How Well Do HMOs Stack Up Against Fee-for-Service Plans? A Meta-Analysis

Assessing quality and cost under managed care and fee-for-service plans

From 2000 to 2001, Brandeis University, Schneider Institutes for Health Policy, Heller Graduate School, Brandeis University contracted with two experts in the economics of health care to conduct a literature review and develop a paper for presentation at the Eighth Princeton Conference, which is funded by the Robert Wood Johnson Foundation (RWJF).

The paper analyzed published research comparing cost and quality of services provided to enrollees in managed care health insurance plans with those provided under fee-for-service plans.

Key Findings

  • Project staff presented their findings at the conference, "The Future of Managed Care," that met May 17–19, 2001, in Princeton, N.J. Among the key findings were the following:

    • Quality-of-care findings for HMO plans were roughly comparable to those for non-HMO plans, a pattern that is similar to the previous reviews.
    • Access-to-care findings—including problems contacting the provider, getting an appointment and having an unmet need—were more unfavorable for HMO plans and were associated with lower levels of enrollee satisfaction.
    • Findings showed shorter HMO hospital lengths of stay when compared to fee-for-service; some of the differences were statistically significant.
    • Many specific results on a wide range of measures of patient/physician interpersonal communication and quality of services were especially unfavorable to HMOs.
    • Investigators found twice as many studies on quality as on clinical procedures and outcomes and concluded that more studies are necessary on the latter.