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Chun-Chih Huang, International Health and Development, Tulane University, 1440 Canal Street, #2200, New Orleans, LA 70112, 504-988-1313, chuang1@tulane.edu and M. Mahmud Khan, PhD, Health Systems Management, Tulane University, 1440 Canal Street, #1900, New Orleans, LA 70112.
The Balanced Budget Act in 1997 introduced the new payment methodology for Medicare managed care plans. However, many managed care organizations started to withdraw from Medicare market after the implementation of the Act, adversely affecting the accessibility to managed care plans by Medicare beneficiaries. The objective of the study is to examine the determinants of Medicare plus Choice Coordinated Care Plan withdrawals or change in benefit packages in the post-BBA era. The analysis will be able to provide policy suggestions for Medicare reform initiatives in the future. Data on HMO plans for the years 1999 to 2002 were obtained from various sources for this pooled cross-section and time series analyses. Samples were organized as per county, per contract, and per county-contract units and analyses were carried out at both the levels. Several factors including organizational attributes, geographic characteristics, performance measures, plan attributes, degree of market competition, and time were used for the study. Two-Part model and multinomial probit model were employed for data analysis.
The results indicate that M+C plans in counties with higher M+C payment level, higher market competition among healthcare providers, and higher HMO market penetration are less likely to withdraw. The MCOs (managed care organizations) with larger enrollment size, better control over enrollees’ medical utilization and quality of care are also less likely to withdraw. The study suggests that, economic performance, risk-environment and beneficiaries’ knowledge about HMO structure help the HMO plans to survive in a market. Clearly the BBA reimbursement was viewed as too-low by many MCOs in rural areas. For ensuring the survival of HMO plans in a local area, the policy makers should devise a flexible reimbursement system taking into account not only the cost of providing services in the area but also the quantity and quality of care provided by Medicare managed care programs.
Learning Objectives:
Keywords: Economic Analysis, HMOs
Presenting author's disclosure statement:
I do not have any significant financial interest/arrangement or affiliation with any organization/institution whose products or services are being discussed in this session.