Health Care Costs and Financing

When managed care market share increases in a geographic area, procedures decrease for Medicare fee-for-service patients

Rates of coronary angiography among fee-for-service (FFS) Medicare patients admitted for heart attack fall slightly as managed care market share increases, according to a study supported by the Agency for Healthcare Research and Quality (HS10803). When managed care patients comprise a larger share of business, providers may practice medicine more conservatively, conclude the Harvard Medical School researchers who conducted the study.

The researchers used data from the Cooperative Cardiovascular Project to study the spillover effect of managed care market share (based on data from the Centers for Medicare & Medicaid Services) on the appropriate use of coronary angiography among a national group of 110,000 Medicare FFS beneficiaries hospitalized for heart attack at hospitals in most States. Moving from a county with average managed care penetration to one with a penetration rate 10 percentage points above the average modestly reduced (by 1 to 2 percentage points) the likelihood of angiography for individuals who were likely to benefit from the procedure (appropriate) as well as those unlikely to benefit from it (inappropriate).

This finding implies that higher managed care market share is associated with a modest reduction in quality of care for patients who are likely to benefit from coronary angiography, along with a reduction in unnecessary angiography among patients for whom the procedure is inappropriate. These effects did not appear to be mediated by the number of cardiologists, hospital teaching and ownership status, the admitting hospital's capability to perform coronary angiography, or the volume of heart attack patients.

For more information, see "The effect of managed care market share on appropriate use of coronary angiography among traditional Medicare beneficiaries," by Ellen Meara, Ph.D., Mary Beth Landrum, Ph.D., John Z. Ayanian, M.D., M.P.P., and others, in the Summer 2004 Inquiry 41, pp. 144-158.

Editor's Note: A second AHRQ-supported study on a related topic reveals that average coronary angioplasty prices are 8 percent lower for PPOs than for fee-for-service plans, followed by point-of-service HMOs, which capture a 24 percent discount. For more details, see Dor, A., Koroukian, S.M., and Grossman, M. (2004, Summer). "Managed care discounting: Evidence from the MarketScan database." (AHRQ grant HS10282). Inquiry 41, pp. 159-169.

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