Health Care d Expenditures of Medicare HMO Disenrollees
Parente, S. T.
Date of Pub
Evans, W., N., Schoenman, J. A., Finch, M. D.
We examine the impact of the first waveof Medicare health maintenance organiza-tion HMO withdrawals. With data fromCMS and
United Health Group, we esti-mate use and expenditure changes between1998 and 1999 for HMO enrollees whowere involuntarily
dropped from their planand returned to fee-for-service (FFS)Medicare using a difference-in-differencemodel. Compared to those
who voluntarilyleft an HMO, involuntarily disenrolled ben-eficiaries had higher out-of-pocket expendi-tures, an 80 percent
decrease in physicianvisits, 38 percent higher emergency room(ER) use and a higher probability of dying.The results suggest
beneficiaries face signif-icant costs and reduced health outcomesfrom unstable Medicare managed caremarkets.