Health care reform: pediatric elective surgery payer mix and utilization under TennCare managed competition

Area of Science:

• Health Services Research
• Pediatric Otolaryngology
• Healthcare Economics

Background:

• Managed care models can reduce reimbursement for surgical services.
• This may limit patient access to elective procedures, particularly for those with public insurance.
• The implementation of Medicaid managed competition warrants investigation into its effects on surgical access and provider behavior.

Purpose of the Study:

• To evaluate the impact of Medicaid managed competition on the provision of elective pediatric otolaryngology surgeries.
• To analyze shifts in payer mix for specific procedures before and after managed care implementation.

Main Methods:

• Analysis of payer mix for tonsillectomy and adenoidectomy (T&A) and bilateral myringotomy with ventilation tube insertion (BM&VT) charges over an eight-year period.
• Comparison of payer mix for these elective procedures against hospital gross charges as a control.

Main Results:

• Following TennCare implementation, hospital gross charges showed an increase in TennCare/Medicaid and a decrease in commercial insurance.
• Conversely, charges for T&A and BM&VT procedures demonstrated a shift towards increased commercial insurance and decreased TennCare/Medicaid.
• The number of T&A and BM&VT procedures for TennCare/Medicaid patients remained stable, while procedures for commercially insured patients increased.

Conclusions:

• Pediatric otolaryngologists mitigated potential financial losses associated with TennCare by shifting elective procedures to commercially insured patients.
• This indirect cost shifting maintained procedure volumes for Medicaid patients while increasing them for those with commercial insurance.