An analysis of disenrollment from Medicare managed care plans by medicare beneficiaries with diabetes

Research Objective: The purpose of this work is to determine whether high-cost high-risk Medicare patients with diabetes in managed care plans disenroll more quickly than lower-cost lower-risk Medicare patients with diabetes, If high-cost high-risk patients with diabetes do disenroll more quickly, Medicare managed care plans benefit financially from favorable disenrollment. Study Design: Time in a health maintenance organization (HMO) was modeled using a duration model with the number of months in the HMO as the dependent variable, controlling for censoring. Data were drawn from a representative sample of Medicare patients with diabetes in the FFS sector in 1994. The panel was followed for 4 years, 1995-1998. The sample included all 6839 individuals who enrolled in a Medicare HMO for at least 1 month during the 48-month observation window. Principal Findings: We found a statistically significant negative association between the time in an HMO and pre-enrollment Part B expenditures (beta = -0.00001, t = -4.39) and any Part A expenditures (beta = -0.465, t = -1.98), and 2 of 4 diabetic complications (heart complications: beta = -0.0773 t = -4.61, vision complications beta = -0.2474, t = -1.94). Of the plan characteristics, only the drug benefit variable (beta = 0.151, t = 5.64) had a statistically significant coefficient.