Study Backs Managed Care Hmos Cheaper, Safe, Study Finds

Article excerpt

Health maintenance organizations and other managed health care programs are cutting hospital costs without hurting the quality of care, says a study released Wednesday.

Compared with national averages, hospitals in cities with high use of managed-care plans had 11.2 percent lower costs, 6.3 percent shorter stays and 5.3 percent lower death rates, said the study by KPMG Peat Marwick, a management consultant.

Although the rate of illness complications at hospitals in high managed-care cities was 0.9 percent higher than the national average, KPMG said that finding was not statistically significant.

The study also said high-managed care hospitals generally performed better than those in cities with medium or low use of managed care.

Health care economists said the results were heartening, especially considering the growing public perception that many managed health care companies withhold necessary services to boost their profits.

But they said the study has statistical flaws that might prevent it from portraying a fully accurate picture.

"One must be cautious in generalizing that intensive managed care has no negative impacts on quality, but the results of the study are encouraging," said Jonathan Weiner, a professor of health policy and mana gement at the Johns Hopkins School of Public Health in Baltimore.

The study covered 1,400 hospitals in the nation's top 50 cities during 1994. …