How Does Managed Care Manage the Frail Elderly? The Case of Hospital Readmissions in Fee-For-Service Versus HMO Systems

Abstract Objectives: This study examined whether hospital readmissions varied among the frail elderly in managed care versus fee-for-service (FFS) systems. Setting and Participants: Random sample of 450 patients, aged 65 and over, from a large vertically integrated health care system in San Diego, California. Participants were receiving physician-authorized home health and survived and 18-month follow-up period. Main Outcome Measures: Multiple logistic regression analyses were used to conduct comparisons of readmissions and preventable readmissions by plan type. Two methods to identify preventable readmissions were developed, one based on a computerized algorithm of service use patterns, and another based on blind clinical review. Results: The odds of having a preventable hospital readmission within 90 days of an index admission were 3.51 ( P = 0.06) to 5.82 ( P = 0.02) times as high for Medicare HMO enrollees compared to Medicare FFS participants, depending on the method used to assess preventability. Readmission patterns were similar for Medicare HMO enrollees and FFS study participants dually enrolled in Medicare and Medicaid. Conclusion: In this group of frail elderly Medicare beneficiaries, those enrolled in an HMO were more likely to have a preventable hospital readmission than those receiving care under FFS. These results suggest that policies promoting stringent approaches to utilization control (e.g., early hospital discharge, reduced levels of post-acute care, and restricted use of home health services) may be problematic for the frail elderly.