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Fixed payments not a barrier to quality of care in HMOs, study finds
Date:7/8/2013

Ever since the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, the number of enrollees in Medicare Advantage, Medicare's managed care program, has jumped from 5.3 million to 14.4 million in 2013. While most individuals in Medicare opt for the traditional, fee-for-service benefit, many more are enrolling in HMOs and other managed care options.

This dynamic heightens the importance of a question health care professionals and policymakers have been asking for many years: Does the system of fixed reimbursement inherent to HMOs and other forms of health plans compromise care, especially when compared with traditional fee-for-service plans which, typically, are not limited by external financial caps?

Researchers from the Harvard Medical School Department of Health Care Policy found that between the years 2003 and 2009, patients in Medicare HMOs were more likely to receive recommended ambulatory preventive services such as breast cancer screening, cholesterol testing, and diabetes exams, than patients in traditional fee-for-service Medicare. What's more, by 2009, patients in HMOs rated their primary care physicians more favorably than patients in traditional fee-for-service care didsomething that was not the case in 2003.

"For these services, HMOs were able to deliver more appropriate care despite potential incentives to limit care due to fixed payments," said John Ayanian, professor of health care policy at Harvard Medical School.

The findings were reported in the July 2013 issue of Health Affairs.

Medicare has a traditional fee-for-service structure that dates back to 1965, one in which patients can use whatever services their physicians prescribe without any constraints. Over the last 30 years the program has developed a more prominent role for health maintenance organizations, or HMOs, which receive fixed payments from Medicare no matter how many services a patient receives. As more pat
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Contact: Katie DuBoff
katie_duboff@hms.harvard.edu
617-432-3038
Harvard Medical School
Source:Eurekalert

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