Unbiased Analysis of Today's Healthcare Issues

Medicare Managed Care vs. FFS Beneficiaries: Who receives better care?

Written By: Jason Shafrin - Nov• 29•10

Do Medicare beneficiaries in fee-for-service plans access better physicians than those in Medicare Managed Care (MMC) plans?  Huesch (2010) attempts to answer this question for beneficiary access to quality cardiologists.  Using data on heart patients without AMI in Florida, the authors observes the following results:

No evidence was found that Medicare payor type significantly influenced the likelihood of using physicians with different admission length profiles.  Instead, MMC subscribers had significantly worse odds of seeing those physicians with favorable outcome profiles.

To control for within-hospital omitted variables such as hospital discharge policies and staffing levels, the author conducted a within hospital analysis to arrive at this conclusion.  In addition, all outcome measures are risk adjusted for patient health. Does this finding imply that MMC beneficiaries receive worse care than Medicare FFS beneficiaries? Maybe not.

..this study’s findings are largely consistent with unobservable adverse MMC member health status leading to marginally worse outcomes.  Put differently, observed outcome differences may just be a proxy for unobserved health status or illness severity.  Nonuniform concentration of MMC patients among particular physicians then ensures that a typical MMC patient will see a physician whose profiles have become slightly worse over time than his or her peers in the same hospital.

Determining whether patient outcomes are due to physician performance or unobserved differences in baseline patient health is the key to having valid measures.

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One Comment

  1. c3 says:

    Why does it feel like this study has an “agenda”? (I only saw the abstract). If I had to put the conclusion in layman’s terms it was:

    “Medicare Managed Care plans force you to see lower quality physicians”

    I think the key point of MMC is equal outcomes for lower cost. Of course, equal outcomes have to (as you already suggested) be risk adjusted. In other words, if those who stay with Medicare FFS are generally sicker (or vice versa) then…..

    apples and oranges etc

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