The effect of medicare health maintenance organizations on hospitalization rates for ambulatory care-sensitive conditions.

OBJECTIVE: The objective of this study was to estimate the effect of Medicare Health Maintenance Organization (HMO) enrollment on hospitalization rates and total inpatient days for ambulatory care-sensitive conditions (ACSCs) after controlling for selection. RESEARCH DESIGN: Simultaneous equations using a discrete factor selection model are used to estimate the probability of HMO enrollment, hospitalization rates, and total inpatient days for ACSCs. SUBJECTS: Enrollment data on Medicare beneficiaries in California were linked to hospital discharge data from the California Office of Statewide Health Planning and Development for January through December 1996. The following beneficiaries were excluded: 1) end-stage renal disease, 2) under 65 years of age, 3) not covered by both Medicare Part A and Part B, 4) switched between HMOs and fee-for-service (FFS), and 5) switched between HMOs. The sample was stratified by age, gender, race, county, disability, Medicaid eligibility, HMO status, and death. A 2% random sample from the 4 California counties with the largest Medicare enrollment yielded 10,448 HMO enrollees and 11,803 FFS beneficiaries. RESULTS: Using a discrete factor selection model, we estimated the rate of ACSC hospitalizations among FFS beneficiaries would decline from 51.2 to 44.2 per 1000 if all FFS beneficiaries joined an HMO. Similarly, the mean total inpatient days for ACSC hospitalizations would be reduced from 7.5 days to 5.1 days if all FFS beneficiaries joined an HMO. CONCLUSIONS: After controlling for selection, Medicare HMO enrollees have lower hospitalization rates and fewer total inpatient days for 15 ACSCs than Medicare FFS beneficiaries. These findings suggest selection of healthier beneficiaries into HMOs does not completely explain their lower rates of ACSC hospitalization.

The effect of HMOs on the inpatient utilization of medicare beneficiaries.

OBJECTIVE: To determine the effect of joining HMOs (health maintenance organizations) on the inpatient utilization of Medicare beneficiaries. DATA SOURCES: We linked enrollment data on Medicare beneficiaries to patient discharge data from the California Office of Statewide Health Planning and Development (OSHPD) for 1991-1995. DESIGN AND SAMPLE: A quasi-experimental design comparing inpatient utilization before and after switching from fee-for-service (FFS) to Medicare HMOs; with comparison groups of continuous FFS and HMO beneficiaries to adjust for aging and secular trends. The sample consisted of 124,111 Medicare beneficiaries who switched from FFS to HMOs in 1992 and 1993, and random samples of 108,966 continuous FFS beneficiaries and 18,276 continuous HMO enrollees yielding 1,227,105 person-year observations over five years. MAIN OUTCOMES MEASURE: Total inpatient days per thousand per year. PRINCIPAL FINDINGS: When beneficiaries joined a group/staff HMO, their total days per year were 18 percent lower (95 percent confidence interval, 15-22 percent) than if the beneficiaries had remained in FFS. Total days per year were reduced less for beneficiaries joining an IPA (independent practice association) HMO (11 percent; 95 percent confidence interval, 4-19 percent). Medicare group/staff and IPA-model HMO enrollees had roughly 60 percent of the inpatient days per thousand beneficiaries in 1995 as did FFS beneficiaries (976 and 928 versus 1,679 days per thousand, respectively). In the group/staff model HMOs, our analysis suggests that managed care practices accounted for 214 days of this difference, and the remaining 489 days (70 percent) were due to favorable selection. In IPA HMOs, managed care practices appear to account for only 115 days, with 636 days (85 percent) due to selection. CONCLUSIONS: Through the mid-nineties, Medicare HMOs in California were able to reduce inpatient utilization beyond that attributable to the high level of favorable selection, but the reduction varied by type of HMO.

Inpatient utilization by dual Medicare-Medicaid eligibles in Medicare risk HMOs and fee for service, California, 1991-1996.

Inpatient use among dual Medicare-Medicaid eligible beneficiaries in California Medicare HMOs and fee-for-service plans from 1991 to 1996 was compared, using a unique dataset that links Medicare enrollment data to inpatient discharge data. Dual eligibles in HMOs were found to have lower discharge rates, shorter lengths of stay, and fewer inpatient days than dual eligibles in the traditional fee-for-service system. Both, however, had higher discharge rates and inpatient days than non-dual-eligible beneficiaries. The results are consistent with previous findings documenting the high cost of dual eligibles, with the lower use in HMOs likely the result of differences in beneficiary characteristics and delivery of care between systems.