Differences in Quality of Care by Insurance Plan: A Fee-For-Service vs. Health Maintenance Organization Comparison

The history of health insurance in the United States has perpetuated and enabled a health care industry that has been rewarded for increased spending rather than cost control. With the original plan setting no spending limit on health care providers, fee-for service reimbursement provided greater incentive to spend than to contain costs. Attempts to control the soaring costs of health care services have given rise to managed care insurance plans that base reimbursement on health outcome data. Given that the birth of managed care includes stringent reimbursement guidelines and ensuing controversy over services provided or not provided, this study sought to determine if differences in quality of care existed between two common types of health insurance, fee for-service (FFS) and health maintenance organization (HMO) insurance plans for the most costly chronic illness, congestive heart failure (CHF). Utilizing primary and secondary data obtained from an ongoing CHF study at the University of Tennessee Medical Center in Knoxville, Tennessee, this study compared CHF health outcomes between FFS and HMO insurance plans.

With an N of 154 cases, results revealed 0.37 of a day shorter length of stay in HMO members with an average of 4.95 and 5.32 days for HMO & FFS members respectively. In addition, HMO members displayed higher readmission rates with 25.6% of HMO members and 22.6% of FFS members readmitted to the hospital within 30 days of discharge with a related diagnosis. For the previously stated outcomes, no statistically significant difference was found between the insurance plans. Other findings included all six cases of mortality found in FFS insurance plans, however an exposed odds ratio test did not indicate a statistically significant difference in mortality rates due to sample size and distribution. All six cases of mortality were found in patients ages 67 and up with an association between being age 67+ and enrolled in a FFS insurance plan.

Recommendations for future research include further study into length of stay and the possible effect on readmission rates for members of HMO insurance plans. Investigation into documentation of teaching, follow-up scheduled at discharge, and the effect on readmission rates could provide data supporting the need for adequate teaching and follow up to decrease exacerbations and subsequent higher readmission rates.