For-profit health plans did not restrict Medicare beneficiaries’ use of high-cost operative procedures

Testing the hypothesis that rates of use of 12 high-cost procedures would be lower in for-profit health plans than in not-for-profit plans, researchers analyzed Medicare HEDIS (Health Plan Employer Data and Information Set) data on more than 3.7 million Medicare beneficiaries 65 years of age or older who were enrolled in 254 health plans in 1997. The researchers found that, compared to the not-for-profit plans, none of the procedures had lower use rates in for-profit plans. “The Medicare program hopes to control costs by enrolling more of the elderly in health plans.  Most of those health plans are now for-profit.  We had expected that pressure to produce profits for investors in for-profit health plans would lead them to restrict use of high-cost procedures by enrollees, but our results suggest that this is not the case,” said Eric Schneider, lead author of the study, who is assistant professor in the Department of Health Policy and Management at the Harvard School of Public Health.    The research was supported by grants from the Commonwealth Fund and the Agency for Health Care Research and Quality. The findings appeared in the Jan. 8, 2004 issue of the New England Journal of Medicine.