Quality of Care in For-profit and Not-for-profit Health Plans Enrolling Medicare Beneficiaries

Background: For-profit health plans now enroll the majority of Medicare beneficiaries who select managed care. Prior research has produced conflicting results about whether for-profit health plans provide lower quality of care.

Objective: The objective was to compare the quality of care delivered by for-profit and not-for-profit health plans using Medicare Health Plan Employer Data and Information Set (HEDIS) clinical measures.

Research Design: This was an observational study comparing HEDIS scores in for-profit and not-for-profit health plans that enrolled Medicare beneficiaries in the United States during 1997.

Outcome Measures: Outcome measures included health plan quality scores on each of 4 clinical services assessed by HEDIS: breast cancer screening, diabetic eye examination, beta-blocker medication after myocardial infarction, and follow-up after hospitalization for mental illness.

Results: The quality of care was lower in for-profit health plans than not-for-profit health plans on all 4 of the HEDIS measures we studied (67.5% vs 74.8% for breast cancer screening, 43.7% vs 57.7% for diabetic eye examination, 63.1% vs 75.2% for beta-blocker medication after myocardial infarction, and 42.1% vs 60.4% for follow-up after hospitalization for mental illness). Adjustment for sociodemographic case-mix and health plan characteristics reduced but did not eliminate the differences, which remained statistically significant for 3 of the 4 measures (not beta-blocker medication after myocardial infarction). Different geographic locations of for-profit and not-for-profit health plans did not explain these differences.

Conclusion: By using standardized performance measures applied in a mandatory measurement program, we found that for-profit health plans provide lower quality of care than not-for-profit health plans. Special efforts to monitor and improve the quality of for-profit health plans may be warranted.