New England Medical Center Analysis Shows No Difference in Health Outcomes Between Fee-For-Service Medicare and Medicare HMOs
In 2003 investigators at New England Medical Center Hospitals, Boston, collected four-year follow-up data from a cohort of Medicare beneficiaries under study since 1998 to examine differences in health outcomes related to physical and mental health and death for beneficiaries enrolled in traditional fee-for-service Medicare versus those enrolled in Medicare HMOs.
While many studies have examined performance differences between traditional fee-for-service Medicare and Medicare HMOs, results have been inconclusive.
Researchers reported findings in a December 2004 report to the federal Agency for Healthcare Research and Quality entitled Comparing Four-Year Health Outcomes Among Elderly Adults in Traditional (FFS) Medicare and Medicare HMOs.
- There were no statistically significant differences in outcomes relating to physical and mental health or death after four years between elderly individuals enrolled in traditional fee-for-service Medicare and those enrolled in Medicare HMOs, after accounting for population differences.
- Analysis of those who changed Medicare systems during the study period ("switchers") supported previous research findings that sicker patients are more likely to choose fee-for-service plans while healthier individuals tend to choose HMOs.
- The addition of Medicaid coverage had a slight, but not statistically significant, favorable impact on physical health outcomes.
The Robert Wood Johnson Foundation (RWJF) supported data collection with a grant of $50,000 between December 2002 and November 2003.
Although Medicare-qualified health maintenance organizations (HMOs) have been available to Medicare beneficiaries since 1972, these plans were few in number until the 1990s, when the number of plans and beneficiary enrollment tripled.
While many studies have examined performance differences between traditional fee-for-service Medicare and Medicare HMOs, results have been inconclusive. Some studies showed no differences and others found generally more positive outcomes for patients in fee-for-service Medicare.
Supported by a $1.99 million grant from the federal Agency for Healthcare Research and Quality and the National Institute on Aging, investigators at New England Medical Center Hospitals began, in 1998, to study outcome differences across Medicare systems by collecting data at baseline and two years after enrollment from a large cohort of Medicare patients.
Results were inconclusive, however, because most patients' health status had not changed enough during that period to allow for comparative analysis. The researchers believed that a four-year data collection would provide the variation needed.
Researchers at New England Medical Center Hospitals developed, pre-tested and administered a four-year follow-up questionnaire to the cohort of Medicare beneficiaries under study since 1998.
A total of 4,804 cohort members (a 67.3 percent response rate) completed the mailed questionnaires, which addressed primary care assessment, health status assessment, health care utilization, medication regimens, health insurance and sociodemographic characteristics (age, sex, income, marital status, etc.).
The majority of survey content was identical to the content of surveys administered in 1998 and 2000. A new group of questions measured attitudes and preferences related to seeking medical care.
The federal Centers for Medicare & Medicaid Services provided enrollment and mortality data to the project. RWJF supported the fourth year of data collection; a grant of $100,000 from the federal Agency for Healthcare Research and Quality supported the analysis of these data.
Researchers reported findings in a December 2004 report to the Agency for Healthcare Research and Quality entitled Comparing Four-Year Health Outcomes Among Elderly Adults in Traditional (FFS) Medicare and Medicare HMOs.
- There were no statistically significant differences in functional health outcomes that is, outcomes relating to physical and mental health or mortality after four years between elderly individuals enrolled in traditional fee-for-service Medicare and those enrolled in Medicare HMOs, after accounting for population differences. There were no significant differences in health outcomes between enrollees who stayed in either system over the four-year period for either the general participant population or for vulnerable subgroups (those with hypertension, diabetes, congestive heart failure, recent heart attack or depression).
- Analysis of those who changed Medicare systems during the study period ("switchers") supported previous research findings that sicker patients are more likely to choose fee-for-service plans while healthier individuals tend to choose HMOs. Moreover, the study found that beneficiaries who changed systems during the study appeared to take their health circumstances into account. Beneficiaries who left an HMO for the fee-for-service Medicare system showed substantially steeper health declines than their counterparts who remained stably enrolled in either system. And, conversely, those who left fee-for-service Medicare to join an HMO were substantially healthier, with considerably smaller health declines than beneficiaries who were stably enrolled in either system.
- The addition of Medicaid coverage had a slight, but not statistically significant, favorable impact on physical health outcomes. The effect was similar under both systems.
The research team reported findings in a report to the Agency for Healthcare Research and Quality. See the Bibliography for details.
The principal investigator offered the following conclusions as a result of the four-year findings.
- It appears that enrollees are basing their switching decisions, at least in part, on their health circumstances. Allowing Medicare enrollees to change systems as their health circumstances require is a real benefit to the enrollees and may contribute to the "outcomes equilibrium" observed in the study.
- While earlier studies suggested that for some vulnerable subgroups outcomes were poorer in Medicare HMOs than in the fee-for-service system, Medicare HMOs were then rarer and more like a "boutique" system that may not have been equipped to address the needs of such patients. With the proliferation of Medicare HMOs nationally, it is possible that the standard of care provided by HMOs and fee-for-service Medicare has converged to where there are few substantive differences in their care processes.
SIGNIFICANCE TO THE FIELD
According to the principal investigator, the finding that there is no statistically significant difference in health outcomes between the two Medicare systems is important for the federal Medicare Advantage Program, enacted as part of the Medicare Prescription Drug, Improvement and Modernization Act of 2003. The Medicare Advantage Program aims to reform and expand the availability of private health plans for seniors under Medicare.
If the study had resulted in a negative finding with respect to HMOs, there would be more caution about moving seniors to HMOs; instead, this finding will reinforce the financial advantage of HMOs since health outcomes are not a real consideration in the decision to choose Medicare fee-for-service versus an HMO. However, the findings underscore the importance of a system that allows beneficiaries to move between systems as they feel their health circumstances require.
- Longitudinal follow-up of an elderly study cohort is possible if participants are engaged and invested in the study and convinced of its legitimacy. This study continued to interest the elderly participants and they did not find participation burdensome. (Principal Investigator)
- Even in the elderly population, health changes very slowly and medical care is a weak predictor of health outcomes. Social factors are very important. (Principal Investigator)
- It is critical to take into account differences in the population when comparing outcomes of different population groups. Considering selection effects (related to switching between fee-for-service and HMOs) yielded important differences in outcomes in this study. (Principal Investigator)
AFTER THE GRANT
Researchers will continue to follow this cohort through 2006 and collect administrative data through 2007 supported by a continuation grant from the Agency for Healthcare Research and Quality. This study, initiated in 1998, is the largest and longest-running panel of Medicare enrollees for the investigation of health outcomes in traditional fee-for-service Medicare versus Medicare HMOs.
GRANT DETAILS & CONTACT INFORMATION
Analyzing Primary Care Performance and Outcomes in Medicare
New England Medical Center Hospitals (Boston, MA)
Dates: December 2002 to November 2003
Dana Gelb Safran, Sc.D.
(Current as of date of this report; as provided by grantee organization; not verified by RWJF; items not available from RWJF.)
Safran DG. Comparing Four-Year Health Outcomes Among Elderly Adults in Traditional (FFS) Medicare and Medicare HMOs A Report Submitted to the Agency for Healthcare Research and Quality. Boston: New England Medical Center Hospitals, 2004.
"Choice & Quality in Senior Health Care: A National Survey." New England Medical Center Hospitals, fielded OctoberDecember 2002 and MarchApril 2003.
Report prepared by: Mary B. Geisz
Reviewed by: Janet Heroux
Reviewed by: Molly McKaughan
Program Officer: James R. Knickman
Program Officer: Robert G. Hughes