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Related Experiment Videos

Medicare and managed care

H S Luft1

  • 1Institute for Health Policy Studies, University of California, San Francisco 94109, USA. hluft@itsa.ucsf.edu

Annual Review of Public Health
|June 5, 1998
PubMed
Summary
This summary is machine-generated.

Most Medicare beneficiaries seek supplemental insurance or Health Maintenance Organization (HMO) plans for extra benefits. While HMOs can lower costs through careful enrollment, inadequate risk adjustment limits incentives for high-quality care for sicker individuals.

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Area of Science:

  • Health economics
  • Geriatric healthcare policy

Background:

  • Medicare provides broad but limited coverage for seniors.
  • Most beneficiaries require supplemental insurance or enroll in Health Maintenance Organizations (HMOs) for additional benefits.

Purpose of the Study:

  • To analyze the role and impact of supplemental coverage and HMOs within the Medicare program.
  • To evaluate the cost-effectiveness and quality of care provided by Medicare beneficiaries utilizing HMOs.

Main Methods:

  • Analysis of Medicare beneficiary enrollment trends in supplemental plans and HMOs.
  • Comparative assessment of utilization, costs, and quality metrics between fee-for-service and HMO models.

Main Results:

  • HMOs offer lower or zero cost benefits due to reduced utilization and favorable selection of lower-risk enrollees.

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  • HMO competition may decrease local fee-for-service costs.
  • Quality and satisfaction data show mixed results, with some areas favoring HMOs and others not.

    • Conclusions:

    • Supplemental coverage and HMOs are crucial for Medicare beneficiaries seeking comprehensive benefits.
    • Incentives for HMOs to provide high-quality care to high-risk enrollees are lacking due to insufficient risk-adjusted payments.