Managed care in the doctor's office: has the revolution stalled?

OBJECTIVE: To assess trends in the involvement of US physicians with managed care. STUDY DESIGN: Comparison of data from 2 consecutive rounds of a national survey. METHODS: Longitudinal data were obtained from the 1996/1997 (n = 12,528) and the 1998/1999 (n = 12,304) rounds of the Community Tracking Study (CTS) Physician Survey, a large, ongoing nationally representative survey of US physicians involved in patient care. Indicators used to assess involvement with managed care included global measures of managed care participation, risk contracting, exposure to financial incentives, and impact of care management tools. Changes in these measures over the 2 study periods are reported. Analyses were conducted for all physicians, as well as for primary care physicians (PCPs) and specialists separately. RESULTS: The percentage of practice revenue derived from managed care increased only modestly over the study period (from 42% to 45%). Mean numbers of managed care contracts per physician increased minimally (from 12 to 13). Trends in acceptance of capitation and exposure to financial incentives remained stable over the study period. Among PCPs, employment in staff/group health maintenance organizations declined slightly, whereas gatekeeping function increased modestly. Among care management tools, only treatment guidelines had a significantly increased impact on medical practice, primarily among PCPs (from 46% to 52%; P < .001). CONCLUSIONS: Many aspects of managed care leveled off between 1996 and 1999 in ways not accurately reflected by plan enrollment patterns. This "flattening of the curve" trend appears to hold generally across multiple measures. A stalling of the managed care "revolution," if it is sustained, may portend future escalation in healthcare costs.

Personal, organizational, and market level influences on physicians' practice patterns: results of a national survey of primary care physicians.

BACKGROUND: One of the principal tenets of managed care is that physicians' clinical decisions can be influenced both to improve the quality and consistency of care and to decrease health care expenditures. Medical decision making, however, remains a complex phenomenon and the most important determinants of physicians' approaches to clinical decision making remain poorly understood. OBJECTIVES: To determine how clinical decisions are associated with individual characteristics, practice setting and organizational characteristics, attributes of the patient population under care, and the market environment. RESEARCH DESIGN: Cross-sectional, nationally representative survey of patient-care physicians. SUBJECTS: Primary care physicians who provide direct patient care at least 20 hours per week. MEASURES: Proportion of physicians who would order a referral, diagnostic test, or treatment for 5 clinical scenarios thought to be representative of discretionary medical decisions. RESULTS: Responses were received from 4,825 primary care physicians who cared for adult patients (Response Rate 65%). The distribution of results for each of the five clinical scenarios demonstrates significant variability both within and between physicians. No evidence was seen of a consistent practice style across the vignettes (eg, "aggressive" or "conservative"). The organizational setting of practice was the most consistent predictor of behavior across all the clinical scenarios, with the exception of back pain, which was minimally related to any of the environmental factors. When compared to physicians in solo practice, physicians in all other practice settings were less likely to order a test or referral or pursue treatment. Practice involvement with managed care and measures of financial influences and administrative strategies associated with managed care were minimally and inconsistently associated with reported physician behaviors. CONCLUSIONS: The ability of managed care to improve the quality and consistency of care while also controlling the costs of care depends on its ability to influence medical decisions. Our findings generally demonstrate that managed care has a weak influence on discretionary medical decisions and that the influence of managed care pales in comparison to personal and practice setting influences.

Trends in out-of-pocket spending by insured American workers, 1990-1997.

This paper examines trends in out-of-pocket spending for insured workers from 1990 to 1997. Data are from the Consumer Expenditure Survey conducted by the U.S. Bureau of Labor Statistics. The survey collects detailed quarterly data on all consumer spending from logs kept each year by more than 10,000 households with job-based health insurance. During the study period, total out-of-pocket spending in constant dollars remained unchanged. Spending for medical expenses, drugs, and supplies declined by 23 percent, but this decline was offset by rising employee contributions for health insurance premiums. The shift to managed care, whose benefit structure requires less cost sharing, may have played a role in reducing out-of-pocket spending.

Physicians' assessments of their ability to provide high-quality care in a changing health care system.

BACKGROUND: With the growth of managed care, there are increasing concerns but inconclusive evidence regarding deterioration in the quality of medical care. OBJECTIVES: To assess physicians' perceptions of their ability to provide high-quality care and explore what factors, including managed care, affect these perceptions. RESEARCH DESIGN: Bivariate and multivariate analyses of the Community Tracking Study Physician Survey, a cross-sectional, nationally representative telephone survey of 12,385 patient-care physicians conducted in 1996/1997. The response rate was 65%. PARTICIPANTS: Physicians who provide direct patient care for > or =20 h/wk, excluding federal employees and those in selected specialties. MEASURES: Level of agreement with 4 statements: 1 regarding overall ability to provide high-quality care and 3 regarding aspects of care delivery associated with quality. RESULTS: Between 21% and 31% of physicians disagreed with the quality statements. Specialists were generally 50% more likely than primary care physicians to express concerns about their ability to provide quality care. Generally, the number of managed care contracts, but not the percent of practice revenue from managed care, was negatively associated with perceived quality. Market-level managed care penetration independently affected physicians' perceptions. Practice setting affected perceptions of quality, with physicians in group settings less likely to express concerns than physicians in solo and 2-physician practices. Specific financial incentives and care management tools had limited positive or negative associations with perceived quality. CONCLUSIONS: Managed care involvement is only modestly associated with reduced perceptions of quality among physicians, with some specific tools enhancing perceived quality. Physicians may be able to moderate some negative effects of managed care by altering their practice arrangements.

Employer health insurance premium subsidies unlikely to enhance coverage significantly.

State and local efforts to reduce the number of uninsured workers include three major approaches: public insurance expansions, subsidies paid directly to low income workers to help pay their share of employer-sponsored insurance premiums or buy individual insurance and subsidies paid directly to small employers to reduce the cost of health insurance premiums. Based on a national study by the Center for Studying Health System Change (HSC), premium subsidies paid directly to small firms are unlikely to significantly reduce the number of uninsured. About 16 million people work in firms with fewer than 50 workers that do not offer health insurance. A hypothetical 30 percent premium subsidy targeted to the employers of these workers--slightly more generous than the average in existing small firm subsidy programs across the country--would extend coverage to only about half a million uninsured workers if implemented nationally.

Do HMOs make a difference?

The growth of managed care has prompted questions about the effects of health maintenance organizations (HMOs) on consumers. This Issue Brief reports the results from a large national study of the privately insured population. No detectable difference was found between HMOs and other types of insurance in the use of three costly services--inpatient care, emergency room use and surgeries--and differences in reports of unmet need or delayed care are negligible. Differences for other measures pose a trade-off for consumers: HMOs provide more primary and preventive services and lower financial barriers to care, but they provide less specialist care and raise administrative barriers to care. In addition, patients in HMOs report less satisfaction, less trust in physicians and lower ratings of physician visits. These findings have implications for the current policy debate about managed care.

Does type of health insurance affect health care use and assessments of care among the privately insured?

OBJECTIVE: To inform the debate about managed care by examining how different types of private insurance-indemnity insurance, PPOs, open model HMOs, and closed model HMOs-affect the use of health services and consumer assessments of care. DATA SOURCES/DATA COLLECTION: The 1996-1997 Community Tracking Study Household Survey, a nationally representative telephone survey of households, and the Community Tracking Study Insurance Followback Survey, a supplement to the Household Survey, which asks insurance organizations to match household respondents to specific insurance products. The analysis sample includes 27,257 nonelderly individuals covered by private insurance. STUDY DESIGN: Based on insurer reports, individuals are grouped into one of the four insurance product types. Measures of service use include ambulatory visits, preventive care use, hospital use, surgeries, specialist use, and whether there is a usual source of care. Consumer assessments of care include unmet or delayed care needs, satisfaction with health care, ratings of the last physician visit, and trust in physicians. Estimates are adjusted to control for differences in individual characteristics and location. PRINCIPAL FINDINGS: As one moves from indemnity insurance to PPOs to open model HMOs to closed model HMOs, use of primary care increases modestly but use of specialists is reduced. Few differences are observed in other areas of service use, such as preventive care, hospital use, and surgeries. The likelihood of having unmet or delayed care does not vary by insurance type, but the reasons that underlie such access problems do vary: enrollees in more managed products are less likely to cite financial barriers to care but are more likely to perceive problems in provider access, convenience, and organizational factors. Consumer assessments of care-including satisfaction with care, ratings of the last physician visit, and trust in physicians-are generally lower under more managed products, particularly closed model HMOs. CONCLUSIONS: The type of insurance that people have-not just whether it is managed care but the type of managed care-affects their use of services and their assessments of the care they receive. Consumers and policymakers should be reminded that managed care encompasses a variety of types of insurance products that have different effects and may require different policy responses.

Health care perceptions and experiences.

Survey results suggest that most people have negative attitudes about health maintenance organizations (HMOs), even members of HMOs who are satisfied with their own care. This Issue Brief illustrates how perceptions of HMOs may color peoples' ratings of their own health care. According to new findings from the Center for Studying Health System Change (HSC), differences in ratings between privately insured people in HMOs and other types of insurance are in part attributable to peoples' perceptions of the type of health plan they are in, not the actual type of plan they are covered by. These results, which have implications for efforts to regulate managed care, suggest that reliance on attitudinal surveys alone are likely to provide a somewhat distorted and more negative view of care in HMOs, thereby exaggerating differences in how people assess the care they receive.

Do HMOs make a difference? Introduction.

The study presented in this and the following five papers analyzes how health maintenance organizations (HMOs) affect privately insured individuals' access to health care, use of services, and assessments of care. Using a common data source and methodology, the study examines differences in a broad range of measures between HMOs and other types of insurance, controlling for health status and an extensive set of other individual characteristics and market location. HMO/non-HMO differences also are examined across population subgroups defined by health status, income, race, and age. Data come from the Community Tracking Study Household Survey, a recent, large national survey. Findings show that a person's type of health insurance coverage has little effect on the likelihood of unmet or delayed needs for medical care in the aggregate, but the types of access problems faced by HMO and non-HMO enrollees differ. HMO enrollees are less likely to face financial barriers to care, but more likely to face barriers related to the organization of care delivery. HMO enrollees use more ambulatory and preventive care, but results show no differences in hospital, surgery, and emergency room use. Compared with other types of insurance, physician visits under HMOs are more likely to be to primary care physicians than to specialists. Finally, across nearly all measures of patients' satisfaction, ratings of their last doctor's visit, and trust in their physicians, HMO enrollees' assessments of care are lower than those of people not in HMOs. Across all measures, the study finds few subgroup differences.

Do HMOs make a difference? Access to health care.

This analysis examines the effects of health maintenance organizations (HMOs) on access to care among the privately insured, nonelderly population. After controlling for population and location differences, HMO and non-HMO enrollees differ little in reports of unmet or delayed care needs. Yet type of insurance affects the source of access problems. HMO enrollees face lower financial barriers to care and are more likely to report a regular source of care than those enrolled in other types of insurance, but they are more likely to report access problems related to the organization of care delivery.

Do HMOs make a difference? Data and methods.

This paper describes the common data source and methods used in this study. Data come from the Community Tracking Study Household Survey, a nationally representative survey of individuals conducted in 1996-1997. Focusing on the privately insured, nonelderly population, the study examines the effect of health maintenance organizations (HMOs) on access, service use, and consumer assessments, as well as how these effects differ across population subgroups. Multivariate models control for population characteristics and location differences between HMO and non-HMO enrollees. Tests for endogeneity of plan type (selection bias) indicated that this did not pose a threat to the analysis.

Do HMOs make a difference? Summary and implications.

The findings of this study of the effects of health maintenance organizations (HMOs) have implications for consumers' choice between HMOs and other types of insurance: consumers face a trade-off that flows in part from the design of HMOs. HMO enrollees get more primary and preventive care and face lower out-of-pocket costs, but they get less specialist care, experience more provider access and organizational barriers to care, and report less satisfaction, lower ratings of care, and less trust in their physicians. Policymakers should recognize that this trade-off will be attractive to some people but not to others.

The roles of Medicaid and economic factors in the demand for nursing home care.

OBJECTIVE: To examine nursing home demand, focusing on how Medicaid affects demand, the role of economic variables, and on important interactions between explanatory factors. DATA SOURCES: From the 1989 National Long Term Care Survey, a nationally representative sample of community-based and institutionalized elderly persons with disabilities (N = 3,837). Survey data are merged with state- and county-level data on Medicaid policy and local market conditions. STUDY DESIGN: Sample members are classified as Medicaid-eligible or private pay, were they to enter a nursing home. The probability of being in a nursing home is estimated separately on these two groups using probit. To explore interactions, these subsamples are further divided between married and unmarried persons and between persons with high and low levels of disability. PRINCIPAL FINDINGS: Demand for nursing home care systematically differs, depending on eligibility for Medicaid. This is attributed in part to the structure of Medicaid benefits. Although economic factors do not appear important to demand decisions in the aggregate, they play a larger role among married persons relative to unmarried persons, and among less disabled persons relative to highly disabled persons. CONCLUSIONS: Understanding the nature of nursing home demand requires careful consideration of the different consumption choices people face by virtue of their eligibility for public benefits. Because behavioral responses to changes in policy are found to differ among various groups of disabled persons, policymakers should be sensitive to how these differences affect the efficiency and distributional effects of specific policy changes.

The demand for post-acute and chronic care in nursing homes.

OBJECTIVES: Nursing homes provide care for persons with both post-acute and chronic conditions. In general, these two types of patients are associated with short and long stays, respectively. They also tend to be covered by different public or private insurance plans. The author investigated whether and how the demand for these two types of nursing home care differ. How alternative definitions of post-acute and chronic care nursing home stays affect estimates also was explored. METHODS: Data on a sample of elderly persons from the National Long-Term Care Channeling Demonstration was used. To account for market disequilibrium, demand was estimated using a bivariate probit with partial observability model. RESULTS: Differences were found in the demand for the two types of nursing home care. For instance, economic factors and functional and cognitive limitations were relatively more important in the demand for nursing home care for chronic conditions. Further, chronic care patients appeared more likely to face problems of access into nursing homes. Classifying nursing home stays by payer, rather than by length of stay, captured expectations at admission and appeared to reflect consumer behavior better. CONCLUSIONS: Differentiating post-acute and chronic care nursing home stays provides more meaningful information on consumer demand for nursing home care and will facilitate policy analysis in this area.

CHIPing away at the problem of uninsured children.

The State Children's Health Insurance Program (CHIP), enacted one year ago this August, is the largest expansion of health insurance in more than three decades. One of the measures of its success will be whether state officials are able to enroll children who are eligible. Research conducted by Health System Change (HSC) shows that uninsured children are a diverse group, and that for CHIP to be successful, policy makers will need to target programs to specific groups and local market conditions. This Issue Brief discusses why children lack health insurance and the implications for implementing CHIP.

Differences across payors in charges for agency-based home health services: evidence from the National Home and Hospice Care Survey.

OBJECTIVE: To investigate charge and payment differentials for home health services across different payors. DATA SOURCES: The 1992 National Home and Hospice Care Survey, a nationally representative survey of home and hospice care agencies and their patients, collected by the National Center for Health Statistics. STUDY DESIGN: We compare the average charge for a Medicare home health visit to the average charge for patients with other sources of payment. In making such comparisons, we control for differences across payors in service mix and agency characteristics. PRINCIPAL FINDINGS: Agencies charge various payors different amounts for similar services, and Medicare is consistently charged more than other payors. CONCLUSIONS: Findings imply the potential existence of payment differentials across payors for home health services, with Medicare and privately insured patients likely to be paying more than others for similar services. Such conclusions raise the possibility that, as in other segments of the healthcare market, cost-shifting and price discrimination might exist within the home health industry. Future research should explore these issues, along with the question of whether Medicare is paying too much for home health services.

Neighborhood locations of Section 8 housing certificate users with and without mental illness.

OBJECTIVE: The study examined whether participants with mental illness in the federal Section 8 housing subsidy program settle in neighborhoods different from those of Section 8 participants without mental illness. The nature of these differences and the reasons they occur were also examined. METHODS: Data sources included the Section 8 survey for Baltimore and Cincinnati of the national evaluation of the Robert Wood Johnson Foundation Program on Chronic Mental Illness, police records, and 1990 census tract files, supplemented with the addresses of all Section 8 users and mental health services in both cities. Analyses consisted of calculations of dissimilarity indexes, comparisons of means, and multiple regressions. RESULTS: Dissimilarity index scores were .54 for Baltimore and .48 for Cincinnati, indicating that roughly half of all Section 8 users with mental illness would have to move to eliminate neighborhood disparities between them and Section 8 users without mental illness. Section 8 users with mental illness settled in somewhat better neighborhoods than those without mental illness. This finding was largely attributable to the sizable disparities in the racial composition of the two groups of Section 8 users: a greater proportion of users with mental illness were white. CONCLUSIONS: The neighborhood quality of Section 8 users with mental illness was found to be at least as high as that for users without mental illness. It is not clear whether the Section 8 program of the Program on Chronic Mental Illness disproportionately served whites, although the racial composition of the Section 8 program in both cities is disproportionately black.

Demand for and access to institutional long-term care: the role of Medicaid in nursing home markets.

Economists long have speculated that Medicaid subsidies and related policies cause many nursing home markets to operate under conditions of permanent excess demand, resulting in access problems for Medicaid-eligible persons. If observations on nursing home use represent constrained supply instead of demand, estimation of unbiased demand parameters is difficult. In this paper, I estimate bivariate probits with partial observability on data from the National Long-Term Care Channeling Demonstration. The technique provides both unbiased demand parameters and direct tests of excess demand. The findings indicate that economic variables do not substantially affect decisions to seek nursing home care. Differential access to nursing home care by Medicaid eligibles and private payers provides empirical support for the excess demand hypothesis.

Appropriate placement of nursing-home residents in lower levels of care.

Too often individuals with long-term-care needs are placed in nursing homes when they might well be better served at a lower level of care. The uneven distribution of residents across settings stems from interacting factors of supply and demand: clinical need; lack of consensus among physicians about what constitutes the best setting for their patients; regulations restricting services in personal care homes. Three sets of clinical criteria identify nursing-home residents according to their appropriateness for lower levels of care. Factors like cost and ability of the patient's family to make informed decisions affect placement as well. Policies for shifting patients to lower levels of care must be carefully designed in order to save costs and ensure that quality of care is retained.

The effects of independent living on persons with chronic mental illness: an assessment of the Section 8 certificate program.

The feasibility of the Section 8 certificate program for individuals with chronic mental illness (CMI) and the outcomes associated with independent housing are examined. The analysis is based on data from a longitudinal survey of Section 8 certificate users in Baltimore and Hamilton County (Cincinnati) and on information from Section 8 application forms in each site. A pre-post research design was used to examine changes in hospitalization, residential stability, and mental health service outcomes. Four key dimensions of the CMI certificate program are examined: affordability, housing conditions, neighborhood conditions, and service gaps. Results suggest that the certificate program has a positive effect on independent living, that certificate use is associated with positive mental health outcomes, and that there is no evidence of "creaming" among program applicants.