Health Care Financing Review

Ambulatory and Community-Based Care
Summer 1999, Volume 20, Number 4

Ambulatory and Community-Based Services
Fred Thomas, C.P.A., M.B.A., M.S
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The shift in the site of service delivery from inpatient and institutional to ambulatory and community settings has been prompted by concerns over cost and the prospect for improving the quality of life. In response to these concerns, Medicare has implemented several demonstrations that emphasize ambulatory and community-based services. In this issue, articles are presented on four demonstrations, which focus on the extent to which coordinated care models reduce health care costs, and the cost effectiveness and beneficiary outcomes of disease-specific programs. Two articles are included on home health. One examines home health care in relation to the other Medicare post-acute benefits, and the other focuses on the use of home health care in the treatment of end stage renal disease (ESRD). Finally, two articles report on Section 1915c Medicaid home and community- based waiver programs.

S/HMO Versus TEFRA HMO Enrollees: Analysis of Expenditures
Bryan Dowd, Ph.D., Steve Hillson, M.D., Tom VonSternberg, M.D., and Lucy Rose Fischer, Ph.D.
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This study compares expenditures on health care services for enrollees in a social health maintenance organization (S/HMO) and a Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA)-risk Medicare health maintenance organization (HMO). In addition to the traditional Medicare services covered by the TEFRA HMO, the S/HMO provided a long-term care (LTC) benefit and case management services for chronic illness. There do not appear to be any overall savings associated with S/HMO membership, including any savings from substitution of S/HMO-specific services for other, traditional services covered by both the S/HMO and the TEFRA HMO.

Cost and Outcomes of Medicare Reimbursement for HMO Preventive Services
Donald L. Patrick, Ph.D., M.S.P.H., David Grembowski, Ph.D., Mary Durham, Ph.D., Shirley A.A. Beresford, Ph.D., Paula Diehr, Ph.D., Jenifer Ehreth, Ph.D., Julia Hecht, Ph.D., M.P.H., Joe Picciano, and William Beery, M.P.H.
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Medicare beneficiaries enrolled in a health maintenance organization (HMO) were randomized to a preventive services benefit package for 2 years or to usual care. At 24- and 48-month followups, the treatment group had completed more advance directives, participated in more exercise, and consumed less dietary fat than the control group. Unexpectedly, more deaths occurred in the treatment group. Surviving treatment-group enrollees reported higher satisfaction with health, less decline in self-rated health status, and fewer depressive symptoms than surviving control participants. Despite these changes, the intervention did not yield lower cost per quality-adjusted life year in this historically prevention- oriented HMO.

Effects of the Medicare Alzheimer's Disease Demonstration on Medicare Expenditures
Robert Newcomer, Ph.D., Robert Miller, Ph.D., Ted Clay, M.S., and Patrick Fox, Ph.D.
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Applicants were randomized either into a group with a limited Medicare community care service benefit and case management or into a control group receiving their regular medical care. Analyses assess whether or not community care management affected health care use. A tendency toward reduced expenditures was observed for the treatment group, combining all demonstration sites, and when observing each separately. These differences were or approached statistical significance in two sites for Medicare Part A and Parts A and B expenditures averaged over 3 years. Expenditure reductions approached budget neutrality with program costs in two sites.

Long-Term Care Eligibility Criteria for People with Alzheimer's Disease
Patrick Fox, Ph.D., M.S.W., Katie Maslow, M.S.W., and Xiulan Zhang, Ph.D.
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Long-term care (LTC) eligibility criteria are applied to a sample of 8,437 people with dementia enrolled in the Medicare Alzheimer's Disease Demonstration. The authors find that mental-status-test cutoff points substantially affect the pool of potential beneficiaries. Functional criteria alone leave out people with relatively severe dementia and with behavioral problems. It is therefore important to consider both behavioral and mental-status-test criteria in establishing eligibility for community-based services for people with dementia.

Case Management for High-Cost Medicare Beneficiaries
Jennifer L. Schore, M.S.W., Randall S. Brown, Ph.D., and Valerie A. Cheh, Ph.D.
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We estimated the effects of three Health Care Financing Administration (HCFA)-funded case management demonstrations for high-cost Medicare beneficiaries in the fee-for-service (FFS) sector. Participating beneficiaries were randomly assigned to receive case management plus regular Medicare benefits or regular benefits only. None of the demonstrations improved self-care or health or reduced Medicare spending. Despite the lack of effects of these interventions, case management might be cost-effective if it includes greater involvement of physicians, is more well-defined and goal-oriented, and incorporates financial incentives to generate savings in Medicare costs. Models incorporating these changes should be investigated before abandoning Medicare case management interventions.

Impact of the BBA on Post-Acute Utilization
Barbara Gage, Ph.D.
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In this article, the author summarizes recent changes in Medicare post-acute payment policies, discusses the implications of certain design and implementation issues, and analyzes whether different types of patients are using skilled nursing facilities (SNFs), home health agencies (HHAs), and rehabilitation hospitals and units. If similar populations are treated by these three types of providers, service patterns may be affected by the financial incentives in the new, more restrictive payment policies. The author describes new post-acute care (PAC) payment policies, service patterns prior to the Balanced Budget Act of 1997 (BBA), differences in the populations using these providers, and possible effects of the new payment systems on site-of-care decisions.

Use of Home Health Care by ESRD and Medicare Beneficiaries
Teresa L. Kauf, Ph.D., and Ya-Chen Tina Shih, Ph.D.
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The use of home health care (HHC) services among Medicare end stage renal disease (ESRD) enrollees remains an under-studied area. In this article, the authors report sociodemographic characteristics and patterns of HHC utilization by Medicare-covered ESRD patients. The authors found that those who were female, age 85 or over, diabetic, and residing in the New England or West South Central census divisions were more likely to use HHC services and were also more intensive users. Analysis of use patterns in such high-risk populations is necessary to ensure that health policy changes do not have unintended consequences for vulnerable patients.

Trends and Issues in the Medicaid 1915(c) Waiver Program
Nancy A. Miller, Ph.D., Sarah Ramsland, and Charlene Harrington, Ph.D.
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Over the past 15 years, Medicaid 1915(c) home and community-based waivers have made a substantial contribution to States' efforts to transform their long-term care (LTC) systems from largely institutional to community-based systems. By 1997, every State had implemented a waiver program for at least some subgroups of individuals with disabilities, and expenditures increased from $3.8 million in 1982 to more than $8.1 billion in 1997. Emerging, as well as long-standing, policy issues related to the waiver program include concerns with access, variation in availability by disability group, State decisions related to the provision of community-based LTC, and evidence on effectiveness.

Home-Care Use and Expenditures Among Medicaid Beneficiaries with AIDS
Usha Sambamoorthi, Ph.D., Sara R. Collins, Ph.D., Stephen Crystal, Ph.D., and James Walkup, Ph.D.
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This article compares the use and cost of home-care services among traditional Medicaid recipients with acquired immunodeficiency syndrome (AIDS) and among participants in a statewide Human Immunodeficiency Virus (HIV)/AIDS-specific home and community-based Medicaid waiver program in New Jersey, using Medicaid claims and AIDS surveillance data. Waiver program participation appears to mitigate racial and risk group differences in the probability of home-care use. However, the program's successes are confined to its enrollees of which subgroups of the AIDS population are underrepresented. Our findings suggest the need to expand access to home-care programs to racial minorities and injection drug users (IDUs) with HIV/AIDS.

Cost of Smoking to the Medicare Program, 1993
Xiulan Zhang, Ph.D., Leonard Miller, Ph.D., Wendy Max, Ph.D., and Dorothy P. Rice, Sc.D. (Hon.)
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Medicare expenditures attributable to smoking in 1993 were estimated using a multivariate model that related expenditures to smoking history, health status, and the propensity to have had a smoking-related disease, controlling for sociodemographics, economic variables, and other risk factors. Smoking-attributable Medicare expenditures are presented separately for each State and by type of expenditure. Nationally, smoking accounted for 9.4 percent of Medicare expenditures-$14.2 billion, with considerable variation among States. Smoking accounted for 11.4 percent of Medicare expenditures for hospital care, 11.3 percent of nursing home care, 5.9 percent of home health care, and 5.6 percent of ambulatory care.

Selection Experiences in Medicare HMOs: Pre-Enrollment Expenditures
Kathleen Thiede Call, Ph.D., Bryan Dowd, Ph.D., Roger Feldman, Ph.D., and Matthew Maciejewski, Ph.D.
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Using 1993 and 1994 data, the authors examine whether beneficiaries who enroll in a Medicare health maintenance organization (HMO), including those enrolling for only a short period of time, have lower expenditures than continuous fee-for-ser-vice (FFS) beneficiaries the year prior to enrollment. We also test whether biased selection varies by the level of HMO market penetration and the rate of market-share growth. We find favorable selection associated with enrollment into Medicare HMOs, which declines as market share increases but does not disappear. Among short-term enrollees, we find unfavorable selection, however, selection bias was not sensitive to market characteristics.

MCBS Highlights: Home Health, Facility, and Community Populations
Lauren A. Murray and Andrew E. Shatto
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The Medicare Current Beneficiary Survey (MCBS) is a powerful tool for analyzing the Medicare population. Based on a stratified random sample, we can derive information about the health care use, expenditure, and financing of Medicare's 39 million enrollees. We can also learn about those enrollees' health status, living arrangements, and access to and satisfaction with care. Figures 1-3 present findings on Medicare beneficiaries in three very different living arrangements. We compare the health status and health expenditures of beneficiaries residing in the community and receiving home health ser-vices, beneficiaries residing in long-term care facilities, and beneficiaries residing in the community and not receiving home health services.