Leveling the playing field: managed care enrollment and hospital use, 1987-1996

The paradox of the not-for-profit hospital

This quantitative research study assesses the organizational characteristics, market factors, and performance of not-for-profit hospitals in the United States. These results have managerial implications related to hospital efficiency, organizational performance, and the role of not-for-profit hospitals within local communities. The study has policy implications on access to clinical services within local communities, the availability of charity care, and the long-term viability of the not-for-profit health care industry due to potential bankruptcy and closure. This study clearly demonstrates that not-for-profit hospital managers are faced with declining profitability and are challenged to reduce hospital-operating expenses while meeting their charitable mission. Additionally, the greater size and increased clinical complexity of not-for-profit hospitals are increasing organizational overhead. In many cases, the increased clinical complexity is a commitment to the organizational mission of providing a full range of services to the community. From a policy perspective, the study suggests that not-for-profit hospitals have aging facilities and reduced cash flow due to lower profit margins. As a result, many not-for-profit hospitals face potential bankruptcy and closure. This study clearly documents a threat to the provision of charity care in local communities and the long-term viability of the not-for-profit health care industry in the United States.

Health expenditures for privately insured adults enrolled in managed care gatekeeping vs indemnity plans

OBJECTIVES

We assessed the ability of managed care gatekeeping strategies (i.e., requiring a designated primary care provider to authorize referrals) to control health care costs in the mid-1990s.

METHODS

We analyzed expenditure data from 8195 privately insured adults sampled in the nationally representative 1996 Medical Expenditure Panel Survey. Managed care gatekeeping plan enrollees included those in health maintenance organizations and other plans requiring a primary care gatekeeper. All others were considered indemnity plan enrollees.

RESULTS

In 1996, total per capita annual health expenditures for adult gatekeeping enrollees were about $50 less than those of indemnity enrollees, primarily owing to lower out-of-pocket expenditures. After multivariate adjustment, mean per capita expenditures were approximately 6% lower for gatekeeping enrollees than for indemnity enrollees.

CONCLUSIONS

In the private sector, gatekeeping strategies resulted in modest cost savings over indemnity plans.

A comparison of inpatient severity, average length of stay, and cost for traditional fee-for-service medicare and medicare HMOs in Florida

This research compares the mean severity level, length of stay, and cost of Medicare health maintenance organization (HMO) and Medicare fee-for-service (FFS) inpatients. The results suggest Medicare HMOs have healthier inpatients and shorter lengths of stay, but more costly per-day utilization. These findings are contrary to the assumption that HMOs reduce daily utilization.

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.

Health Care for Children and Youth in the United States: 2002 Report on Trends in Access, Utilization, Quality, and Expenditures

OBJECTIVE

To examine changes in insurance coverage, health care utilization, perceived quality of care, and expenditures for children and youth in the United States using data from 1987-2001.

METHODS

Three national health care databases serve as the sources of data for this report. The Medical Expenditure Panel Survey (1996-2001) provides data on insurance coverage, utilization, expenditures, and perceived quality of care. The National Medical Expenditure Survey (1987) provides additional data on utilization and expenditures. The Nationwide Inpatient Sample (1995-2000) from the Healthcare Cost and Utilization Project provides information on hospitalizations.

RESULTS

The percent of children uninsured for an entire year declined from 10.4% in 1996 to 7.7% in 1999. Most changes in children's health care occurred between 1987 and the late 1990s. Overall utilization of hospital-based services has declined significantly since 1987, especially for inpatient hospitalization. Several of the observed changes from 1987 varied significantly by type of health insurance coverage, poverty status, and geographic region. Quality of care data indicate some improvement between 2000 and 2001, which varies by insurance coverage. Overall, mean length of stay of hospitalizations did not change significantly from 1995 to 2000, but changes in the prevalence of hospitalizations and the length of stay associated with age-specific diagnoses were evident during this time period.

CONCLUSIONS

Health care for children and youth has changed significantly since 1987, with most of the changes occurring between 1987 and 1996. Insurance coverage has improved, the site of care has shifted toward ambulatory sites, hospital utilization has declined, and expenditures on children as a proportion of total expenditures have decreased. Variation in these changes is evident by insurance status, poverty, and region.

Does gatekeeping control costs for privately insured children? Findings from the 1996 medical expenditure panel survey

OBJECTIVE

Gatekeeping requirements were widely adopted by health insurers in an attempt to control costs in the mid-1990s, but empirical evidence demonstrating decreased health expenditures for children enrolled in such plans is lacking.

METHODS

We analyzed data from 3254 children with private health insurance sampled in the 1996 Medical Expenditure Panel Survey (MEPS) to compare total per capita health expenditures among gatekeeping versus indemnity plan enrollees. This sample represents 40.4 million privately insured American children. Total expenditures were defined as payments from all sources, including third-party and out-of-pocket payments, but excluding administrative costs. MEPS data are based on information provided by patients, health care providers, and hospitals. Gatekeeping plans included all children enrolled in health maintenance organizations or other plans requiring a primary care gatekeeper. All others were considered indemnity plan enrollees.

RESULTS

Mean total per capita annual expenditures for children in gatekeeping versus indemnity plans differed by <1% (887 dollars vs 881 dollars, respectively). Third-party payments by gatekeeping plans on behalf of their beneficiaries were 636 dollars versus 595 dollars by indemnity plans. Out-of-pocket payments were on average 62 dollars less for gatekeeping enrollees than for indemnity enrollees. After multivariate adjustment, mean per capita expenditures were approximately 4% lower for gatekeeping enrollees than for indemnity enrollees.

CONCLUSION

In 1996, total per capita annual health expenditures for children in gatekeeping plans were approximately 8 dollars less than for those in indemnity plans. These data indicate that gatekeeping is not an effective cost-containment method for children.

Health plan quality-of-care information is undermined by voluntary reporting

BACKGROUND

Most health services in the United States are delivered by managed care organizations (MCOs). Publicly available, plan-specific performance information is required to adequately assess healthcare quality provided. Using women's health indicators, we compared performance results for MCOs and evaluated whether those MCOs that publicly report quality-of-care (QOC) results demonstrate better QOC than those plans that restrict public access to data.

METHODS

Data from the Health Plan Employer Data and Information Set (HEDIS) for commercial MCOs in 1998 were analyzed for women's QOC indicators. Plan-specific, regional, and national performances were analyzed and results compared to established benchmarks. Public-reporting plans were compared to plans that restrict access to QOC information. Linear regression was used to identify determinants of health plan performance including public release of information.

RESULTS

Commercial MCOs had wide variations in QOC indicators and, on average, failed to attain national health goals for most women's health indicators analyzed. Plans that restricted public access to QOC information had poorer performance than those that did not (p<0.05). Results suggest that whether a plan publicly releases its performance information is highly associated with health plan performance even after taking into account other factors.

CONCLUSIONS

The voluntary aspect of reporting and the ability of health plans to restrict public access is allowing poorer performing health plans to escape public scrutiny. Variations in QOC have clinical significance and, if publicly available, would enable individuals to select high-quality healthcare products. The ability of health plans to restrict public information is not consistent with the 1973 Health Maintenance Organization Act requiring public information on health plan quality. A national strategy to ensure that QOC information is available on all healthcare systems is past due.

U.S. trends in obstetric procedures, 1990-2000

BACKGROUND

During the 1980s the rate of obstetric procedures performed during delivery rose precipitously. This study follows the use of obstetric procedures through the 1990s to explore whether the patterns witnessed in the previous decade continued through the next.

METHODS

Data on total obstetric procedures and eight specific procedures (cesarean section, medical and surgical induction of labor, other artificial rupture of membranes, episiotomy, repair of current obstetric laceration, vacuum extraction, forceps delivery) were obtained from the National Hospital Discharge Survey, a nationally representative survey of discharges from short-stay non-Federal hospitals. Approximately 32,000 records for women with deliveries were included in the survey each year.

RESULTS

The total rate of all obstetric procedures did not change significantly from 1990 through 2000. However, as during the 1980s, rates increased for induction of labor, vacuum extraction, and repair of current obstetric laceration. Rates decreased for forceps delivery and episiotomy, also continuing 1980s trends. After a long period of increase, the rate of cesarean section declined from 1988 to 1995 but increased again from 1995 to 2000.

CONCLUSIONS

Unlike the 1980s, the overall rate of obstetric procedures did not increase from 1990 to 2000, but the mix of obstetric procedures performed continued to change during this period.

The practice of nurse-midwifery in the era of managed care: reports from the field

OBJECTIVE

The purpose of this paper is to describe the reports of certified nurse-midwives (CNMs) about how changes in the financing and organization of health care in the late 1990s influenced their ability to serve vulnerable populations and provide a woman-centered, prevention-oriented midwifery model of care.

METHODS

A 13-page survey was mailed to all CNMs ever certified by the American College of Nurse-Midwives (N = 6365) in July 1998. The survey included closed- and open-ended questions. A total of 2405 CNMs responded: of these, 2089 were in clinical practice during the study period (1997-98) and 82% of the 2089 (N = 1704) wrote responses to the open-ended questions and were included in the qualitative database. We present responses to the closed-ended questions about seven domains of practice and elaborate on three major themes identified through content analysis of the qualitative data.

RESULTS

The majority (57%) reported that the changes in the larger health care environment had influenced their practices during 1997-98. The effects most frequently reported were 1) increased client loads (31%); 2) altered style of practice (30%): 3) inability to serve the same populations; (20%); 4) decreased client loads (20%); and 5) increased administrative duties (17%). Three major themes were identified and elaborated upon in the qualitative data: 1) challenges to the style of midwifery practice related to the managed care environment; 2) the loss of socially and economically at-risk women from CNMs' client base; and 3) barriers to high quality and comprehensive services for women.

CONCLUSIONS

During the late 1990s as managed care was expanding and health systems were merging, a significant number of CNMs in the field described threats to their ability to sustain economically viable practices and a style of care consistent with the woman-centered, prevention-oriented midwifery model.

Managed care: a view from Europe

This article summarizes recent developments in the United Kingdom, the Netherlands, Switzerland, and the new Baltic states that reflect the influence of US managed care concepts and practices. We emphasize (a) developments in restructuring traditional health insurance mechanisms by shifting premium and out-of-pocket burdens to consumers so as to constrain demand and costs and (b) reliance on prospective hospital budgets and case management by primary physicians. Social insurance mechanisms and universal coverage remain national tasks as well as basic components of the social structure of most European countries. Full open-market competition between traditional sick funds and private insurance companies and the introduction of for-profit MCOs beholden to their shareholders appears unlikely on other than an experimental basis. Increased competition between providers may well result from the new right of insurers and payers to contract with medical care providers of their choice. It remains to be shown how far these experiments, which differ substantially between the countries examined, will succeed in their objectives and become permanent features of their national systems.