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Score One for Nonprofit Plans

The notion that managed care can improve health care quality and control costs has guided federal policy for years. Medicare beneficiaries, in particular, are encouraged to enroll in health plans, mostly those of the for-profit variety. But what does the evidence say about the actual performance of private plans?

In a Fund-supported American Journal of Medicine study, Eric Schneider, M.D., M.Sc., a researcher at the Harvard School of Public Health, finds along with his colleagues that Medicare beneficiaries enrolled in for-profit health plans received significantly lower-quality care than beneficiaries in not-for-profit plans in four important areas. The study relied on standardized data that health plans are required to report—the Health Plan Employer Data and Information Set (HEDIS).

For-profit plans scored 7.3 percentage points lower than not-for-profit health plans on breast cancer screenings, 14.1 percentage points lower on diabetic eye exams, 12.1 percentage points lower on beta-blockers administered after heart attack, and 18.3 percentage points lower on follow-up after hospitalization for mental illness. The differences persisted even after the researchers adjusted for sociodemographic factors, geographical variables, and health plan characteristics. In three of four services (except beta-blockers), the differences remained statistically significant.

There appears to be a clear difference in performance between not-for-profit and for-profit plans, the reasons for which need to be better understood and closely monitored, the authors say. They argue that efforts to address these differences ought to be pursued as part of a broader strategy to improve health plan quality and the quality of services provided to those enrolled in both Medicare Advantage and the traditional fee-for-service program.

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