Skip Navigation U.S. Department of Health and Human Services www.hhs.gov
Agency for Healthcare Research Quality www.ahrq.gov
Archive print banner

Health Care Costs and Financing

This information is for reference purposes only. It was current when produced and may now be outdated. Archive material is no longer maintained, and some links may not work. Persons with disabilities having difficulty accessing this information should contact us at: https://info.ahrq.gov. Let us know the nature of the problem, the Web address of what you want, and your contact information.

Please go to www.ahrq.gov for current information.

Fee-for-service Medicare plans offer better quality care than Medicare HMO plans, but costs are higher

By the year 2000, nearly 20 percent of elderly Medicare beneficiaries were enrolled in Medicare health maintenance organization (HMO) programs compared with only 6 percent in 1990. A new study shows that traditional Medicare fee-for-service (FFS) programs provide better primary care than Medicare HMO programs.

Elderly people must decide whether the advantages of primary care under traditional FFS Medicare are worth the higher out-of-pocket costs, concludes Dana Gelb Safran, Sc.D. In the study, which was supported in part by the Agency for Healthcare Research and Quality (HS09622), Dr. Safran and colleagues at the New England Medical Center and Tufts University surveyed the seniors in Medicare HMO and FFS programs in 13 States about the quality of primary care they received.

The researchers used 11 summary scales that measured 7 defining characteristics of primary care: access, continuity, integration of care, comprehensiveness, whole-person orientation, clinical interaction (thoroughness of physical exams and communication quality), and sustained clinician-patient partnership. For 9 of 11 indicators, performance favored traditional FFS Medicare over HMOs. Only financial access (fewer cost-related barriers to care such as high copays) favored HMOs. Among HMOs, independent practice association/networks emerged with more favorable performance than staff/group-model HMOs on nine features of care, but they did not perform as well as traditional FFS Medicare in those same areas.

There were no significant differences in the rates of preventive counseling among elderly patients in either system, although counseling rates seemed low in all systems. Overall, more personalized, patient-oriented, and integrated care was an advantage of traditional FFS Medicare programs. Lower out-of-pocket costs, minimal paperwork, and in some cases, expanded benefits packages (for example, drug coverage, eyeglasses, and dental care), were benefits of Medicare HMO programs.

See "Primary care quality in the Medicare program," by Dr. Safran, Ira B. Wilson, M.D., M.Sc., William H. Rogers, Ph.D., and others, in the April 8, 2002, Archives of Internal Medicine 162, pp. 757-765.

Return to Contents
Proceed to Next Article

The information on this page is archived and provided for reference purposes only.

 

AHRQ Advancing Excellence in Health Care