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Managed Care vs Traditional Insurance

John Rapoport, PhD; Stephen Gehlbach, MD, MPH; Stanley Lemeshow, PhD; Daniel Teres, MD

Arch Intern Med. 1992;152(11):2207-2212.

Abstract
Background.—
There is considerable evidence that members of managed care organizations use fewer hospital resources than patients covered by traditional health insurance. While intensive care might seem to be an unlikely setting for such differences to exist, the relationship between health coverage and use of intensive care has not been examined.

Methods.—
We conducted a cross-sectional analysis of consecutive intensive care unit admissions at a regional tertiary care teaching hospital. Patients in managed care plans (n=159) and with traditional insurance (n=389) were compared with respect to length of stay, hospital charges, charges for specific services, and use of mechanical ventilation. The analysis controlled for severity of illness, as measured by the Mortality Probability Model, case mix, and mortality. The whole sample as well as subsamples representing medical, emergency surgery, and elective surgery patients were examined.

Results.—
The managed care group, on average, had short stays (both hospital and intensive care unit), lower charges, and less use of mechanical ventilation than the traditionally insured group. Average differences of about 30% to 40% were observed. The finding held for the whole sample as well as the medical and emergency surgery subsamples. The differences were more pronounced in the patients with lowest severity of illness.

Conclusion.—
Even in a setting where there would appear to be relatively little room for discretion in treatment decisions, incentives associated with type of health insurance seemed to affect resource use.

(Arch Intern Med. 1992;152:2207-2212)

Author Affiliations
From the Department of Economics, Mount Holyoke College, South Hadley, Mass (Dr Rapoport); School of Public Health, University of Massachusetts, Amherst (Drs Gehlbach and Lemeshow); and Baystate Medical Center, Springfield, Mass, and Tufts University School of Medicine, Boston, Mass (Dr Teres).

Footnotes
Accepted for publication April 28, 1992.

Reprint requests to the Department of Economics, Mount Holyoke College, South Hadley, MA 01075 (Dr Rapoport).

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