Health Care Costs and Financing

Medicare enrollees in for-profit plans are no less likely to receive high-cost procedures than those in non-profit plans

There is widespread concern that the financial incentives of managed care will lead health plans, particularly for-profit health plans, to restrict Medicare enrollees' access to important health care services, such as high-cost surgeries. However, a new study found no evidence that enrollees in for-profit health plans were less likely to receive 12 high-cost operative procedures than those in not-for-profit plans.

Indeed, the rates of carotid endarterectomy, cardiac catheterization, coronary artery bypass graft surgery, and coronary angioplasty were higher in for-profit plans than they were in not-for-profit plans. The rates of use of other common and costly operative procedures such as total hip or knee replacement were similar in the two types of plans. After adjusting for enrollee case mix and other plan characteristics, the for-profit plans had significantly higher rates of use than the not-for-profit plans for 2 of the 12 procedures studied, and they had lower rates for none.

The authors speculate that the higher rate of use of some procedures in for-profit plans may be related to differences in plan leadership. Leaders of for-profit plans may focus primarily on obtaining price discounts or trimming ancillary services rather than on reducing the number of procedures. They also may be more sensitive to adverse publicity or legal liability that might arise if they restrict the use of high-cost procedures.

For procedures with similar rates, for-profit and not-for-profit plans may perceive similar incentives to control costs and use similar approaches, suggests Alan M. Zaslavsky, Ph.D., of Harvard Medical School. In a study that was supported in part by the Agency for Healthcare Research and Quality (HS10803), the researchers analyzed 1998 data from the Centers for Medicare & Medicaid Services Health Plan Employer Data and Information Set (HEDIS) on nearly 4 million elderly Medicare enrollees who were enrolled in 254 health plans during 1997.

See "Use of high-cost operative procedures by Medicare beneficiaries enrolled in for-profit and not-for-profit health plans," by Eric C. Schneider, M.D., Dr. Zaslavsky, and Arnold M. Epstein, M.D., in the January 8, 2004, New England Journal of Medicine 350(2), pp. 143-150.

Return to Contents
Proceed to Next Article