Utilization, costs, and access to primary care in fee-for-service and managed care plans

This study compares access to primary care, utilization, and costs among enrollees in four forms of managed care and an indemnity plan. We use 1996 data from a commercial insurer. Most managed care enrollees had better access to primary care services than indemnity enrollees. This access was associated with a generally lower rate of preventable hospitalization. Per capita inpatient costs were notably lower in managed care plans than in the indemnity plan. We describe how health care managers can use readily available administrative data and straightforward statistical techniques to enhance routine monitoring for quality and costs. Policy makers can use this approach to identify health services trends, and to evaluate access to health services for individuals enrolled in various benefit plan types.     

Rural-Urban Differences in Health Care Benefits of a Community-Based Sample of At-Risk Drinkers

CONTEXT: Different types of health plan cost-containment strategies (eg, gatekeeping, selective contracting, and cost-sharing) may affect the utilization of behavioral health services differently in urban and rural areas. PURPOSE: This research compares the cost-containment strategies used by the health plans of insured at-risk drinkers residing in rural and urban areas. METHODS: A screening instrument for at-risk drinking was administered by phone to approximately 12,000 residents of 6 southern states; 442 at-risk drinkers completed 4 interviews over a 2-year period and consented to release insurance and medical records. Two thirds of the sample (n=294) were insured during the last 6 months of the study. In 1998, health plan characteristics were successfully collected for 217 (72.3%) of the insured at-risk drinkers, representing 113 different health plans and 206 different policies. FINDINGS: Compared with urban at-risk drinkers, rural at-risk drinkers were significantly less likely to be enrolled in a health plan with gatekeeping policies for both behavioral health (P = .001), and physical health (P = .031). Compared with urban enrollees, rural enrollees were significantly more likely to pay deductibles (P = .042), to pay coinsurance for physical health services (P = .002), and to have limits placed on physical health services use (P = .067), but they were less likely to pay copayments for physical health (P = .046). Rural enrollees were less likely to face higher copayments (P = .007) and higher coinsurance (P = .076) for mental health than for physical health, compared to urban enrollees. CONCLUSIONS: Because rural residents were more likely to be enrolled in indemnity plans and less likely to be enrolled in health maintenance organizations, rural at-risk drinkers were enrolled in plans that relied less on supply-side cost-containment strategies and more on demand-side cost-containment strategies targeting physical health service use, compared with their urban counterparts. Rural at-risk drinkers were less likely to be enrolled in health plans with greater cost-sharing for mental health than for physical health compared to urban at-risk drinkers.     

Evaluation of the Effect of a Consumer-Driven Health Plan on Medical Care Expenditures and Utilization

Objective. To compare medical care costs and utilization in a consumer-driven health plan (CDHP) to other health insurance plans.
Study Design. We examine claims and employee demographic data from one large employer that adopted a CDHP in 2001. A quasi-experimental pre–post design is used to assign employees to three cohorts: (1) enrolled in a health maintenance organization (HMO) from 2000 to 2002, (2) enrolled in a preferred provider organization (PPO) from 2000 to 2002, or (3) enrolled in a CDHP in 2001 and 2002, after previously enrolling in either an HMO or PPO in 2000. Using this approach we estimate a difference-in-difference regression model for expenditure and utilization measures to identify the impact of CDHP.
Principal Findings. By 2002, the CDHP cohort experienced lower total expenditures than the PPO cohort but higher expenditures than the HMO cohort. Physician visits and pharmaceutical use and costs were lower in the CDHP cohort compared to the other groups. Hospital costs and admission rates for CDHP enrollees, as well as total physician expenditures, were significantly higher than for enrollees in the HMO and PPO plans.
Conclusions. An early evaluation of CDHP expenditures and utilization reveals that the new health plan is a viable alternative to existing health plan designs. Enrollees in the CDHP have lower total expenditures than PPO enrollees, but higher utilization of resource-intensive hospital admissions after an initially favorable selection.     

Health care expenditures after introduction of a gatekeeper and a global budget in a Swiss health insurance plan

STUDY OBJECTIVES: To assess whether the introduction of "managed care" (capitated budget and utilisation control by general practitioners) in a Swiss health insurance plan caused a selective disenrolment of plan members, and whether it achieved its goal of reducing health care expenditures. DESIGN: Controlled before-after analysis of health insurance claims. SETTING: Health insurance plan of the University of Geneva, Switzerland, which introduced managed care at the end of 1992, and comparison plan, which reimbursed health care expenditures without setting a budget or controlling access. PARTICIPANTS: Analysis of self selection: university plan members who accepted (3993) or refused (659) transfer to managed care. Analysis of change in expenditures: cohorts of persons continuously enrolled in the university (1575) and comparison (3384) plans in 1992 and 1993. MAIN RESULTS: During 1992, the year before the transformation of the university plan, persons who refused managed care had generated 35% higher expenditures than those who accepted managed care (p < 0.001). Between 1992 and 1993, expenditures per member decreased by 9% in the university cohort and increased by 11% in the comparison cohort (p = 0.004). Technical procedures (laboratory tests, physical therapy, drugs) decreased most in the university plan. No impact on hospital admissions was detected. CONCLUSIONS: Introduction of gatekeeping and budget management by physicians caused a favourable self selection process for the university plan. In addition, the managed care plan achieved a substantial decrease in overall health care expenditures in its first year of operation, chiefly by reducing outlays for technical procedures.

 

     

Who is enrolled in for-profit vs. nonprofit Medicare HMOs?

We compare the characteristics of enrollees in for-profit and nonprofit Medicare health plans using nationwide data from the 1996 Medicare Current Beneficiary Survey. We find few differences in overall health status, limitations in activities of daily living (ADLs), or history of chronic disease. However, older Americans enrolled in for-profit plans are substantially poorer and less educated than those enrolled in nonprofit plans, are more likely to have joined their plan recently, and are more likely to have joined a plan with the expectation of reducing their out-of-pocket health care costs.     

Effect of a gatekeeper plan on health services use and charges: a randomized trial.

A randomized trial was conducted to determine the effectiveness of a health care plan which uses physicians as gatekeepers to control health services use and charges. New enrollees in United Healthcare (UHC), an independent practice association, were randomly assigned to the standard UHC plan requiring a gatekeeper, or to an alternate plan with equal benefits but without a gatekeeper. Individuals in both plans were similar in demographic characteristics, perceived health status, and other health insurance coverage. The gatekeeper plan had 6 percent lower total charges per enrollee than the plan without a gatekeeper. There were minor differences in hospital use and charges. Ambulatory charges were $21 lower per person per year in the plan with a gatekeeper (95% CI = -39.9, -2.1) and these were due to .3 fewer visits to specialists (95% CI = -0.50, -0.10). We conclude that a health plan which incorporates incentives and penalties for physicians to act as gatekeepers can reduce the cost of ambulatory services by limiting specialist visits.     

Moving beyond the typologies of managed care: the example of health plan predictors of screening mammography

OBJECTIVES: To develop a framework of factors to characterize health plans, to identify how plan characteristics were measured in a national survey, and to apply our findings to an analysis of the predictors of screening mammography. DATA SOURCE: The primary data were from the 1996 Medical Expenditure Panel Survey. STUDY DESIGN: Women ages 40+, with private insurance, and no history of breast cancer were included in the study (N = 2,909). We used multivariate logistic regression to estimate mammography utilization in the past two years relative to health plan and demographic factors. Health plan measures included whether there is a defined provider network, whether coverage is restricted to a network, use of gatekeepers, level of cost containment, copayment and deductible amounts, coinsurance rate, and breadth of benefit coverage. PRINCIPAL FINDINGS: We found no significant difference in reported mammography utilization using a dichotomous comparison of individuals enrolled in managed care versus indemnity plans. However, women in health plans with a defined provider network were more likely to report having received a mammogram in the past two years than those without networks (adjusted OR= 1.21, 95 percent CI = 1.07-1.36), and women in gatekeeper plans were more likely to report receiving mammography than those without gatekeepers (adjusted OR = 1.18, 95 percent CI = 1.03-1.36). Restricted out-of-network coverage, use of cost containment, enrollee cost sharing, and breadth of benefit coverage did not appear to affect mammography use. CONCLUSIONS: It is important to examine the effect of individual health plan components on the utilization of health care, rather than use the traditional broader categorizations of managed versus nonmanaged care or simple health plan typologies.     

Impact of hepatitis A vaccination on health care utilization in the United States, 1996-2004

BACKGROUND: Since 1996, hepatitis A vaccine has been recommended for persons at risk for infection and children living in communities with the highest disease rates. In 1999, this recommendation was expanded to include all children in 17 states with high incidence compared to a national baseline period. Reported hepatitis A incidence has decreased substantially since 1999; however, comprehensive data on changes in hospital and outpatient utilization have not been reported. OBJECTIVE: To analyze a health insurance claims database to examine impacts of the hepatitis A vaccination program on medical visits and associated expenditures. METHODS: We conducted a retrospective study of the 1996-2004 Medstat MarketScan databases, which include enrollees of more than 100 health insurance plans offered by approximately 40 large employers each year, using 1996 and 1997 as the pre-vaccination baseline. Trends in rates of medical care visits were analyzed using Poisson regression method. RESULTS: From the pre-vaccination era to 2004, hospitalizations due to hepatitis A declined by 68.5% (from 0.81 to 0.26 per 100,000 population, P<0.001) and ambulatory visits declined by 41.5% (from 12.9 to 7.5 per 100,000 population, P<0.001). Ambulatory visits declined in all age groups, with the greatest declines among children<18 years old. Declines were greater among enrollees who resided in the 17 vaccinating states (58.5%) than those in non-vaccinating states (32.7%, P<0.001). After adjusting to the US population, using data derived from a privately insured population, total estimated direct medical expenditures for hepatitis A-related hospitalizations and ambulatory visits declined by 68.1%, from an average of $29.1 million in 1996 and 1997 to $9.3 million in 2004. CONCLUSIONS: Since the introduction of the hepatitis A vaccination program, hospitalizations, ambulatory visits, and their associated expenditures due to hepatitis A disease have declined substantially among all age groups across the US. Greater declines were seen in the 17 states with vaccination recommendations for hepatitis A.     

Switching Swiss enrollees from indemnity health insurance to managed care: the effect on health status and stisfaction with care.

OBJECTIVES. In 1992, most members of a Swiss indemnity health insurance plan were automatically transferred into a newly created managed care organization. This study examined whether this semivoluntary change affected enrollees' health status and satisfaction with care. METHODS. Three groups of enrollees were compared: 332 plan members who accepted the switch (managed care joiners); 186 plan members who opted to maintain indemnity coverage (non-joiners); and 296 persons continuosly enrolled in another indemnity plan (indemnity plan members). Health status, health related behaviors, and satisfaction with care received in the previous year were surveyed at baseline and 1 year later. RESULTS. Health status remained unchanged in all three groups. Smoking prevalence decreased among managed care joiners but remained constant in the other groups. Satisfaction with insurance coverage increased between baseline and follow-up in managed care joiners, but decreased in nonjoiners and indemnity plan members. The latter groups had higher satisfaction with health care, particularly with continuity of care. CONCLUSIONS. A semivoluntary switch from indemnity health insurance to managed care reduced satisfaction with health care but increased satisfaction with insurance coverage. There were no changes in self-perceived health status.     

The relation between selective contracting and healthcare expenditures in private health insurance plans in the United States

Many healthcare systems, including The Netherlands, Germany and Switzerland, have incorporated elements of managed competition, whereby insurers compete for enrollees in a marketplace organized or facilitated by a government or governing entity. In these countries, managed competition was introduced with the idea that the system would contain cost growth while maximizing value for consumers and employers. An important mechanism to control costs is selective contracting: the process of contracting providers into a network and offer insurance packages with varying levels of provider coverage. In these systems, enrollees are expected to choose lower cost plans which offer access to only contracted providers in the network. The questions is, however, if restricting provider choice leads to reduced healthcare expenditures.In the United States, enrollees often have a choice between plans with restricted networks of providers and plans that offer more provider choice, where care outside the contracted network of providers is (partly) covered. The purpose of this study is to understand whether insurance plans with restrictions on provider access in the United States have reduced healthcare expenditures and to identify the mechanism by which that reduction occurred. We used data from the Medical Expenditure Panel Survey (MEPS), a nationally representative sample of families and individuals. We estimated expenditures for enrollees in restricted network plans using two-part models and generalized linear models. We found that restricted network plans, on average, save $761 per enrollee.Our results suggest that cost savings due to restricted network plans are largely a result of price reductions rather than utilization reductions, although both play a role in cost savings. When introducing reforms shifting from a supply‐oriented to a demand‐oriented health care system, these findings might be worth considering by other countries.     

Rural-Urban Differences in Health Risks, Resource Use and Expenditures Within Three State Medicaid Programs: Implications for Medicaid Managed Care

This study uses Medicaid claims data for income-eligible enrollees in California, Georgia and Mississippi to compare expenditures, resource usage and health risks between residents of rural and urban areas of the states. Resource use is measured using the Resource Based Relative Value Scale (RBRVS) system for professional services, hospital days and outpatient facility visits; it also is valued at private insurance reimbursement rates for the states. Health risks are measured using the diagnosis-based Adjusted Clinical Group system. Resource use is compared on a risk-adjusted basis with the use of urban Medicaid enrollees as the benchmark. We find that actual expenditures for rural care users are lower than for urban care users. However, because the proportion of Medicaid enrollees who use care is higher in rural than in urban areas in all three states, expenditures per rural enrollee are not consistently lower. Case mix is more resource intensive for rural compared to urban residents in all three states. Although resource usage is not systematically lower overall for rural enrollees, on a risk-adjusted basis they tend to use less hospital resources than urban enrollees. Capitation rates based on historical per enrollee expenditures would not appear to under-reimburse managed care organizations for the care of rural as opposed to urban residents in the study states.     

Factors related to the use of ambulatory mental health services in three provider plans

The use of ambulatory mental health (MH) services by adults was studied in three provider plans: Blue Cross (BC), Group Health Cooperative (GHC) and United Healthcare (UHC), an experimental new plan in which a patient's primary care physician managed all of his care. Approximately 8.3% of the enrollees in each plan had some MH use in the 18 months of the study. We studied correlates of MH use (yes/no). Sex was not a significant predictor of MH use. In general, worse health and lower socioeconomic status (SES) were correlated with having at least one MH visit, but better health and higher SES were correlated with a higher quantity of use for those who had some MH use. The three insurance plans did not differ significantly in the proportion of people who had any MH services, but BC users of MH services had 2-3 times more MH visits and higher costs than GHC and UHC users. This suggests that the reliance on primary care providers in UHC and GHC may have changed the nature of MH care as compared to Blue Cross. The effects of income, MH need and symptom sensitivity on MH use were different among the three plans.     

Do physicians who diagnose more mental health disorders generate lower health care costs?

BACKGROUND: Underrecognition and undertreatment of mental health disorders in primary care have been associated with poor health outcomes and increased health care costs, but little is known about the impact of the diagnoses of mental health disorders on health care expenditures or outcomes. Our goal was to examine the relationships between the proportion of mental health diagnoses by primary care physicians and both health care expenditures and the risk of avoidable hospitalizations. METHODS: We used cross-sectional analyses of claims data from an independent practice association-style (IPA) managed care organization in Rochester, New York, in 1995. The sample was made up of the 457 primary care physicians in the IPA and the 243,000 adult patients assigned to their panels. We looked at total expenditures per panel member per year generated by each primary care physician and avoidable hospitalizations among their patients. RESULTS: After adjustment for case mix, physicians who recorded a greater proportion of mental health diagnoses generated significantly lower per panel member expenditures. For physicians in the highest quartile of recording mental health diagnoses, expenditures were 9% lower than those of physicians in the lowest quartile (95% confidence interval, 5% - 13%). There was a trend (P = .051) for patients of physicians in the highest quartile of recording mental health diagnoses to be at lower risk for an avoidable hospitalization than those of physicians in the lowest quartile. CONCLUSIONS: Primary care physicians with higher proportions of recorded mental health diagnoses generate significantly lower panel member costs, and their patients may be less likely to be admitted for avoidable hospitalization conditions.     

How free care improved vision in the health insurance experiment.

We studied reasons for the improvement in the functional vision of enrollees receiving free care in the Rand Health Insurance Experiment. Among low income enrollees, 78 per cent on the free plan and 59 per cent on the cost-sharing plans had an eye examination; the proportions of those obtaining lenses were 30 per cent and 20 per cent, respectively. Visual acuity outcomes of low income vs non-poor enrollees were more adversely affected by enrollment in cost-sharing plans. Free care resulted in improved vision by increasing the frequency of eye examinations and lens purchases.     

Short–run Associations Between Medical Care Expenditures and Adherence to Clinical Practice Guideline-based Measures for Diabetes

Objectives: To estimate relationships between medical care expenditures in 1996 and adherence to seven guideline-based measures for diabetes.
Methods and Data: Nonlinear exponential regression analyses were used to estimate relationships between medical care expenditures in 1996 and adherence to guideline-based measures that year, adjusting for differences in patients' demographics, location, plan type, and severity of illness. Adherence to criteria regarding physician visits, eye exams, blood sugar tests, urinalysis, triglyceride tests, total cholesterol tests, and HDL cholesterol tests was studied for 18,403 patients in 35 health plans.
Results: Average total medical expenditures would be $713 higher if all patients were treated according to the guideline-based measures in 1996, compared to what expenditures would be if no patients were treated that way. Average diabetes-related expenditures would be about $322 higher. Two important exceptions to this pattern were for adherence to the suggested frequency of hemoglobin A1c blood sugar tests and ophthalmology visits for dilated eye exams. Having the recommended number of these tests was associated with significantly lower total expenditures.
Conclusions: In general, adherence to clinical practice guideline-based measures was more costly than deviating from those criteria, in the short-run. Perhaps expenditures should be higher for many patients who are not treated according to guidelines. Randomized studies with more years of follow-up should be conducted to assess whether short-term investments in guideline adherence pay off with lower medical expenditures and greater levels of health in the long term.     

Indemnity plans rate higher in worker satisfaction

Despite a cost disadvantage, employees enrolled in group indemnity plans are happier with their medical care than are their colleagues who are enrollees of health maintenance organizations, a new survey shows. However, as purchasers continue to confront annual double-digit increases in indemnity costs, the shift toward managed care is expected to continue.     

Medicare Advantage Chronic Special Needs Plan boosted primary care, reduced hospital use among diabetes patients

The Affordable Care Act of 2010 authorized the continued availability of Medicare Advantage Chronic Condition Special Needs Plans (C-SNPs). This case study examines the model of care used by the largest such plan, Care Improvement Plus, and compares utilization rates among its diabetes patients with those of other beneficiaries enrolled in fee-for-service Medicare in the same five states. This special-needs plan emphasizes direct contacts with patients to help identify gaps in care and promote primary and preventive health care. The comparative analysis indicates that people with diabetes in the special-needs plan-particularly nonwhite beneficiaries-had lower rates of hospitalization and readmission than their peers in fee-for-service Medicare. For example, risk-adjusted hospital days per enrollee among special-needs plan participants were 19 percent lower than for fee-for-service Medicare enrollees (27 percent lower for nonwhite enrollees). Risk-adjusted physician office visits were 7 percent higher among C-SNP enrollees than among comparable fee-for-service enrollees (26 percent higher for nonwhite enrollees). Although this study does not include a cost analysis, we believe that savings from reduced hospitalizations are likely to more than offset the additional costs of enhanced primary care programs. Our study suggests that the Centers for Medicare and Medicaid Services may be able to adapt methods used by the C-SNP program to improve care and outcomes for beneficiaries with a broad range of chronic diseases.     

Health Promotion and Managed Care:: Surveys of California’s Health Plans and Population

Introduction:The purpose was to examine whether health-promotion programs offered by California health plans are a serious attempt to improve health status or a marketing device used in an increasingly competetive marketplace. The research examined differences in the coverage, availability, utilization, and evaluation of health-promotion programs in California health plans.Methods:A mail survey was done of the 35 HMOs (86% response) and 18 health insurance carriers (83% response) licensed to sell comprehensive health insurance in California in 1996 (some plans sell both HMO and PPO/indemnity products). The final sample included 30 commercial HMOs and 20 PPO and indemnity plans. The 1996 California Behavioral Risk Factor Survey (BRFS) of 4,000 adults was used to estimate population participation rates in health-promotion programs.Results:California’s HMOs in 1996 offered more comprehensive preventive benefits and health-promotion programs compared to PPO and indemnity plans. HMOs relied on a more comprehensive set of health-education methods to communicate health information to members and were more likely to open their programs to the public. HMOs are also more likely to have developed relationships with community-based and public health providers. Participation in health-promotion programs is low (2%–3%), regardless of plan type, and most health plans limit evaluations to assessment of member satisfaction and utilization. Only 35%–45% of HMOs, and no PPO/indemnity plans, assess the impact of health-promotion programs on health risks and behaviors, health status, or health care costs.Conclusion:For the majority of California’s PPO and indemnity plans, health promotion is not an integral part of their business. For the majority of HMOs, health-promotion programs are offered primarily as a marketing vehicle. However, a substantial minority of HMOs offer health-promotion programs to achieve other organizational goals of health improvement and cost control.