Social/health maintenance organization and fee-for-service health outcomes over time - Hospital Payment: Beyond the Prospective Payment System

Health Care Financing Review, Winter, 1993 by Kenneth G. Manton, Robert Newcomer, Gene R. Lowrimore, James C. Vertrees, Charlene Harrington

Approximately one-third (31.9 percent) of the 900 HMO enrollees switch plans annually--more than in baseline HMO samples. S/HMO members, partly because a large proportion in two sites (40 percent and 60 percent) enrolled from the parent HMO, are stable (Harrington, Newcomer, and Preston, 1993; Newcomer, Preston, and Harrington, 1991). Among recent HMO enrollees, only the pulmonary (21.2 percent) and frail (5.2 percent) groups do not switch often. Less than 6 percent of S/HMO members in any group switch to HMOs. For the acutely ill or frail, the rate is less than 2 percent. This is consistent with HMO joiners adjusting to new plans and S/HMO members having stable plan relations.

Acutely ill S/HMO enrollees are more likely than HMO members to return to FFS (27.2 percent versus 16.5 percent), as are the healthy and the impaired enrollees. Disenrollment varies by site. The two new plans disenroll more acutely ill persons than S/HMOs in mature HMOs. There is little difference between S/HMO and HMO enrollees with respect to healthy and impaired groups. S/HMO members in the chronically ill or frail groups are less likely than HMO joiners to return to FFS.

Mortality

FFS mortality (gender and age combined) is higher for the healthy, acutely and chronically ill and lower for the impaired groups. "Case-mix standardized" values are weighted to the pooled case mix of the S/HMO and FFS populations. FFS clients enrolling in HMOs had the lowest mortality (8.1 percent). S/HMO (10.1 percent) and FFS (10.2 percent) rates are similar. Case-mix measures estimated from the pooled HSF/CAF data explain most S/HMO and FFS mortality differences. The HSF data alone explain only 82 percent of mortality differences.

STOCHASTIC HEALTH CHANGES AND MODALITY

The number of factors that can be simultaneously controlled by stratification is limited. Consequently we used a multivariate model to control for health inputs, gender, age, and coverage in examining what happens in a cohort simultaneously subjected to mortality and disability dynamics. From data available for 3 years, the difference equations were used to construct S/HMO or FFS cohort life tables. Cohort estimates reflect differences in initial case-mix distributions as well as age-dependent dynamics. To examine how disability and mortality interact in FFS and S/HMOs, we calculated three types of life tables. Table 5 presents the age-specific life expectancies and number of years expected to be lived in each case-mix group. In Tables 6 and 7, cohort health changes, mortality, and the proportion expected to be active at specific ages are calculated--starting from specific groups to adjust for initial case-mix differences. In Table 8, the effects of case-mix dynamics are removed by starting cohorts at specific ages and, holding case-mix constant, identifying S/HMO and FFS differences in mortality over age (rather than just at 75 years of age, as in Table 4).

[TABULAR DATA 4, 5, 6, & 7 OMITTED]

MORTALITY FUNCTIONS

Table 4 presents gender-specific estimates of FFS and S/HMO mortality (i.e., the [Q.sub.t]). All four have significant X2. Each is estimated with its own E) to adjust for different unobserved age-related risk factors (i.e., bias). The coefficients represent the annual probability of death (x 100) at 75 years of age. Diagonal coefficients are the probability of death for a person in a case-mix group (e.g., the probability of death for a male whose [g.sub.ik] = 1.0 in an S/HMO is 57.1 percent; in the healthy group, 2.9 percent). The relative risk of frail to healthy groups is 19.7 to 1 (compared with Table 3, 19.8 to 1.0; in baseline data the ratio is 10.5 to 1). If a person is represented by multiple profiles, off-diagonal (interaction) terms are used. For example, the mortality for a person whose health status is a mixture of the attributes of the frail and healthy groups is the weighted sum of the diagonal and interaction coefficients for the two groups.