The impact of payor/provider type on health care use and expenditures among the frail elderly

Objectives. This study examined whether health care expenditures and usage by the frail elderly differ under three payor/provider types: Medicare fee for service. Medicare health maintenance organization (HMO), and dual Medicare-Medicaid enrollment. Methods. In-home interviews were conducted among 450 frail elderly patients of a San Diego, Calif, health care system. Cost and use data were collected from providers. Results. Analyses revealed no difference in total expenditures between fee-for-service and HMO enrollees but Medicare-Medicaid beneficiaries' expenditures were 46.8% higher than those for HMO enrollees and 52.2% higher than those for the fee-for-service group. Fee-for-service participants were less than half as likely as HMO enrollees to have two or more hospital admissions, but hospital usage rates between those two payor/provider groups did not differ. Nor were there payor/provider differences in access to home health care, but HMO home health care users received significantly fewer services than the others. Conclusions. The care provided to these HMO beneficiaries resulted in a combination of restricted home health use and higher multiple hospitalizations. This raises compelling questions for future research. For the dually enrolled, stronger cost containment may be required.