S/HMO Versus TEFRA HMO Enrollees: Analysis of Expenditures

Health Care Financing Review, Summer, 1999 by Bryan Dowd, Steve Hillson, Tom VonSternberg, Lucy Rose Fischer

Two measures of self-reported general health status were available in the data. The first question asked "Compared to other persons your age, would you say your health is: excellent (= 1), good (= 2), fair (= 3), or poor (= 4)?" The second question asked: "Compared to 1 year ago, how would you rate your health in general now: Better now than 1 year ago (= 1), about the same (= 2), or worse than 1 year ago (= 3)?" Thus, for both measures, higher scores indicate worse health status. The survey also included information on marital status and income.

The S/HMO surveys used in this analysis were mailed from January to December, 1990, and the TEFRA HMO surveys were all mailed in February, 1990. Of the 2,765 eligible enrollees, there were 2,444 usable responses, for an effective response rate of 88.4 percent. Of the 5,406 TEFRA HMO enrollees, there were 5,110 usable surveys, for an effective response rate of 94.5 percent. Thus, the total number of observations available for the analysis was 5,110 TEFRA HMO enrollees plus 2,443 S/HMO enrollees, or 7,553.

Expenditure Data

Data on expenditures come from the GHI database and are available for all TEFRA HMO and S/HMO enrollees. Expenditure data were available for five categories of services: (1) inpatient services; (2) nursing home services; (3) non-inpatient services covered by both the S/HMO and TEFRA HMO; (4) all services covered by both the S/HMO and TEFRA HMO; and (5) all services, including those covered only by the S/HMO. The expenditure data were subjected to two types of audits, audits for benefit errors (i.e., coordination of benefits) and audits for clerical accuracy (e.g., medical coding and dates of service).

Data for the TEFRA HMO enrollees cover 1 year before and 1 year after February, 1990. Data for the S/HMO enrollees cover 1 year before and 1 year after the date of the survey, which could range from January, 1990, to December, 1990.

Expenditures were summed over the 2 years of data. Two years of expenditure data provide an important advantage over 1 year, because expenditures are less influenced by random illnesses and injuries. To be sure that the expenditure data were complete, a 9-month lag past the close of an observation period was allowed for expenditure data to appear in the GHI expenditure data system.

The expenditure data for contracted services (inpatient care and other services obtained from providers outside GHI) represent actual amounts paid for services. Expenditures for services obtained from providers within GHI were imputed, using a fee schedule developed by GHI for internal management purposes. The same fee schedule was applied to services used by both S/HMO and TEFRA HMO enrollees.

Member Records

Member records provided data indicating whether the individual died or disenrolled from the health plan during the second year of the study. Both death and disenrollment during the second year are controlled in our regressions, despite the fact that attrition from both the S/HMO and TEFRA HMO samples was minimal. In our sample of 7,553 enrollees, 20 S/HMO enrollees and 15 TEFRA HMO enrollees died during the second year of observation. The disenrollment rate was approximately 0.1 percent in both samples (N = 20 in the S/HMO and N = 72 in the TEFRA HMO).