Health status of Medicare enrollees in HMOs and fee-for-service in 1994

Health Care Financ Rev. 1996 Summer;17(4):65-76.


We compared the health status of 863 health maintenance organization (HMO) enrollees with that of 4,576 non-enrollees, controlling for demographics and area of residence, using 1994 data from the Medicare Current Beneficiary Survey (MCBS). HMO respondents were less likely to report fair or poor health, functional impairment, or heart disease. Average predicted costs based on various health-status measures were substantially lower for HMO respondents than for respondents in fee-for-service (FFS) arrangements. The Medicare payment formula for HMOs does not adequately adjust for the better health and consequent lower expected costs of HMO enrollees. The addition of health-status measures would improvement payment accuracy and reduce average HMO payments significantly below current levels.

Publication types

  • Comparative Study

MeSH terms

  • Activities of Daily Living
  • Aged
  • Capitation Fee
  • Fee-for-Service Plans / statistics & numerical data*
  • Female
  • Health Care Surveys
  • Health Maintenance Organizations / statistics & numerical data*
  • Health Status Indicators*
  • Humans
  • Longitudinal Studies
  • Male
  • Medicare / statistics & numerical data*
  • Rate Setting and Review
  • United States