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

PRIOR STUDIES OF HMOs

Except for the 1985 HCFA S/HMO demonstrations, there have been no prior S/HMO demonstrations. There are multiple studies of the care of elderly persons in capitated health systems (i.e., HMOs) that do not provide LTC. The following criteria have been used to assess HMO outcomes.

Most studies of Medicare HMOs examine enrollment and attrition. Riley, Rabey, and Kasper (1989) compared mortality rates for 3 HMOs with FFS for 6 years following enrollment, controlling for age, gender, and Medicaid and institutional status. HMO mortality was lower in the first year, implying favorable selection. Mortality increased to FFS levels by the second year in two plans. The third approached FFS levels over 5 years due to favorable attrition, i.e., mortality 2 years after disenrollment was higher than for continuing members. Two other studies found HMO mortality rates lower than FFS mortality rates. One examined mortality for 2 years following enrollment (U.S. General Accounting Office, 1986). In the other study, mortality in an Oregon HMO was compared with State mortality rates over 6 years-adjusted for age, gender, and smoking or non-smoking status (McFarland et al., 1986). These studies did not control for functional status. Therefore, mortality findings are ambiguous because they can be interpreted as either an indirect cost measure (i.e., high terminal care costs) or a health measure.

In the Medicare competition evaluation, the service use of HMO and FFS clients were compared for 2 years preenrollment and mortality rates were compared for 2 years post-enrollment. Prior use was lower in 13 of 14 HMOs; mortality lower in 12 of 17 HMOs; both results suggest favorable selection for HMOs. Disabled persons disenrolled from HMOs at higher rates (Brown, 1988). In addition, quality of care was assessed (Langwell and Hadley, 1989). Care access (controlled for self-reported symptoms) was measured by whether a health professional was seen, and baseline and follow-up health status were compared for all clients. No significant differences were found between HMOs and FFS regarding care access or health change. HMO records were more complete, and contained more reports on tests and immunizations. There were few differences in drugs prescribed, history taking, or exams for those with congestive heart failure. Some practice patterns varied (e.g., HMO physicians hospitalized unstable angina cases more often). Though an improvement over assessing mortality differences, the quality of care indexes are partly confounded with service use. None of the HMO studies examined functional change as an outcome.

CASE SELECTION

Our analysis included all enrollees in 4 S/HMOs (n = 10,838) in June 1986 (in Long Beach, California and Portland, Oregon) or December 1986 (in Brooklyn, New York and Minneapolis, Minnesota), and samples (n = 16,664) of non-institutionalized Medicare FFS clients 65 years of age or over living in those 4 areas. FFS clients enrolling in HMOs during the study were followed. This HMO group of clients (i.e., persons self-selected after 1986) differs from 3 HMO samples of 1,000 persons each enrolling in HMOs from Medicare FFS in 1985 and 1986. Data collected on the HMO samples included a health screening form (HSF), prior costs (Manton (et al., 1994), reasons for enrollment (Newcomer, Harrington, and Friedlob, 1990), and mortality and disenrollment (Manton et al., unpublished), but did not include health changes or post-enrollment service use. Those data were obtained for all members in the FFS samples--including persons entering HMOs during the study. Thus, the HMO samples were not analyzed, but FFS clients shifting to HMOs during the study were.