Use of high-cost operative procedures by Medicare beneficiaries enrolled in for-profit and not-for-profit health plans

Abstract

Background: It is widely believed that for-profit health plans are more likely than not-for-profit health plans to respond to financial incentives by restricting access to care, especially access to high-cost procedures. Until recently, data to address this question have been limited.

Methods: We tested the hypothesis that the rates of use of 12 common high-cost procedures would be lower in for-profit health plans than in not-for-profit plans. Using standardized Medicare HEDIS data on 3,726,065 Medicare beneficiaries 65 years of age or older who were enrolled in 254 health plans during 1997, we compared for-profit and not-for-profit plans with respect to rates of cardiac catheterization, coronary-artery bypass grafting, percutaneous transluminal coronary angioplasty, carotid endarterectomy, reduction of femur fracture, total hip replacement, total knee replacement, partial colectomy, open cholecystectomy, closed cholecystectomy, hysterectomy, and prostatectomy. We adjusted the comparisons for sociodemographic case mix and for characteristics of the health plans other than their tax status, including the plans' location.

Results: The rates of carotid endarterectomy, cardiac catheterization, coronary-artery bypass grafting, and percutaneous transluminal coronary angioplasty were higher in for-profit health plans than they were in not-for-profit health plans; the rates of use of other common costly operative procedures were similar in the two types of plan. After adjustment for enrollee case mix and other characteristics of the plans, the for-profit plans had significantly higher rates than the not-for-profit plans for 2 of the 12 procedures we studied and had lower rates for none. The geographic locations of the health plans did not explain these findings.

Conclusions: Contrary to our expectations about the likely effects of financial incentives, the rates of use of high-cost operative procedures were not lower among beneficiaries enrolled in for-profit health plans than among those enrolled in not-for-profit health plans.