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HMO hospital quality may depend on where members live

A new study of hospitals used for heart bypass surgery by privately insured HMO patients suggests that plan members in some areas of the country get good quality hospital care, while those in other areas may use poorer quality facilities. The authors of the study, which was funded by the Agency for Health Care Policy and Research (HS09194), used expected-to-actual death rate ratios for heart bypass surgery—a commonly performed operation—as a measure of hospital quality.

The authors' conclusion is based on their findings showing that privately insured HMO patients in California who underwent heart bypass surgery in 1994 were more likely to be directed to hospitals with lower-than-expected death rates for the operation than those used by non-HMO patients for the surgery. California has long-established managed care markets which are mostly dominated by large HMOs.

But in Florida, where managed care arrived more recently and market areas tend to be smaller and not dominated by large HMOs, the researchers found that privately insured HMO patients were no less likely to use hospitals with average and high heart bypass surgery rates than people insured through indemnity and preferred provider organization (PPO) plans.

The study also found that beneficiaries of the traditional Medicare program in Florida used hospitals with lower mortality rates for heart bypass surgery to a greater extent than Medicare HMO patients. The researchers were not able to examine the hospital use pattern of Medicare HMO and traditional program patients in California.

Commercial and Medicare HMOs generally pay for hospital care only if it is provided in contract facilities. Patients in indemnity insurance and PPO plans and those in traditional fee-for-service Medicare have more latitude in choosing their hospitals. The findings take into account the distance between where patients lived and the location of available hospitals.

Whether HMO patients in States other than California and Florida use higher or lower quality hospitals for heart bypass surgery is likely to depend on whether their plans use objective data to measure health care quality when selecting facilities and on the degree to which plans trade off higher quality for lower prices, according to Jose J. Escarce, M.D., of RAND, who led the study. Dr. Escarce observed that HMO behavior appears to be influenced by the structure and maturity of managed care markets and by whether employers seek good quality of care from the companies they choose to insure their workers.

For details of the study, see "Health maintenance organizations and hospital quality of care for coronary artery bypass surgery," by Dr. Escarce, R. Lawrence Van Horn, Mark V. Pauly, and others, in the September 1999 issue of Medical Care Research and Review 56(3), pp. 340-362.

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