Medicare HMOs fail to control costs of colon surgery in elderly patients

The costs of caring for elderly Florida patients hospitalized for colon surgery are not reduced by Medicare HMOs, report University of South Florida researchers in the December issue of the Archives of Surgery.

Despite significantly shorter hospital stays, Medicare HMO beneficiaries who underwent colon resections — surgery to remove a diseased section of the large intestines — incurred the same overall hospital charges as patients covered by traditional fee-for-service Medicare. Consequently, the study found, daily hospital charges for the Medicare HMO group were higher than for the traditional Medicare group. The researchers assumed a direct relationship between hospital charges, available from the Agency for Health Care Administration’s Florida database, and actual costs, which are difficult to obtain from hospital executives.

“The Medicare HMO model failed as a cost-saving measure in this particular instance,” said the study’s principal investigator Michel Murr, MD, an associate professor of surgery in the USF College of Medicine. “Our finding appears to be confirmed by the recent departure of major HMOs from the Medicare market in Florida.”

Dr. Murr and his research team, headed by Dr. Jimmy Sung, examined the outcomes of all colon resections for patients age 70 and older in Florida from 1995 to 1999. Colon resection, usually performed to remove cancer, treat diverticulitis or remove a bowel blockage, is the most common abdominal surgery in elderly patients.

Regardless of the type of Medicare coverage, the researchers noted a 10 to 30 percent increase in hospital charges for colon resections in the four-year study period. Even with an older, frailer patient population and overall decline in length of hospital stay, deaths and complications from this procedure remained low.

The intention of Medicare HMOs is to reduce waste in the system by trying to eliminate unnecessary and inappropriate care, while giving providers incentives to use cost-efficient care. The elderly who opt to enroll in a Medicare HMO, a managed care model that emphasizes preventive care and offers beneficiaries less out-of-pocket costs, tend to be younger and have fewer chronic illnesses than their counterparts who stick with traditional Medicare coverage.

“Medicare HMO patients typically have shorter hospital stays and less secondary illnesses like diabetes, hypertension and pulmonary diseases,” Dr. Murr said. “You’d expect operating on these healthier patients would result in lower charges – but it does not.”

Results of the Florida study were similar to other studies that have concluded rates of high-cost surgical procedures were not reduced among Medicare HMO enrollees. More research is warranted to determine why daily hospital charges were higher for the Medicare HMO group, Dr. Murr said.

“Unless we adequately plan for an ever-growing population of elderly surgical patients, our health care expenditures will continue to skyrocket.”