Do HMOs reduce hospitalization of terminal cancer patients?

The ability of health maintenance organizations to contain the costs of their members' health care, largely through reduced hospitalization, has been documented. There are, however, no studies to investigate whether HMOs realize cost savings specifically for their terminally ill members. In this study, we examined hospital utilization and costs in a matched-pair comparison of HMO members and nonmembers under the age of 65 in Monroe County, New York, who died of cancer during 1976-1982. We found that the HMO members used somewhat fewer hospital days and had lower hospital costs than nonmembers, but the differences were not statistically significant. We also found significantly greater variance in the costs of care for nonmembers than for HMO members.