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Medicare HMOs reduce utilization, researchers say

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Medicare Advantage health maintenance organization (HMO) plans might be succeeding at discouraging unnecessary use of medical care.

Bruce Landon, a researcher at Harvard Medical School, and other researchers make that argument in a paper published in Health Affairs, an academic journal that covers health care delivery and health care finance systems.

Landon and his colleagues analyzed claims data for Medicare Advantage HMO plan enrollees and traditional Medicare defined benefit plan enrollees from 2003 through 2009.

The researchers found that Medicare Advantage HMO enrollees were about 25 percent to 35 percent less likely to go to an emergency room over the period studied and that they spent about 20 percent to 25 percent fewer days getting medical care in the hospital as hospital inpatients.

The Medicare Advantage HMO plans started out with significantly fewer inpatient hospital surgical days per patient in 2003, but, in 2007 and 2009, inpatient surgical day rates were similar for the Medicare Advantage HMO plans and the traditional Medicare plans, the researchers said.

The Medicare Advantage HMO  enrollees also got more heart bypass grafts, the researchers said.

“Proponents of managed care have argued that integrated health plans can deliver care more rationally than traditional fee-for-service care, using their ability to tailor their provider networks to the needs of their population and to impose preapproval requirements and utilization review to limit the use of procedures,” the researchers said.

The 2003-2009 claims data analysis seems to support the idea that HMOs might be decreasing use of medical care, the researchers said.

“Although we could not assess the appropriateness of services, some of our findings suggest that the use of services may be more appropriate within Medicare Advantage HMOs,” the researchers said. “For instance, relative to beneficiaries in traditional Medicare, Medicare Advantage HMO enrollees are more commonly treated with cardiac bypass surgery, in accord with current guidelines. Additionally, lower rates of emergency department use suggest that Medicare Advantage HMOs may be treating patients in less costly primary care or urgent care settings.”

The team that wrote the Health Affairs article includes L. Gregory Pawlson, an executive at the Blue Cross Blue Shield Association. Another co-author, Joseph Newhouse, is on the board of Aetna (NYSE:AET). 

Consumer groups and other groups have been clashing with health insurer groups for decades over what kind of role, if any, private health insurers should have in running Medicare.

Private insurers have argued that they can hold down the cost of coverage, and improve the quality of coverage and health care, by being more efficient, more flexible, and more responsive to consumers’ concerns.

Defenders of the traditional Medicare program have argued that the traditional program has lower administrative costs, and that popular Medicare Advantage plan features that lower enrollees’ out-of-pocket costs seem to encourage the enrollees to use more care than traditional Medicare plan enrollees use.

America’s Health Insurance Plans is pointing to the Health Affairs paper as evidence supporting its argument that Medicare Advantage plans are delivering high-quality care.

Other studies have found that Medicare Advantage enrollees are much less likely to enter a hospital within 30 days of leaving a hospital than traditional Medicare enrollees are, AHIP said in a comment on the new paper.

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