An important goal of HMOs and health plan sponsors is to reduce inappropriate use of hospital emergency rooms. Instead, enrollees are required or encouraged to select a primary care physician and clinic and to establish a "primary care home."
How is utilization measured and reported? HMOs in several states submit HEDIS utilization of care reports to state agencies in which they report, among other things, the use of hospital emergency rooms by their enrollees. In preparing new editions of Minnesota Managed Care Review and Michigan Managed Care Review, we analyzed those reports for HMO enrollees in those two states.
In Minnesota, we found that the average rate of emergency room for commercial HMO enrollees in 1999 was 124.22 visits per 1,000 member years. That was up from 106.90 visits per 1,000 in 1998 and 111.26 in 1997. The figure below shows the utilization rates for the past three years for the largest health plans.
Medicaid managed care enrollees in Minnesota use emergency rooms at a much higher rate. The average rate in Minnesota in 1999 was 509.60 visits per 1,000 members, up from 434.33 visits in 1998 and 476.24 in 1997.
So is the upward trend in Minnesota a problem? It turns out that the rate for commercial enrollees is much higher in Michigan. We found that the average emergency room use rate for commercial HMO enrollees in Michigan was 213.75 visits per 1,000 members. That is up from 208.35 in 1998 though down from 239.10 in 1997. We don't have any national or regional averages to compare.
Newspaper articles in Minneapolis and Denver, among others, have pointed to increased emergency room use, to the point that ambulances must sometimes be diverted to another hospital because the ER at the nearest hospital has no capacity for additional patients.
We don't know the answer but want to suggest three possible reasons for the increase:
1. HMOs haven't taught their members what to do
2. Patients don't follow what they learned
3. There is a shortage of primary care capacity
We are most intrigued by the third possibility, that is, that patients call their clinic to describe a problem. They are told that no appointments are available for the next few days. If the patient is seriously concerned then maybe they should go to the emergency room. In that scenario, it is likely that the clinic does not bear significant risk for utilization of its patients, or it might be more deliberate about sending patients to ERs.
Here are some of the other key findings from Minnesota Managed Care Review 2000, Part Two.
Enrollment in insured HMO plans dropped by 5.5 percent in the first nine months of 2000. Part of this reflects the decline in Medicare HMO enrollment and a continuing shift of employers to self-funded plans, sometimes administered by the same HMOs. But it also reflects the fact that HMO premiums increased by an average of 11.7 percent in 1999, faster in Minnesota than in other comparable states.
Inpatient hospital utilization for HMO enrollees declined in 1999. The report shows that the average of inpatient hospital days per 1,000 enrollees went from 203 days in 1998 down to 185 days in 1999. In 1999, hospitals in the Twin Cities earned an average profit of 3.7 percent of net patient revenues of $3.2 billion. Although hospitals generally lost money on operations, with the help of $225.0 million of other revenues (investments, philanthropy and government subsidies), they ended 1999 with a profit of $119.9 million. That is less than in 1998, when they had profits of $155.5 million, or 5.3 percent of revenues. Four of the largest outstate hospitals reported profits of 10 percent or more in 1999. Average inpatient occupancy rates in the Twin Cities increased slightly, from 64.0 percent in 1998 to 65.8 percent.
For additional information on the new report, go to: http://www.allanbaumgarten.com/cfusion/MN_report.cfm