Home health resource utilization. Health maintenance organization versus fee-for-service subscribers

A commonly held belief is that patients enrolled in health maintenance organizations (HMOs) are authorized fewer home health services than patients enrolled in fee-for-service (FFS) plans. This study compared home health resource utilization patterns between patients enrolled in a cost HMO and in FFS plans. Although no significant differences were found, the cost HMO subscribers actually received more services. Despite these similarities, home health administrators need to carefully craft contracts with cost HMOs.

Ambulatory care practice variation within a Medicaid program

STUDY QUESTIONS

What is the extent of variation in patterns of ambulatory care practice across one state's Medicaid program once case mix is controlled for? How much of this variation in resource consumption is explained by factors linked to the provider, patient, and geographic subarea?

DATA SOURCES/STUDY SETTING

Practices of all providers delivering care to persons who were continuously enrolled in the Maryland Medicaid program during FY 1988 were studied. A computerized summary of all services received during this year for 134,725 persons was developed using claims data. We also obtained data from the state's beneficiary and provider files and the American Medical Association's masterfile. Each patient was assigned a "usual source of care" (primary provider) based on the actual patterns of service. The Ambulatory Care Group (ACG) measure was used to help control for case mix.

STUDY DESIGN

This was a cross-sectional study based on the universe of continuously enrolled Medicaid enrollees in one state.

PRINCIPAL FINDINGS

After controlling for case mix, the variation in patient resource use by type of primary provider was 19 percent for ambulatory visits, 46 percent for ancillary testing, 61 percent for prescriptions, and 81 percent for hospitalizations. Across Maryland counties, comparing the low- to high-use jurisdiction, there was 41 percent variation in case mix-adjusted visit rates, 72 percent variation in pharmacy use, and 325 percent variation in hospital days. At the individual practice level, physician characteristics explain up to 17 percent of ambulatory resource use and geographic area explains only a few percent, while patient characteristics explain up to 60 percent of variation.

CONCLUSIONS

Since a large proportion of variation was explained by patient case mix, it is evident that risk adjustment is essential for these types of analyses. However, even after adjustment, resource use varies considerably across types of ambulatory care provider and region, with consequent implications for efficiency of health services delivery.

Shifting the paradigm: monitoring access in Medicare managed care

Medicare managed care enrollment growth points to the need to develop an approach for monitoring access to care for the increasing number of beneficiaries who use these arrangements. This article describes the issues to be addressed in designing a system for monitoring managed care plan enrollees' ability to obtain needed medical care on a timely basis. We review components of the monitoring approach used for traditional fee-for-service (FFS) Medicare, including the conceptual framework, data, measures, and subgroups targeted in monitoring efforts, and discuss the adaptation of that approach for monitoring access in Medicare managed care.

Bringing managed care incentives to Medicare's fee-for-service sector

The Health Care Financing Administration (HCFA) could work with eligible physician organizations to generate savings in total reimbursements for their Medicare patients. Medicare would continue to reimburse all providers according to standard payment policies and mechanisms, and beneficiaries would retain the freedom to choose providers. However, implementation of new financial incentives, based on meeting targets called Group-Specific Volume Performance Standards (GVPS), would encourage cost-effective service delivery patterns. HCFA could use new and existing data systems to monitor access, utilization patterns, cost outcomes and quality of care. In short, HCFA could manage providers, who, in turn, would manage their patients' care.

Health status of Medicare enrollees in HMOs and fee-for-service in 1994

We compared the health status of 863 health maintenance organization (HMO) enrollees with that of 4,576 non-enrollees, controlling for demographics and area of residence, using 1994 data from the Medicare Current Beneficiary Survey (MCBS). HMO respondents were less likely to report fair or poor health, functional impairment, or heart disease. Average predicted costs based on various health-status measures were substantially lower for HMO respondents than for respondents in fee-for-service (FFS) arrangements. The Medicare payment formula for HMOs does not adequately adjust for the better health and consequent lower expected costs of HMO enrollees. The addition of health-status measures would improvement payment accuracy and reduce average HMO payments significantly below current levels.

Do HMOs restrict access to health care among the chronically ill?

Health Maintenance Organizations are enrolling an increasing number of people for the delivery of their health care. Observers are asking whether this trend has resulted in the underprovision of health care to vulnerable population groups. This study asks whether HMOs under-provide care to the chronically ill. We use Ronald Andersen's Behavioral Model to derive predictive expectations about the provision of hospital and physician services to the chronically ill. The results indicate that HMOs do not under-provide health care to the chronically ill, compared to traditional fee-for-service insurance arrangements. We further found that HMOs provide more physician services to those in excellent health, compared to those in fee-for-service arrangements.

Adverse selection among multiple competing health maintenance organizations

This study examines risk selection among nine health plans competing for 16,182 employees of one large firm in 1989: one conventional fee-for-service plan, one group-model health maintenance organization (HMO), and seven network and independent practice model HMOs. We develop and compare measures of risk using weights based on HMO and fee-for-service expenditure data, respectively. We use a multiequation statistical model to develop two sets of utilization and expenditure weights for enrollees in each plan. One set of weights, based on discharge abstracts and outpatient records from the large group-model HMO, measures how much each of the nine groups of employees and dependents would have spent, had they been enrolled in a stringently managed plan with no consumer cost sharing. The other set of weights, based on fee-for-service claims data, measures how much each group would have spent, had it been enrolled in an unmanaged health plan with significant coinsurance and deductibles. Predicted annual expenditures per enrollee exhibit a 23% range from lowest (favorable selection) to highest (adverse selection) risk plans using the HMO weights and a 17% range using fee-for-service weights. The fee-for-service plan and group-model HMO with large enrollments have risk mixes near the center of the spectrum. Smaller HMOs exhibit the extreme forms of both favorable and adverse selection. The statistical methods adopted in this study can be used to risk-adjust capitation payments to competing health plans. As mergers among HMOs and group purchasing arrangements among employers increase the average enrollment in each plan from each payor, however, risk differences among plans will be attenuated and the need to risk-adjust payments will be less severe. Key words: health insurance; adverse selection; managed competition; health maintenance organization.

Effect of utilization review in a fee-for-service health insurance plan

BACKGROUND

Although utilization review is widely used to control health care costs, its effect on patterns of health care is uncertain.

METHODS

In 1989, New York City and its unions temporarily replaced actual utilization review with sham review for half the participants in the city's fee-for-service health insurance plan. We compared the health services provided to 3702 enrollees whose requests were subjected to utilization review (the review group) with the services provided to 3743 enrollees whose requests received sham review and were automatically approved for insurance coverage (the nonreview group). The enrollees, physicians, and hospitals were all unaware of the group assignments.

RESULTS

During the study period (mean duration, eight months), the members of the review group underwent 1255 procedures in 20 categories of procedures for which second opinions were required (such as breast, cataract, foot, hernia, and hip-replacement surgery, as well as hysterectomy and coronary bypass surgery), and the members of the nonreview group underwent 1365 procedures (P = 0.02). The members of the review group had 124 fewer procedures in doctors' offices and hospital outpatient departments (P = 0.002). In the following year, the members of the review group underwent 248 procedures from the 20 categories, and the members of the nonreview group underwent 234 (P = 0.46). No other differences in patterns of care were found between the groups, including rates of hospital admission to medical-surgical, substances-abuse, or psychiatric units; average lengths of hospital stay; the percentage of enrollees who received preadmission testing; or rates of use of home care. During the study period, the mean age-adjusted insurance payments per person were $7,355 in the review group and $6,858 in the nonreview group (P = 0.06).

CONCLUSIONS

The utilization-review program reduced the performance of diagnostic and surgical procedures for which second opinions were required and did not merely delay them until the following year. Otherwise, the program had little effect. Alternatively, actual review and sham review may both have decreased the use of hospital services, with patients or their physicians choosing more efficient treatment when they believed that care would be reviewed.

New estimates of the underinsured younger than 65 years

We estimate that at least 29 million Americans with private insurance are underinsured. That figure identifies the underinsured younger than 65 years by the risk of large out-of-pocket expenditures for an unusually expensive, catastrophic illness. A slightly smaller number, about 25 million, are underinsured by an alternate definition: they have insurance that pays a smaller proportion of claims than the plan with the largest enrollment in the federal employee program. The federal employee plan was the insurance standard proposed in several recent health system reform bills. Our estimate of the number of people who are underinsured for catastrophic illness is almost half again larger than the number that was widely cited during last year's debates on health system reform. That estimate was based on the same concept but was projected from a study published 10 years ago.

Medical leadership in an era of managed care and continual improvement

Because clinicians control more than 70% of the total costs of medical care, the success of managed care systems in containing expenditures depends to a large degree on their leadership. Clinicians must make cultural changes and develop core competencies and technical skills to promote the continuous improvement needed for the success of managed care.

Who belongs to HMOs: a comparison of fee-for-service versus HMO enrollees

As employers have turned to managed care to curtail the rising cost of health care benefits, the number of HMO enrollees has proliferated. Between 1984 and 1994, HMO enrollment increased from approximately 15 million to over 49 million individuals. Although research has indicated that HMOs have been effective in limiting medical costs, there is mixed evidence in the literature on how they achieve these savings. This article uses data from the 1987 National Medical Expenditure Survey to examine one hypothesis for these patterns: that HMOs enroll a healthier population than fee-for-service plans. To test this hypothesis we examine HMO and fee-for-service enrollees with respect to socioeconomic variables such as age, race, sex, income, education, health status, and location. Our results indicate that HMOs tend to enroll a younger but not much healthier population than traditional fee-for-service plans, suggesting that self-selection is not a major contributor to HMO cost savings.

Resource utilization in treatment of acute myocardial infarction: staff-model health maintenance organization versus fee-for-service hospitals. The MITI Investigators. Myocardial Infarction Triage and Intervention

OBJECTIVES

This study sought to compare the use of invasive procedures and length of stay for patients admitted with acute myocardial infarction to health maintenance organization (HMO) and fee-for-service hospitals.

BACKGROUND

The HMOs have reduced costs compared with fee-for-service systems by reducing discretionary admissions and decreasing hospital length of stay. It has not been established whether staff-model HMO hospitals also reduce the rate of procedure utilization.

METHODS

Using data from a retrospective cohort, we performed univariate and multivariate comparisons of the use of cardiac procedures, length of stay and hospital mortality in 998 patients admitted to two staff-model HMO hospitals and 7,036 patients admitted to 13 fee-for-service hospitals between January 1988 and December 1992.

RESULTS

The odds of undergoing coronary angiography were 1.5 times as great for patients admitted to fee-for-service hospitals than for those admitted to HMO hospitals (odds ratio 1.5, 95% confidence interval [CI] 1.3 to 1.9). Similarly, the odds of undergoing coronary revascularization were two times greater in fee-for-service hospitals (odds ratio 2.0, 95% CI 1.6 to 2.5). However, higher utilization was strongly associated with the greater availability of on-site cardiac catheterization facilities in fee-for-service hospitals. The length of hospital stay, by contrast, was approximately 1 day shorter in the fee-for-service cohort (7.3 vs. 8.0 days, p < 0.05).

CONCLUSIONS

Physicians in staff-model HMO hospitals use fewer invasive procedures and longer lengths of stay to treat patients with acute myocardial infarction than physicians in fee-for-service hospitals. This finding, however, appears to be associated with the lack of on-site catheterization facilities at HMO hospitals.

The measure of Medicare services

Trying to make managed care more responsive to the demands of employers and consumers is a challenge. More and more HMOs are providing financial incentives for doctors to deliver better quality and service. But critics contend that bonuses can weaken quality.

Medicare, managed care, and vision services to the elderly

Proportionately, fewer Medicare patients are enrolled in HMOs than in fee-for-service programs. Despite the advantages of selecting the HMO option, only 2.9 million beneficiaries are enrolled. Integrating Medicare into health care reform will be a major challenge to this administration. There is general recognition that it will be difficult to control health costs if people at least 65 years of age remain outside the system. With renewed marketing programs directed toward the elderly, we can expect further increases in Medicare HMO enrollment.

HMO use of diagnostic tests: a review of the evidence

This article reviews twenty-four studies that compare health maintenance organization (HMO) use ofdiagnostic testing services tofee-for-service(FFS) use. Diagnosticservices contribute to both the high level and the growth of health care costs. This review of a series of studies is important because any single study is commonly limited to a small set of diagnostic tests and generally provides analysis restricted to one, or afew, HMOs. Combining evidence from each of the studies yields thefollowing conclusions. Relative to FFS enrollees, HMO enrollees receive fewer inpatient diagnostic tests. Evidence concerning HMO utilization of outpatient testing relative to FFS plans, though mixed, tends to suggest that HMOs do not perform more ofthese services and may performfewer for patients with chronic illnesses. Quality of care does not appear to suffer in HMOs despite lower testing rates, suggesting HMOs reduce testing in situations in which the incremental value is small.