For-profit insurers do not necessarily skimp on surgical care

To researchers' surprise, a study found that for-profit health insurers are just as likely as not-for-profit ones to pay for costly operations for the elderly such as heart bypasses and knee replacements.

The study of 1997 data on 12 operations and other procedures showed that for-profit plans were neither denying care nor holding down costs as much as commonly believed, the researchers said.

The study was led by Dr. Eric C. Schneider, assistant professor of health policy and management at the Harvard School of Public Health, and was published in Thursday's New England Journal of Medicine.

"I think in some ways it's reassuring," said Dr. Robert Berenson, who oversaw Medicare managed care contracts from 1998 through 2000 and now is a senior fellow at the nonpartisan Urban Institute. "The public's concerned HMOs are denying services, and this shows they're not."

The study looked at patients in Medicare's managed care program, in which hundreds of private-sector insurance companies contract with the government to provide people with coverage.

Patients in for-profit plans were actually more likely to undergo two operations: minimally invasive gallbladder removal and removal of a cancerous colon segment.

But after adjusting statistically for differences among insurance plans and patients, the researchers found the rates were about the same for such procedures as hip and knee replacement, prostate removal, cardiac catheterization, heart bypass, angioplasty and clearing out a clogged neck artery.

However, some experts say the Medicare+Choice program has changed greatly since 1997 and the study's findings may not necessarily apply today. Many insurers that were losing money have quit the program since then. And public backlash led many managed care programs to back off on cost controls.

The study was based on government data on 3.7 million Medicare beneficiaries in 254 health plans.

Schneider said the study's "counterintuitive" findings are probably due to some combination of factors. Among them: for-profit and not-for-profit plans may actually have similar incentives and cost-cutting approaches, and the for-profits are worrying more about lawsuits and bad publicity for denying care.

Dr. Hoangmai Pham, a researcher at the Center for Studying Health System Change, said the most likely explanation is that not-for-profit insurers are offering more preventive care, which reduces the need for surgery.

Just over 11 percent of Medicare's 41 million enrollees -- 4.6 million people -- are in for-profit or not-for-profit managed care plans. The percentage of enrollees in not-for-profit plans has risen from 31 percent to 43 percent since 1999, according to the American Association of Health Plans/Health Insurance Association of America.

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