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Differences in Hospital Admission Rates Between Managed Care and Other Insurers Leveling Off

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Press Release Date: May 8, 2000

Contrary to popular belief, people enrolled in managed care plans are no longer less likely to be admitted to hospitals than are individuals covered by non-managed care plans, according to a new study from the Agency for Healthcare Research and Quality (AHRQ).

The study, which compares data from AHRQ's 1996 Medical Expenditure Panel Survey and its 1987 predecessor, the National Medical Expenditure Survey, indicates that falling hospitalization rates among non-managed care plans accounts for much of the change. The once-higher hospital admission rate of non-managed care plans declined 27 percent from 7.8 percent in 1987 to 5.7 percent in 1996, a rate roughly equivalent to that of managed care plans. The study found less change in hospital length of stay between the two groups over the same period.

"This research will help shed light on the changing nature of health insurance," said John M. Eisenberg, M.D., AHRQ director. "These findings reflect the leading role that managed care has played in reducing costs and how the rest of the health care system has emulated these practices. They will help inform policy decisions at all levels about how to manage rising health care costs while continuing to meet the coverage needs of patients."

AHRQ researchers Robin Weinick, Ph.D., and Joel Cohen, Ph.D., suggest that on one reason for the decline in hospital admissions by non-managed care plans may be changing characteristics of managed care enrollees. From 1987 to 1996, the number of Medicaid beneficiaries in managed care plans increased. In addition, non-managed care enrollees were less likely to be in fair or poor health in 1996 as compared to 1987, while the proportion of enrollees in managed care in fair or poor health remained the same.

Changes made by insurers and providers also may have contributed to the decline, say Weinick and Cohen, citing utilization review and other restrictions put in place by non-managed care plans to remain competitive. In addition, practice changes made by providers to meet managed care requirements may have affected their non-managed care patients.

The bottom line, conclude Weinick and Cohen, is that "managed care plans' past competitive advantage with respect to inpatient hospital use had eroded by 1996."

"Leveling the Playing Field: Managed Care Enrollment and Hospital Use, 1987-1996," is published in the May/June 2000 issue of Health Affairs.

For additional information, contact AHRQ Public Division, (301) 427-1364: Karen Migdail, (301) 427-1855 (KMigdail@ahrq.gov); Karen Carp, (301) 427-1858 (KCarp@ahrq.gov).

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