Profiling Resource Use by Primary-Care Practices: Managed Medicare Implications

Article excerpt


In the near future, the proportion of Medicare beneficiaries enrolled in managed care plans is likely to grow from the 10 percent enrolled in 1995 (Health Care Financing Administration, 1996) to at least 50 percent or more. Private health plans will need to be developed and expanded to accommodate the continuing growth in this market. Designing a managed care plan is a complex task, particularly if it is to serve the elderly (Blankenau, 1993; Kissick, 1993). Government decisionmakers, private insurers, and providers all need information to plan and evaluate changes to Medicare. What data can they use to examine changes in health care use under a reorganized delivery system? What information will health plans need to identify cost-effective practices, control inappropriate service use, and encourage preventive services? Can evidence gleaned from the current huge FFS program be valuable to the designers of the new managed Medicare? The evidence we provide in this article helps meet these needs.

This analysis demonstrates the feasibility of developing a comprehensive profile of Medicare patient care use and cost for office-based primary-care practices. Using claims data from three States, we generate practice profiles of the utilization and costs of beneficiaries who receive the majority of their primary-care from a single provider, in essence a "voluntary" (i.e., non-mandatory) gatekeeper. Although the practices we profile are not formal managed care gatekeepers, we assume that they behave as the patient's agent and medical care manager. We recognize that some beneficiaries may not choose to regularly consult a primary-care physician, but our previous research has shown that even under FFS, most Medicare beneficiaries do rely on a single primary-care physician for the majority of their ambulatory care (Garnick et al., 1994; Weiner et al., 1995; Parente et al., 1995).

Examining patient care managed by primary-care physicians is not a new area of research. Many studies have demonstrated variation in health service use and expenditures. Wennberg and Gittlesohn's (1973) pioneering research in population-based variations in health service delivery has been followed by subsequent investigations focusing on hospital services (Chassin et al., 1986; Gittlesohn and Powe, 1995), ambulatory services (Kelman and Thomas, 1988; Stuart and Steinwachs, 1993; Weiner et al., 1996), physician services (Steno and Folland, 1988; Hartley et al., 1987; Greenfield et al., 1992; Welch, Miller, and Welch, 1994), specialty differences (Kravitz et al., 1992), quality of care (Weiner et al., 1995), primary-care providers (Greenwald et al., 1984), and office-based practices (Cherkin et al., 1987).

The provider profile is a practical analytic tool produced, in large part, by advances in health services research. These profiles provide managed care plans with information to improve the efficiency and quality of the care that is delivered (Physician Payment Review Commission, 1992; Lasker, Shapiro, and Tucker, 1992; Garnick et al., 1994). Creating practice profiles from existing public use data sources can provide valuable strategic information to health plans and policymakers as the Medicare managed care market develops.

This study builds upon previous variations research. Specifically, we identify the practice characteristics of office-based primary-care physicians and group practices that are most likely to be associated with significant differences in Medicare beneficiaries' health service use and cost. This type of office-based analysis has yet to be attempted on Medicare's new National Claims History file (NCHF) data base. Although other studies have taken a similar approach by analyzing claims data, this is the first study to examine cross-State variation in office-based practices using a 100-percent sample of a patient population during an entire year of service. Moreover, this is one of the first studies to demonstrate the potential of using Medicare claims data to comprehensively profile the inpatient and ambulatory service use and expenditures of beneficiaries from the perspective of their usual primary-care source. …