Contrasts in HMO and fee-for-service performance

Abstract

This study compares various aspects of HMO performance in 10 plans with that of the fee-for-service system for the Medicaid population. Additionally, it examines utilization differences between several types of HMO's, grouped according to organization and provider payment. Four areas of behavior were studied--enrollment selectivity, utilization of services, accessibility of care, and satisfaction. The only significant difference between the two systems was in hospital utilization. Group-practice MNO's had significantly lower hospital utilization than the fee-for-service groups: foundation HMO's did not. This difference seems to indicate that capitation payment to an HMO alone is not significant enough to produce major changes in utilization and that the organized multispecialty group-practice arrangement with largely salaried physicians may be more significant. For the other variables--previous health status, ambulatory-care use (including preventive care), accessibility, and satisfaction--the two groups were remarkably similar.