October 2005

Grant Results

National Program

Changes in Health Care Financing and Organization

SUMMARY

Research and policy experts often assume that growth in the market penetration of managed care organizations and the incentives they use to control costs have a "spillover" effect (i.e., an effect beyond the managed care market) on the health care received by Medicare fee-for-service beneficiaries.

From 2002 to 2003, investigators from the Mount Sinai School of Medicine of New York University tested whether this assumption is true for Medicare managed care patients with diabetes.

This project was part of the Robert Wood Johnson Foundation (RWJF) national program Changes in Health Care Financing and Organization (HCFO) (for more information see Grant Results).

Key Findings

  • Researchers found little evidence to suggest such a spillover effect for the studied diabetes population.

Funding
RWJF supported this project through a grant of $83,890.

 See Grant Detail & Contact Information
 Back to the Table of Contents


THE PROBLEM

From 1995 to 1998, market penetration of managed care organizations increased substantially for two main reasons. First, more workers chose such plans, and second, federal and state policies encouraged Medicare beneficiaries to use the Medicare+Choice option by enrolling in private managed care health plans. (Medicare+Choice — now called Medicare Advantage — became an alternative to the traditional Medicare fee-for-service model with the passage of the federal Balanced Budget Act of 1997.)

Research has indicated that this increased market penetration of managed care organizations led to a change in the use of health care resources, including more consolidation among hospitals, decreased use of hospital resources and less frequent diagnostic imaging.

Research also suggests that managed care generally outperforms fee-for-service in terms of preventive care, in part because managed care organizations have an incentive to promote the use of preventive care in order to decrease future costs and enhance their rating on health plan report cards issued as part of the Health Plan Employer Data and Information Set (HEDIS), which is compiled by the National Committee for Quality Assurance, an independent, nonprofit organization that assesses and reports on the quality of managed health care plans.

 Back to the Table of Contents


THE PROJECT

Research and policy experts often assume that growth in the market penetration of managed care organizations and the incentives they use to control costs have a spillover effect on the health care received by Medicare fee-for-service beneficiaries. To test this assumption, in a project conducted in the Changes in Health Care Financing and Organization (HCFO) program, researchers at the Mount Sinai School of Medicine constructed two databases:

  • Individual claims information for Medicare fee-for-service beneficiaries with diabetes, from 1995 to 1998.
  • Managed care market activity by metropolitan area.

The claims information included data on:

  • Eye exams and influenza vaccinations — recommended for people with diabetes and included on health plan HEDIS "report cards."
  • HbA1c tests of average blood glucose and lipid panel tests — also recommended for people with diabetes but not part of HEDIS.
  • High-cost services, such as MRIs (magnetic resonance imaging) and specialist referrals, thought by some in the field to be limited under managed care.
  • Incidence of certain diabetes-related complications, such as amputation and diabetic ketoacidosis, that high-quality preventive care may avert.

Cross-referencing the two databases yielded the effects of managed care market penetration on the incidence and quality of care for the study population.

Researchers also examined whether physicians with higher proportions of their income resulting from managed care would be more responsive to managed care treatment tools (such as treatment reminders and guidelines and computerized clinical information systems) than physicians with less income related to managed care. The Physician Survey of the Community Tracking Study provided data for this analysis. Sponsored by RWJF, the Community Tracking Study is part of the Health Tracking national program managed by the Center for Studying Health System Change; it is a large-scale longitudinal investigation of health system change and its effects on people.

 Back to the Table of Contents


FINDINGS

Researchers reported the following findings in a Findings Brief available at the HCFO Web site:

  • A series of findings suggests that there is no significant difference in the health care of fee-for-service Medicare beneficiaries with diabetes in areas with high managed care market penetration versus those in areas with low managed care market penetration. These findings include:
    • Managed care market penetration had only a minimal spillover effect (an effect beyond the managed care market) on fee-for-service beneficiaries' quality of care, as defined by provision of influenza vaccinations, HbA1c tests and lipid panel tests.
    • While there was a difference in preventive care (e.g., eye exams) with higher managed care market penetration, the difference was not statistically significant.
    • Although fee-for-service beneficiaries received less preventive care, it was not clear if this was due to a higher proportion of more prevention-oriented enrollees in managed care or to a spillover effect.
    • The care of fee-for-service beneficiaries was not more limited in areas of higher managed care market penetration. For example, fee-for-service beneficiaries in such areas were not less likely to see specialists.
    • The level of managed care market penetration was not related to numbers of avoidable diabetes-related complications, which were rare in any event.
  • Physicians with a low proportion of managed care-related income considered reminders, guidelines, etc. to be less useful than did physicians more dependent on managed care income. This effect occurred at the individual physician level and was not related to managed care market penetration. Even in areas with high managed care penetration, physicians with small managed care practices were not likely to change their behavior related to these tools.

 Back to the Table of Contents


GRANT DETAILS & CONTACT INFORMATION

Project

Managed Care's Spillover Effects on Quality of Diabetes Care for Medicare Patients

Grantee

Mount Sinai School of Medicine of New York University (New York,  NY)

  • Amount: $ 83,890
    Dates: January 2002 to June 2003
    ID#:  044201

Contact

Paul L. Hebert, Ph.D.
(212) 659-9567

 Back to the Table of Contents


Report prepared by: Karin Gillespie
Reviewed by: Marian Bass
Reviewed by: Molly McKaughan
Program Officer: Nancy L. Barrand

Most Requested