Checking Up on Managed Care

Are Some Insurance Plans Bypassing the Best Hospitals?

By Jeff Levine
WebMD Washington Bureau Chief

April 18, 2000 -- HMO members who need heart bypass surgery are far more likely than other patients to have the operation done in a hospital where the death rate is higher than average, a new study finds. That's particularly true for those covered by a Medicare HMO, says a study published in the Journal of the American Medical Association.

While the research doesn't prove that HMOs are steering heart patients away from better or costlier care, researcher Lars Erickson, MD, MPH, tells WebMD that there's a "dramatic difference" between how HMO patients and so-called fee-for-service patients (those whose insurance pays for every procedure separately) are referred for treatment. Erickson is a pediatric cardiologist at Boston's Children's Hospital.

Erickson and colleagues analyzed the medical records of nearly 59,000 patients in New York state who underwent bypass surgery. New York, Erickson says, has done a "spectacular job" of collecting information on hospital death rates in an effort to show doctors and patients which institutions are doing the best job.

The hospitals were considered to have lower-than-average mortality rates if 2.1% or less of all patients admitted during the three-year study period died there; the rates were considered higher than average if 3.2% or more of the patients died.

HMO members were 23% less likely to get their heart operation at one of the hospitals with a lower-than-average death rate, Erickson says. For those in Medicare HMOs, the chance of getting into one of these hospitals was 39% less than for patients with fee-for-service insurance.

One possible explanation for the discrepancy is that HMOs may simply be getting a better deal from some hospitals to handle their bypass surgery patients. Other financial incentives may be at work; HMOs may give the primary care doctors who are responsible for managing patients' overall health care costs a price break for steering bypass patients to particular hospitals.

Dollar considerations may also have affected the Medicare HMO patients, who were virtually excluded from many of the low-death-rate hospitals surveyed. Hospitals that required patients to make a sizable copayment could be dropped from an HMO's list, Erickson says. He couldn't find any significant difference among the bypass patients or their doctors that would account for which hospitals the patients were sent to.

At the very least, the findings suggest that patients and doctors aren't heeding information about medical quality, even in a place like New York, where the data are considered top notch. "I think it's tragic," says Erickson. "If patients really don't consider that kind of information the most important thing on their list, I think that's fine, but they should at least be aware of the fact that the information exists."

In fact, quality isn't necessarily what drives patient choice. "A number of studies indicate that, in general, patients rank quality information far behind convenience, coverage, access, and cost in choosing health plans," Stephen Jencks, MD, of the Health Care Financing Administration, writes in an editorial accompanying the study.

Interestingly, Erickson's research came to the opposite conclusion of a study done in California: HMO patients there were more likely to get bypass surgery in a low-death-rate hospital than were their fee-for-service counterparts. A possible explanation, Erickson says, is that in California many hospitals perform only a small number of bypass operations. Low volume is often considered a marker for lower quality, and thus HMOs may choose to avoid doing business with such institutions.

On the other hand, New York requires that all hospitals doing bypass surgery have a high volume, making it ideal for this type of study. "I don't particularly think the HMOs are being malicious. I suspect that their response to this will be to say, 'Hey, this is great. Here's something we can do better,'" Erickson says.

But Laura Diamond, a spokeswoman for the American Association of Health Plans, an industry group, tells WebMD that the study is flawed. Diamond says that since the average death rate in New York hospitals was just 2.44%, the researchers' designation of high- and low-mortality hospitals was "arbitrary."

"Given the small difference in mortality rates, it's unlikely that patient outcomes were affected in a significant manner. It's also not clear if any of the managed care plans limited their contracts to either high- or low-mortality centers," Diamond says.

Vital Information:

HMO patients who need heart bypass surgery are more likely to have the operation in hospitals that have a higher-than-average death rate than patients with insurance that pays for each procedure separately.
Financial considerations may explain why HMO patients do not get to use the hospitals with the lowest death rates for bypass surgery, but this study does not prove that.
One researcher says that information about health care quality is available and should be sought by patients.

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