Comparing surgical efficiency in independent practice association HMOS and traditional insurance programs

This study examines the effect of Independent Practice Association (IPA) HMO membership on hospital total charges, ancillary charges and length of stay (LOS) for surgical patients. Intrahospital comparisons of IPA and traditional insurance patients are made after adjusting for surgical procedure, admission severity of illness, age, sex and year of admission. Our multiple regression model indicates that IPA patients undergoing 12 frequently occurring surgical procedures have lower resource use. Eight (80%) of the 10 study hospitals exhibit a negative IPA beta coefficient for total charges, ancillary charges and LOS. Five (50%) hospitals have statistically significant (p < 0.05) negative coefficients for total charges, while one (10%) hospital has a significant positive coefficient. IPA patients exhibit adjusted total charges that are 6% lower than traditional insurance, ancillary charges that are 4.3% lower, and LOS that is 10% shorter.