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

This evaluation is designed to assess the differences between S/HMOs and standard FFS care, and not those between S/HMOs and HMOs. During the demonstration, the benefits which distinguish S/HMOs from HMOs which provide extended care were reduced (Newcomer, Preston, and Harrington, 1991). Nonetheless, S/HMOs provide LTC services which are not reimbursed in extended care Medicare HMOs. Thus, changes in S/HMO benefits were not structural, but specific management decisions as service costs became clear. Data were collected to assess how S/HMO services changed relative to HMO services.

Persons applying to a S/HMO could be nursing home certifiable under State Medicaid criteria, but could not be in a nursing home. They may have previously been in a nursing home, or be considering entering a home. Consequently, nursing home residents are also out of scope for FFS samples. This exclusion's effect varies by age and gender. Nursing home residence is about 25 percent for persons 85 years of age or over, according to the 1985 National Nursing Home Survey (Hing, Sekscenski, and Strahan, 1989). Rates are higher for females and the oldest-old, and vary by health (e.g., about 45 percent of nursing home residents in 1985 had "dementia"). Thus, the exclusion differentially affects females, the very old, and persons with specific medical problems.

Response Rates and Biases

Non-response in the FFS sample can bias estimates of case-mix distributions. The FFS response rate for the HSF was 80.5 percent. The HSF response rate was 98.3 percent for S/HMOs because plans were required to screen persons before enrollment, though small numbers of enrollees initially received a comprehensive assessment form (CAF) if impairments were known to exist. Several persons died while applying. Thus, instead of defining S/HMO enrollees as only those with HSFs, persons were counted if they had received CAFs, had Medicare service use data, and were identified on Medicare records as a S/HMO enrollee.

Studies of health surveys (National Center for Health Statistics, 1966; Manton, Stallard, and Woodbury, 1991) find that elderly non-respondents are frailer and use more services than respondents. This is assessed in the evaluation by comparing the average costs of all Medicare-eligible persons in the catchment area to the average costs of FFS sample respondents. The average costs for the Medicare population (after institutionalized persons are removed) are 15 percent higher than those for sample respondents. Because Medicare costs are correlated with health and functional status, this suggests that FFS sample respondents are, on average, healthier and less impaired than the total Medicare population in each site (Manton et al., 1994). This bias should be against demonstrating favorable enrollment in S/HMOs. In addition, there is a "guaranteed" time bias in that terminally ill persons (those with an average of 3 months to live) are unlikely to change care providers, i.e., enroll in S/HMOs. To eliminate the comparable group from the FFS sample, we identified persons who died before the end of the interview period from Medicare records and divided them into two groups. FFS non-respondents dying before the median interview date (about 6 months; n = 765) in a site were excluded as terminal cases. Persons dying after that date are included and their characteristics imputed from the characteristics of respondents. This adjustment is most important for prior cost analyses (Manton et al., 1994). The vital status of all persons was determined from Medicare records. S/HMO and HMO enrollment and disenrollment dates were determined from group health membership files mapped to Medicare Automated Data Retrieval System files containing data on Medicare Part A and B service use.