not the level of problems for those with any alcohol related problem. “The results will inform policymakers considering the appropriate level of taxes for alcoholic beverages: either an economically optimal tax on alcoholic beverages or one designed for public health purposes,” says Manning.

His other research interests have included: copyright, peak-load pricing, risk adjustment, alternative statistical methods to deal with skewed (usually expenditure) data, and cost-effectiveness analysis.

Selected References:
Duan N, Manning WG, Morris CN, Newhouse JP, "A Comparison of Alternative Models for the Demand for Medical Care," Journal of Business and Economics Statistics, 1983; 1(2):115-126

Manning WG, Leibowitz A., Goldberg GA, Rogers WH, Newhouse JP, "A Controlled Trial of the Effect of a Prepaid Group Practice on Use of Services," The New England Journal of Medicine, 1984; 310:1505-1510.

Siu AL, Sonnenberg FA, Manning WG, Goldberg GA, Bloomfield ES, Newhouse JP, Brook RH, "Inappropriate Use of Hospitals in a Randomized Trial of Health Insurance Plans," New England Journal of Medicine, 1986; 315:1259-1266.

Manning WG, Keeler EB, Newhouse JP, Sloss EM, Wasserman J, "The Taxes of Sin: Do Smokers and Drinkers Pay Their Way?" Journal of the American Medical Association, 1989; 261(11):1604-1609.

Newhouse JP, Manning WG, et al., "Objective Measures of Health and Prior Utilization as Adjusters for Capitation Rates," Health Care Financing Review, 1989; 10(3):41-54.

Wells KB, Manning WG, Valdez BR, "The Effects of a Prepaid Group Practice on the Psychological Distress and Psychological Well-Being of a General Population," Archives of General Psychiatry, 1989; 46(4): 315-32.

Manning WG, Keeler EB, Newhouse JP, Sloss EM, Wasserman J, The Costs of Poor Health Habits, Harvard University Press, 1991.

Khandker R, Manning WG, "Impact of Utilization Review on Costs and Utilization", in H.E. Frech and P. Zweifel (eds.), Health Economics Worldwide, pp. 47-62, Kluwer, 1992.

Khandker R, Manning WG, Ahmed T, "Utilization Review Savings at the Micro Level," Medical Care, 1992; 30(11):1043-1052.

Newhouse JP, Archibald RW, The Health Insurance Group, Free-For-All: Health Insurance, Medical Costs, and Health Outcomes: The Results of the Health Insurance Experiment, Cambridge: Harvard University Press, 1993.

Manning WG, Blumberg L, Moulton L, "The Demand for Alcohol: The Differential Response to Price", Journal of Health Economics, 1995;14:123-148.

Manning WG, Marquis MS, "Health Insurance: The Trade-off Between Risk Pooling and Moral Hazard," Journal of Health Economics, 1996; 15(5):609-639.

Manning WG,“The Logged Dependent Variable, Heteroscedasticity, and the Retransformation Problem,” Journal of Health Economics, 1998; 17(3):283-295.

Manning WG, Liu C-F, Stoner TJ, Gray DZ, Lurie N, Popkin M, Christianson JB, "Outcomes for Medicaid Beneficiaries With Schizophrenia Under a Prepaid Mental Health Carve-out”, Journal of Behavioral Health Services & Research, 1999; 26(4):442-450.

Manning WG, Mullahy J, “Estimating Log Models: To Transform Or Not To Transform?,” Journal of Health Economics, 2001; 20(4): 461-494.