Medicaid Managed Care - U.S. Senate Special Committee on Aging

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independent research is growing, but most of the major work to date has focused on
older people generally, and Medicare risk plans in particular. With the exception of
the HCFA sponsored evaluation of Arizona's program, 3 states have no major
<strong>Medicaid</strong> managed care studies offering specific guidance on approaches to older
people and people with disabilities. This will change shortly, as independent
evaluations of other §1115 waiver programs are completed. In particular, the
disability module of the Oregon Health Plan evaluation should be of great interest
to other states. In the meantime, several studies can provide some insights into the
managed care's potential affect on the health care delivered to the elderly and
persons with disabilities.
The Medical Outcomes Study4 found that older people and poor chronically ill
people had worse physical health outcomes in HMOs than comparable people
treated in fee-for-service settings. Furthermore, this pattern was the opposite of that
found for non-poor, non-elderly participants, who fared better in HMOs, suggesting
that what works for the average person may not work for special populations. The
study included a variety of HMO settings in Boston, Chicago and Los Angeles.
In a study of 450 frail older people in San Diego, Experton et al.S identified a
troubling utilization pattern for those in Medicare HMOs. Compared to
fee-for-service study participants, those in Medicare HMOs received 71% fewer
home health visits. While this finding alone does not suggest worse care, the study
also found that the Medicare HMO members were over four times as likely to have
any hospital readmission, and over seven times as likely to have a preventable
hospital readmission. The authors conclude that, while managed care may
encourage more judicious use of services for younger, healthy populations,
application of the same utilization approaches may limit beneficial care for frail
older people. It should be noted that the Medicare HMOs in the study were not
responsible for long term care, perhaps lending support to the argument that
capitation of acute care without regard to long term care provides perverse
incentives to reduce acute costs, since long term care consequences are not borne by
the HMOs.
3 Nelda McCall et al., Evaluation of Arizona's Health <strong>Care</strong> Cost Containment System
Demonstration (Final Report), (San Francisco: Laguna Research Associates, 1996).
4 John E. Ware et al.,1996. 'Differences in 4-Year Health Outcomes for Elderly and Poor,
Chronically Ill Patients Treated in HMO and Fee-for-Service Systems.' Journal of the American Medical
Association 276 no. 13 (1996): pp.1039-1047.
5 Bettina Experton, et al., 'The Impact of Payor/Provider Type on Health <strong>Care</strong> Use and
Expenditures among the Frail Elderly," American Joumal of Public Health 87 no. 2 (1997): pp. 210-216.
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