Risk adjustment for health plans disproportionately enrolling frail Medicare beneficiaries

There is concern about the adequacy of diagnosis-based risk adjusters for paying health plans that disproportionately enroll frail Medicare beneficiaries. The Medicare Current Beneficiary Survey (MCBS) was used to examine the ability of two risk-adjustment models to predict Medicare costs for groups defined by institutional status and difficulty with activities of daily living (ADLs). Both models underpredicted average costs for non-institutionalized frail beneficiaries; however, the models slightly overpredicted expenses for most frail individuals and severely underpredicted for a minority. Further refinements are needed if diagnosis-based models are used to pay plans that disproportionately enroll frail beneficiaries.

Obtaining long-term disease specific costs of care: application to Medicare enrollees diagnosed with colorectal cancer

OBJECTIVES

This study develops estimates of long-term, cancer-related treatment cost using a modeling approach and data from the SEER-Medicare linked database. The method is demonstrated for colorectal cancer.

METHODS

Data on Medicare payments were obtained for colorectal cancer patients for the years 1990 to 1994 from the SEER-Medicare linked database. Claims payment data for control subjects were obtained for Medicare enrollees without cancer residing in the same areas as patients. Estimates of long-term cost (< or = 25 years following the date of diagnosis) were obtained by combining treatment/phase-specific cost estimates with estimates of long-term survival from SEER. Treatment phases were defined as initial care, terminal care, and continuing care. Cancer-related estimates for each phase were obtained by subtracting costs for control subjects from the observed costs for cancer patients, matching on age group, gender, and registry area. Estimates of long-term cost < or = 11 years obtained by this method were compared with 11-year estimates obtained by application of the Kaplan-Meier sample average (KMSA) method.

RESULTS

The mean initial-phase cancer-related cost was approximately $18,000 but was higher among patients with more advanced cancer. The mean continuing-phase cancer-related cost was $1,500 per year and declined with increasing age, but was higher on an annual basis among persons with later stages of cancer and shorter survival time. The mean terminal-phase cancer-related cost was $15,000 and declined with both age at death and more advanced stage at diagnosis. After the phase-specific estimates were combined, the average long-term cancer-related cost was $33,700 ($31,300 at 3% discount rate) for colon cancer compared with $36,500 ($33,800 at 3% discount rate) for cancer of the rectum. This represented about half of the total long-term cost for Medicare enrollees diagnosed with this disease. Long-term cost was highest for Stage III cancer and lowest for in situ cancer. Eleven-year cancer-related costs estimated by the KMSA method were similar to estimates using the phase-based approach.

CONCLUSIONS

This paper demonstrates that valid estimates of cancer-related long-term cost can be obtained from administrative claims data linked to incidence cancer registry data.

Predictors of Medicare costs in elderly beneficiaries with breast, colorectal, lung, or prostate cancer

BACKGROUND

Determining the apportionment of costs of cancer care and identifying factors that predict costs are important for planning ethical resource allocation for cancer care, especially in markets where managed care has grown.

DESIGN

This study linked tumor registry data with Medicare administrative claims to determine the costs of care for breast, colorectal, lung and prostate cancers during the initial year subsequent to diagnosis, and to develop models to identify factors predicting costs.

SUBJECTS

Patients with a diagnosis of breast (n = 1,952), colorectal (n = 2,563), lung (n = 3,331) or prostate cancer (n = 3,179) diagnosed from 1985 through 1988.

RESULTS

The average costs during the initial treatment period were $12,141 (s.d. = $10,434) for breast cancer, $24,910 (s.d. = $14,870) for colorectal cancer, $21,351 (s.d. = $14,813) for lung cancer, and $14,361 (s.d. = $11,216) for prostate cancer. Using least squares regression analysis, factors significantly associated with cost included comorbidity, hospital length of stay, type of therapy, and ZIP level income for all four cancer sites. Access to health care resources was variably associated with costs of care. Total R2 ranged from 38% (prostate) to 49% (breast). The prediction error for the regression models ranged from < 1% to 4%, by cancer site.

CONCLUSIONS

Linking administrative claims with state tumor registry data can accurately predict costs of cancer care during the first year subsequent to diagnosis for cancer patients. Regression models using both data sources may be useful to health plans and providers and in determining appropriate prospective reimbursement for cancer, particularly with increasing HMO penetration and decreased ability to capture complete and accurate utilization and cost data on this population.

Prostate cancer treatment and ten-year survival among group/staff HMO and fee-for-service Medicare patients

OBJECTIVE

To compare treatment patterns and the ten-year survival of prostate cancer patients in two large, nonprofit, group/staff HMOs to those of patients receiving care in the fee-for-service health setting.

DATA SOURCES/STUDY DESIGN

A cohort of men age 65 and over diagnosed with prostate cancer between 1985 and the end of 1992 and followed through 1994. Subjects (n = 21,741) were ascertained by two population-based tumor registries covering the greater San Francisco-Oakland and Seattle-Puget Sound areas. Linkage of registry data with Medicare claims data and with HMO inpatient utilization data allowed the determination of health plan enrollment and the measurement of comorbid conditions. Multivariate regression models were used to examine HMO versus FFS treatment and survival differences adjusting for sociodemographic and clinical characteristics.

PRINCIPAL FINDINGS

Among cases with non-metastatic prostate cancer, HMO patients were more likely than FFS patients to receive aggressive therapy (either prostatectomy or radiation) in San Francisco-Oakland (odds ratio [OR] = 1.69, 95% CI = 1.46-1.96) but not in Seattle (OR = 1.15, 0.93-1.43). Among men receiving aggressive therapy, HMO cases were three to five times more likely to receive radiation therapy than prostatectomy. Overall mortality was equivalent over ten years (HMO versus FFS mortality risk ratio [RR] = 1.01, 0.94-1.08), but prostate cancer mortality was higher for HMO cases than for FFS cases (RR = 1.25, 1.13-1.39).

CONCLUSION

Despite marked treatment differences for clinically localized prostate cancer, overall ten-year survival for patients enrolled in two nonprofit group/staff HMOs was equivalent to survival among patients receiving care in the FFS setting, even after adjustment for sociodemographic and clinical characteristics. Similar overall but better prostate cancer-specific survival among FFS patients is most plausibly explained by differences between the HMO and FFS patients in both tumor characteristics and unmeasured patient selection factors.

Use of Medicare hospital and physician data to assess breast cancer incidence

OBJECTIVES

Health claims data have the potential of being an inexpensive, timely, and nationally representative source of information about cancer. This study examined the utility of Medicare hospital and physician data as an independent source to identify incident breast cancer cases.

METHODS

Data came from Medicare and the National Cancer Institute's SEER cancer registries. From 1992, for women residing in the SEER states (n = 659,260), Medicare hospital and physician claims were reviewed to identify women with a breast cancer diagnosis on a claim (n = 6,784). These women were matched with women in the SEER data who had been diagnosed with breast cancer in 1992 (n = 3,230). The sensitivity, specificity, and positive predictive value (PPV) of the Medicare data were calculated. Logistic regression models were used to identified cancer related procedures reported to Medicare that could distinguish true cases from false positive cases. Predicted values from these models were included to create plots of sensitivity versus false positive rates and sensitivity versus PPV.

RESULTS

Medicare hospital data had 62% sensitivity, 99.9% specificity, and 88% PPV. Physician claims increased sensitivity by 14%, with specificity of 99.4%, and a PPV of 10%. Inclusion of additional cancer related diagnoses and procedures improved the ability to distinguish true cases from false positives, although the number of false positive cases remained high.

CONCLUSIONS

The Medicare data overall offer limited potential to assess breast cancer incidence, largely because of low sensitivity and poor PPV. The Medicare data may have utility to identify women undergoing selected breast cancer treatments. In addition, the data may be used to help registries focus case-finding efforts, particularly for persons undergoing cancer related treatments.

Stage at diagnosis and treatment patterns among older women with breast cancer: an HMO and fee-for-service comparison

CONTEXT

Few studies have compared patterns of care in health maintenance organization (HMO) and fee-for-service (FFS) settings.

OBJECTIVE

To examine breast cancer stage at diagnosis and, for those at an early stage, treatment patterns for elderly women in HMO and FFS settings.

DESIGN

Cancer registry data from the Surveillance, Epidemiology, and End Results (SEER) program linked to Medicare enrollment records.

SETTINGS AND PARTICIPANTS

Women aged 65 years or older residing in 11 geographic areas who were newly diagnosed as having breast cancer between 1988 and 1993.

MAIN OUTCOME MEASURES

Standardized percentage of cases diagnosed at late stages for HMO vs FFS; standardized percentage of early-stage cases undergoing initial treatment with breast-conserving surgery (BCS); and, among BCS cases, standardized percentage receiving adjuvant radiation therapy. Standardization was achieved through logistic regression, controlling for patient demographics, cancer history, county of residence, year of diagnosis, and educational attainment at the census tract level. Analyses of treatment patterns were controlled for stage at diagnosis and tumor size.

RESULTS

The HMO enrollees were less likely to have breast cancer diagnosed at late stages than FFS patients (HMO, 7.6%; FFS, 10.8%; difference, -3.2% [95% confidence interval (CI), -4.2% to -2.2 %]). Among early-stage cases, the percentages undergoing BCS were similar in HMO and FFS settings overall (HMO, 38.4%; FFS, 36.8%; difference, 1.6% [95% CI, 0.0%-3.2%]); percentages varied markedly at the individual plan level. Among women undergoing BCS, HMO enrollees were significantly more likely to receive radiation therapy but, again, results varied by plan (HMO, 69.0%; FFS, 63.7%; difference, 5.3% [95% CI, 2.9%-7.7%]). In general, use of BCS and radiation therapy was substantially higher than that found in an earlier study examining cases diagnosed between 1985 and 1989.

CONCLUSIONS

Treatment of early-stage breast cancer in HMOs often differs from local FFS patterns, but not in a consistent way. During the period of our study, elderly HMO enrollees did not appear to have systematic access problems with adjuvant radiation therapy following BCS compared with women in an FFS setting.

Trends and outcomes of outpatient mastectomy in elderly women

BACKGROUND

Considerable public attention has focused on the use of outpatient mastectomy and has resulted in numerous legislative proposals to mandate a minimum hospital stay following mastectomy. To date, only limited scientific data are available regarding the use and the outcomes of outpatient mastectomy. The purpose of this study was to provide population-based information on trends and outcomes for outpatient mastectomy in elderly women.

METHODS

Medicare data for elderly women with fee-for-service coverage were examined for trends and regional variation in the use of outpatient mastectomy. Logistic regression was used to identify patient and provider characteristics associated with having an outpatient mastectomy, and outcomes were assessed by calculating the risk of being rehospitalized and the reasons for rehospitalization.

RESULTS

From 1986 through 1995, the proportion of mastectomies performed on an outpatient basis increased from virtually 0% to 10.8%. Outpatient mastectomies were more likely to be performed on women with no coexisting health problems in hospitals that were for-profit or non-teaching or in large metropolitan statistical areas. Women undergoing outpatient mastectomy had substantially higher rates of rehospitalization within 30 days than women with a 1-day stay in the hospital. Both groups had comparable rates of rehospitalization for complications definitely related to their surgery. The percentage of women who required rehospitalization was low, and the actual number of women rehospitalized was relatively small.

CONCLUSIONS

We conclude that the risks from outpatient mastectomy are modest, although ongoing monitoring of outcomes and assessment of patient satisfaction are needed.

Breast cancer survival and treatment in health maintenance organization and fee-for-service settings

BACKGROUND

Enrollment in health maintenance organizations (HMOs) has increased rapidly during the past 10 years, reflecting a growing emphasis on health care cost containment. To determine whether there is a difference in the treatment and outcome for female patients with breast cancer enrolled in HMOs versus a fee-for-service setting, we compared the 10-year survival and initial treatment of patients with breast cancer enrolled in both types of plans.

METHODS

With the use of tumor registries covering the greater San Francisco-Oakland and Seattle-Puget Sound areas, respectively, we obtained information on the treatment and outcome for 13,358 female patients with breast cancer, aged 65 years and older, diagnosed between 1985 and 1992. We linked registry information with Medicare data and data from the two large HMOs included in the study. We compared the survival and treatment differences between HMO and fee-for-service care after adjusting for tumor stage, comorbidity, and sociodemographic characteristics.

RESULTS

In San Francisco-Oakland, the 10-year adjusted risk ratio for breast cancer deaths among HMO patients compared with fee-for-service patients was 0.71 (95% confidence interval [CI] = 0.59-0.87) and was comparable for all deaths. In Seattle-Puget Sound, the risk ratio for breast cancer deaths was 1.01 (95% CI = 0.77-1.33) but somewhat lower for all deaths. Women enrolled in HMOs were more likely to receive breast-conserving surgery than women in fee-for-service (odds ratio = 1.55 in San Francisco-Oakland; 3.39 in Seattle). HMO enrollees undergoing breast-conserving surgery were also more likely to receive adjuvant radiotherapy (San Francisco-Oakland odds ratio = 2.49; Seattle odds ratio = 4.62).

CONCLUSIONS

Long-term survival outcomes in the two prepaid group practice HMOs in this study were at least equal to, and possibly better than, outcomes in the fee-for-service system. In addition, the use of recommended therapy for early stage breast cancer was more frequent in the two HMOs.

Disenrollment of Medicare cancer patients from health maintenance organizations

OBJECTIVES

There is concern that financial incentives in health maintenance organizations (HMOs) might result in pressures to induce sicker members to disenroll. The authors compared disenrollment rates of Medicare HMO enrollees with cancer with disenrollment rates for cancer-free enrollees, using Medicare enrollment files linked to population-based tumor registry data from the Surveillance, Epidemiology, and End Results (SEER) Program.

METHODS

The authors identified all aged Medicare beneficiaries who enrolled in an HMO located in a SEER reporting area during 1985 to 1989. Time to disenrollment was analyzed using a proportional hazards model.

RESULTS

Overall, cancer patients were no more likely to disenroll than others. However, persons diagnosed with cancer after enrollment were less likely to disenroll than other persons in Independent Practice Association (IPA) mode HMOs (relative risk [RR] = 0.79). Persons diagnosed with cancer after enrollment in group- and staff-model HMOs were about equally likely to disenroll as other persons (RR = 0.91). Persons diagnosed with cancer less than 18 months before enrollment were at high risk for disenrollment from both IPA and group-/staff-model HMOs (RR = 1.47 and 1.35). There was substantial variation among HMOs in overall disenrollment rates and in RRs for disenrollment by cancer patients.

CONCLUSIONS

The low disenrollment rates of patients diagnosed after enrollment do not support the contention that features intrinsic to managed care make HMOs unattractive to the seriously ill. Monitoring of selective disenrollment could be used as a screen for possible access and quality problems.

Use of Medicare data to identify incident breast cancer cases

Surveillance, Epidemiology and End Results (SEER) data from the National Cancer Institute (NCI) provide reliable information about cancer incidence. However, because SEER data are geographically limited and have a 2-year time lag, we evaluated whether Medicare data could provide timely information on cancer incidence. Comparing Medicare women hospitalized for breast cancer with women reported to SEER, Medicare data had high specificity (96.6 percent), yet low sensitivity (59.4 percent). We conclude that Medicare hospitalization data can identify incident cases for cancers that usually require inpatient hospitalization. For cancers that often only receive outpatient treatment, such as breast cancer, additional Medicare data, such as physician bills, are needed to understand the entirety of treatment practices.

Medicare payments from diagnosis to death for elderly cancer patients by stage at diagnosis

Although extensive resources go to cancer care, national population-based data on the costs of such care at the patient level have been unavailable. Medicare payments subsequent to diagnosis of cancer for elderly enrollees with five common cancers were estimated using tumor registry data from the Surveillance, Epidemiology, and End Results Program linked to Medicare claims from 1984 to 1990. The time between diagnosis and death was divided into four phases corresponding to the clinical course of solid tumors, average payments for each phase were estimated (including payments for services not related to cancer), then phase-specific payment data were aggregated. Average payments by phase varied among cancer sites, especially in the initial care phase, where payments were highest for lung and colorectal cancers ($17,500 in 1990 dollars) and lowest for female breast cancer ($8,913). Total Medicare payments from diagnosis to death were highest for persons with bladder cancer ($57,629) and lowest for those with lung cancer ($29,184). Low payments for persons with lung cancer corresponded to brief survival times. Persons diagnosed at earlier stages incurred higher total payments between diagnosis and death than those diagnosed at later stages, reflecting their longer survival. This implies that early detection may increase total Medicare expenditures by extending beneficiaries' lives. However, Medicare payments per year of survival were lower for earlier stages. Data on Medicare payments subsequent to diagnosis of cancer are useful for identifying the cost implications of differences in treatment patterns by demographic characteristics, geography, and delivery systems; comparing the financial impact of alternative therapies; evaluating the long-term cost impacts of screening and prevention programs; and risk-adjusting payments to health plans.

Stage of cancer at diagnosis for Medicare HMO and fee-for-service enrollees

OBJECTIVES

Health maintenance organizations (HMOs) with Medicare contracts often provide cancer screening and preventive services not covered under fee-for-service. This study compared cancer patients in HMOs and fee-for-service on stage at diagnosis.

METHODS

The study examined stage at diagnosis for aged Medicare enrollees in HMOs and fee-for-service, using information from the Surveillance, Epidemiology, and End Results program, linked with Medicare enrollment files. Twelve cancer sites were investigated, and demographics, area of residence, year of diagnosis (1985 to 1989), and education at the census tract level were controlled.

RESULTS

HMO enrollees were diagnosed at earlier stages for cancers of the female breast, cervix, colon, and melanomas and at later stages for stomach cancer. There were no differences for cancers of the prostate, rectum, buccal cavity and pharynx, bladder, uterus, kidney, and ovary. HMO effects were strongest in areas with large, mature HMOs.

CONCLUSIONS

Compared with fee-for-service enrollees, HMO enrollees were diagnosed at earlier stages for cancer sites for which effective screening services are available. The earlier detection of certain cancers among HMO enrollees may result from coverage of screening services and, perhaps, promotion by HMOs of such services.

Potential for cancer related health services research using a linked Medicare-tumor registry database

The National Cancer Institute and the Health Care Financing Administration share a strong research interest in cancer costs, access to cancer prevention and treatment services, and cancer patient outcomes. To develop a database for such research, the two agencies have undertaken a collaborative effort to link Medicare Program data with the Surveillance, Epidemiology, and End Results (SEER) Program database. The SEER Program is a system of 9 population-based tumor registries that collect standardized clinical information on cases diagnosed in separate, geographically defined areas covering approximately 10% of the US population. Using a deterministic matching algorithm, the records of 94% of SEER registry cases diagnosed at age 65 or older between 1973 to 1989, or more than 610,000 persons, were successfully linked with Medicare claims files. The resulting database, combining clinical characteristics with information on utilization and costs, will permit the investigation of the contribution of various patient and health care setting factors to treatment patterns, costs, and medical outcomes.

Trends in Medicare payments in the last year of life

BACKGROUND

Increased attention is being paid to the amount and types of medical services rendered in the period before death. There is a popular impression that a greater share of resources is being devoted to dying patients than in the past. We examined trends in the proportion of Medicare expenditures for persons 65 years old or older in their last year of life to determine whether there were any changes from 1976 to 1988.

METHODS

Using Medicare program data for 1976, 1980, 1985, and 1988, we classified Medicare payments according to whether they were made for people in their last year of life (decedents) or for survivors. We also assigned expenses for care in the last year of life according to intervals of 30 days before the person's death and examined trends according to age.

RESULTS

Reflecting the large overall increase in Medicare spending, Medicare costs for decedents rose from $3,488 per person-year in 1976 to $13,316 in 1988. However, Medicare payments for decedents as a percentage of the total Medicare budget changed little, fluctuating between 27.2 and 30.6 percent during the study period. Payments for care during the last 60 days of life expressed as a percentage of payments for the last year also held steady at about 52 percent. Furthermore, the pattern of lower payments for older as compared with younger decedents also prevailed throughout the study period.

CONCLUSIONS

The same forces that have acted to increase overall Medicare expenditures have affected care for both decedents and survivors. There is no evidence that persons in the last year of life account for a larger share of Medicare expenditures than in earlier years.

Do HMOs reduce health care costs? A multivariate analysis of two Medicare HMO demonstration projects

Charge data from two Medicare HMO demonstration projects were analyzed to determine if prepaid plans achieved cost savings for enrolled beneficiaries. Fallon Community Health Plan of Massachusetts did not reduce total charges significantly for survivors in their first year postenrollment. However, the plan enjoyed reductions in total charges per month after the first year of nearly 38 percent (41 percent for Part A; 31 percent for Part B). Savings for decedents were more modest, reducing total charges per month by around 27 percent (19 percent, Part A; 68 percent, Part B). Greater Marshfield Community Health Plan of Wisconsin was not successful in controlling charges during the demonstration period. Marshfield incurred losses in the first postenrollment year for survivors due to a 38 percent increase in total charges per month (18 percent, Part A; 73 percent, Part B). In the second year postenrollment, the Marshfield plan was able to reduce losses for survivors to roughly 11 percent (-6 percent, Part A; 44 percent, Part B). For decedents, Marshfield experienced an increase in total charges per month of approximately 21 percent relative to fee-for-service comparisons, with Part B charges again much higher than those of the comparison group (47 percent).

Longitudinal patterns of Medicare use by cause of death

To study the use of health services before death for different causes, a 6-year file of Medicare use and cost data was linked to a file of death certificate information for persons dying at ages 65 years or over in 1979. Patterns of medical care use during the last years of life varied substantially by cause of death, reflecting the degree of chronicity of the disease that resulted in death and the nature of treatment. Persons dying of nephritis, chronic obstructive pulmonary disease, and diabetes mellitus incurred consistently high expenses for 6 years before death. Costs for cancer decedents were also high, especially in the last 2 years of life. Persons in their last 2 years of life have a considerable impact on Medicare expenses. An estimated 13 percent of annual Medicare expenses were attributable to persons who were within 2 years of death from heart disease and 10.7 percent to persons who were within 2 years of death from cancer.

Beneficiary selection, use, and charges in two Medicare capitation demonstrations

Findings with regard to health status, service use, and charges are presented for Medicare beneficiaries who received care under Medicare risk contracts with two health maintenance organizations from 1980 through 1982 and for fee-for-service comparison groups. Health status of plan enrollees and fee-for-service beneficiaries were compared using mortality data, preenrollment claims, and self-reported health measures. Patterns of use and expenditures during preenrollment and postenrollment periods were examined using Medicare records and data supplied by the plans.

High-cost users of medical care

Based on data from the National Medical Care Utilization and Expenditure Survey, the 10 percent of the noninstitutionalized U.S. population that incurred the highest medical care charges was responsible for 75 percent of all incurred charges. Health status was the strongest predictor of high-cost use, followed by economic factors. Persons 65 years of age or over incurred far higher costs than younger persons and had higher out-of-pocket costs, absolutely and as a percentage of income, although they were more likely to be insured.