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Health Care Costs and Financing

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Differences in hospital admission rates between managed care and other insurers leveling off

A study that compares data from the Agency for Healthcare Research and Quality's 1996 Medical Expenditure Panel Survey (MEPS) and its 1987 predecessor, the National Medical Expenditure Survey (NMES), finds that people enrolled in managed care plans are no longer less likely to be admitted to hospitals than are individuals covered by non-managed care health plans.

The findings indicate that falling hospitalization rates among non-managed care plans account 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. AHRQ researchers Robin Weinick, Ph.D., and Joel Cohen, Ph.D., suggest that 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 with 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, according to the researchers, who cite the effects of 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 the authors, is that the competitive advantage with respect to inpatient hospital use enjoyed by managed care plans in the past had eroded by 1996.

For more information, see "Leveling the playing field: managed care enrollment and hospital use, 1987-1996," by Drs. Weinick and Cohen, in the May/June 2000 Health Affairs 19(1), pp. 178-184.

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