A Study of Healthcare Services Received under Alternative Medicare Insurance Plans

An analysis of detailed medical encounter records for a random sample of one million Missouri Medicare beneficiaries reveals dramatically lower usage of medical services by individuals enrolled in Medicare Advantage Organization health maintenance programs (HMO plans) than by individuals enrolled in traditional Medicare fee-for-service (FFS) plans. Differences in usage and mix of services in five major venues (hospital inpatient, hospital outpatient, general carrier services, home health, and skilled nursing facilities) persist when we control statistically for medical condition and demographic characteristics of insured individuals, availability of medical services in the counties where they reside, and reimbursement arrangements for beneficiaries’ primary-care providers. Continuing growth in enrollment for Medicare Advantage plans is therefore expected to have a substantial impact on the resources required for delivery of healthcare services and upon the venues in which medical services for the elderly will be provided.