Press Releases

2004 Releases

For-Profit Health Plans Did Not Restrict Medicare Beneficiaries' Use of High-Cost Operative Procedures

For immediate release: January 07, 2004

Boston, MA— Researchers from the Harvard School of Public Health, comparing data on the rates of use of 12 specific high-cost operative procedures among Medicare beneficiaries in for-profit and not-for-profit health plans, found that, contrary to conventional wisdom, enrollees in for-profit health plans were no less likely to have the procedures done. The findings appear in the January 8, 2004 issue of the New England Journal of Medicine.

Testing the hypothesis that rates of use of the 12 procedures would be lower in for-profit health plans than in not-for-profit plans, the researchers analyzed Medicare HEDIS (Health Plan Employer Data and Information Set) data on more than 3.7 million Medicare beneficiaries 65 years of age or older who were enrolled in 254 health plans in 1997. Among the 12 high-cost procedures were: hysterectomy, prostatectomy, total knee replacement, cardiac catheterization, coronary-artery bypass grafting and reduction of femur fracture. The researchers found that, compared to the not-for-profit plans, none of the procedures had lower use rates in for-profit plans, and two of the procedures had significantly higher rates of use in the for-profit health plans.

“The Medicare program hopes to control costs by enrolling more of the elderly in health plans. Most of those health plans are now for-profit. We had expected that pressure to produce profits for investors in for-profit health plans would lead them to restrict use of high-cost procedures by enrollees, but our results suggest that this is not the case,” said Eric Schneider, lead author of the study, who is assistant professor in the Department of Health Policy and Management at the Harvard School of Public Health and associate physician at Brigham and Women’s Hospital. He added, “Fears that for-profit ownership of health plans will lead to unreasonable restrictions on high-cost procedures may not be justified. On the other hand, our results also raise questions about whether for-profit health plans will be any more effective than not-for-profit plans at controlling health care spending.”

The research was supported by grants from the Commonwealth Fund and the Agency for Health Care Research and Quality.

Listen to audio clips

Lead author Eric Schneider: Study results reveal unjustified fears about for-profit health care plans
MP3

For-profit plans are not a magic bullet
MP3

For further information, please contact:
Robin Herman
Office of Communications
Harvard School of Public Health
677 Huntington Avenue
Boston, MA 02115
Phone: 617-432-4752
Email: rherman@hsph.harvard.edu