How Long Will it Take for the Bureaucratic Morons in DC to Realize That Medicare HMOs Don't Show Hoped-For Savings OR "Who Remembers the Gold-Plus Plan in Florida in the 1980's"? December 20, 2004 06:22 PM ET

NEW YORK (Reuters Health) - The costs of colon surgery for enrollees in Medicare health maintenance organizations (HMOs) are no lower than those of similar patients participating in traditional Medicare, according to Tampa-based researchers.

Managed care plans are looked on as an important way to keep costs down under the new Medicare reform program that goes into effect next year. The US government has increased incentives to private HMOs to participate in providing Medicare services to beneficiaries.

However, investigators at the University of South Florida Health Sciences Center found that daily hospital costs appear to be higher for HMOs, canceling out any savings achieved through shorter lengths of stay in the hospital.

Dr. Michel M. Murr and associates evaluated Florida hospital discharge data from 1995 through the end of 1999, for patients 70 years of age or older who underwent surgical removal of part of the colon.

Over the study period, the average length of stay for the approximately 31,000 procedures tended to drop, but inflation-adjusted hospital charges increased significantly, the team reports in the Archives of Surgery.

Length of stay was one of the most important factors affecting hospital charges, and it was significantly lower in Medicare HMOs.

Nevertheless, overall hospital charges for the procedures were similar in the two groups, implying that per-diem charges were higher in the HMO group. The team points out that other research has documented higher administrative costs and payment rates in Medicare HMOs.

"Unless we adequately plan for an ever-growing population of elderly surgical patients," Murr concluded in a statement, "our health care expenditures will continue to skyrocket."

SOURCE: Archives of Surgery, December 2004.

Failure of Medicare Health Maintenance Organizations to Control the Cost of Colon Resections in Elderly Patients

Jimmy Sung, MD, JD; Mike Wessel, BS; Scott F. Gallagher, MD; Jorge Marcet, MD; Michel M. Murr, MD

Arch Surg. 2004;139:1366-1370.

Hypothesis  Medicare health maintenance organizations (HMOs) do not reduce the cost of colon resections in elderly patients.

Design  Review of prospectively collected and mandatory reported Florida hospital discharge data from January 1, 1995, through December 31, 1999. We used the ^c2 test for trend analysis to assess significant change in age, mortality, and complications, and the Kruskal-Wallis test to compare inflation-adjusted hospital charges, comorbidity, length of stay, and secondary procedures.

Setting  Administrative database including all community- and university-based surgeons.

Patients  All patients 70 years or older who underwent colon resection from 1995 through 1999.

Main Outcome Measures  Age, mortality, complications, length of stay, number of comorbidities and secondary procedures, hospital charges, and type of colon resection.

Results  The frequency of different colon resections increased by 10% to 30% from 1995 through 1999. Total hospital charges increased during the study period (P<.001), whereas mortality and complications remained unchanged. Length of stay, number of secondary procedures, and comorbidities were the most significant contributors to hospital charges. Despite a significantly shorter hospital stay, Medicare HMO patients had similar hospital charges to those of original Medicare patients.

Conclusions  Colon resections can be undertaken in elderly patients with acceptable morbidity. Per diem charges were higher for patients covered by Medicare HMO, despite their having shorter lengths of stay, fewer comorbidities, and fewer secondary procedures.

Author Affiliations: Department of Surgery (Drs Sung, Gallagher, Marcet, and Murr) and School of Public Health (Mr Wessel), University of South Florida Health Sciences Center, Tampa.