For-Profit, Not-For-Profit Plans Approve Same Rate of Procedures for Medicare Beneficiaries, Study Finds

Medicare beneficiaries enrolled in for-profit health plans had about the same usage rate of high-cost procedures as beneficiaries enrolled in not-for-profit plans, a study published Thursday in the New England Journal of Medicine found, the Wall Street Journal reports (Forelle, Wall Street Journal, 1/8). Dr. Eric Schneider, assistant professor at the Harvard School of Public Health's Department of Health Policy and Management, and colleagues analyzed the records of more than 3.7 million Medicare beneficiaries enrolled in 254 managed care health plans in 1997. Researchers compared usage rates of 12 common high-cost procedures -- including hysterectomy, prostate removal, hip and knee replacements, coronary artery bypass grafting and coronary angioplasty -- between beneficiaries in the for-profit and not-for-profit plans (Cox News/Arizona Daily Star, 1/8). After adjusting statistically for differences among plans and beneficiaries, researchers found that usage rates for hip and knee replacements, prostate removal, cardiac catheterization, heart bypass, angioplasty and neck artery procedures were about the same in for-profit and not-for-profit plans (AP/Long Island Newsday, 1/8). Beneficiaries enrolled in for-profit plans were more likely than those in not-for-profit plans to undergo minimally invasive gallbladder removal and removal of a cancerous colon segment -- the only difference that was statistically meaningful after data had been adjusted. Researchers also adjusted the data to account for different predominance of procedures in different counties; the results remained the same.

According to the Journal, the study "surprised researchers who had surmised for-profits might deny pricey procedures." Schneider said, "We actually didn't believe it when we first saw the unadjusted numbers. That's why we went to relatively great lengths to prove to ourselves that it wasn't some sort of statistical artifact." The study suggests that Medicare beneficiaries who enroll in for-profit plans will receive comparable levels of care as those who enroll in not-for-profit plans, the Journal reports. It also could show that for-profit plans might be "less effective in controlling costs than some policymakers imagine," according to the Journal (Wall Street Journal, 1/8). Schneider said that for-profit health plans might cover more procedures than researchers expected because it is "very difficult ... to change the decision-making of physicians and patients. And with liability concerns, health plans may feel that it would be too risky to deny a procedure" (Heldt Powell, Boston Herald, 1/8). He added that not-for-profit plans may use cost-reduction approaches similar to those of for-profits (AP/Long Island Newsday, 1/8). An abstract of the study is available online.