Mortality rates higher from lack of medicine, not managed care

WUSTL professor finds no link between between managed care and mortality

Most people are familiar with the urban legends of managed care. The general story line runs like this: sick person requests treatment, managed care company refuses treatment, sick person dies. The stories convey a sense that managed care offers the worst kind of health coverage you can get. However, the business methods employed by managed care frequently result in reduced cost for the companies as well as the individuals enrolled in the programs. Because of this, the trend has been to encourage Medicare enrollees to use managed care programs. Given public trepidation of managed care, many wonder if pushing it on Medicare patients will have an adverse affect on the quality of health care available to seniors. A recent study co-authored by a professor in the business school at Washington University in St. Louis suggests that it’s not managed care that increases mortality rates; it’s lack of drug coverage.

Gautam Gowrisankaran, assistant professor of economics at the Olin School of Business at Washington University, and Robert Town, assistant professor at the University of Minnesota’s School of Public Health, examined the mortality rates of people over 65 enrolled in various Medicare programs to determine what factor seemed to affect mortality rates the most. Their data divided the enrollees into three groups: people in traditional Medicare, people in Medicare Managed Care without drug coverage and people in Medicare Managed Care with drug coverage — also called Medicare Choice Plus.

“We found that there’s little impact on mortality rates of managed care plans with drug coverage relative to traditional Medicare, which is essentially fee for service,” Gowrisankaran said. “The two groups have nearly equal mortality rates. But the group of managed care recipients without drug coverage had significantly higher mortality rates.”

The study suggests that a one percent increase in the number of people enrolled in Medicare Managed Care without drug coverage would result in an additional 5,100 deaths among the elderly population of the United States in one year.

“Part of the goal of the Medicare Drug Act of 2003 was to get more people to have drug coverage,” Gowrisankaran said. “The question is what kind of impact does drug coverage have? Is it worth the cost to government to include drug coverage in Medicare programs?”

Gowrisankaran acknowledges that it’s difficult to tease out the impact of managed care and drug coverage on mortality since elderly people who opt into managed care plans may have fundamentally different illnesses and risk factors than those who decide not to enroll. The researchers were able to discern these impacts by exploiting the idiosyncrasies of the way the government reimbursed health plans in a way that mimics a randomized trial.

In order to confirm their results, the researchers turned to other studies that examined specific common diseases. For example, when looking at death rates from high cholesterol, the researchers were able to confirm the connection between mortality rates and access to medication.

“If you don’t have drug coverage, how much less likely are you to take your cholesterol drugs,” Gowrisankaran said. “If you don’t take your cholesterol drugs, then how does that affect your prevalence of high cholesterol? And if you have high cholesterol, how does that affect your relative mortality to not having high cholesterol?”

Based on their calculations, the researchers estimate that without drug coverage the death rate for seniors from high cholesterol results in an additional 1,200 deaths a year for every one percent decrease in access to drug coverage. Gowrisankaran and Town did similar calculations for hypertension and diabetes and found comparable results.

Gowrisankaran says the study’s implications for policy decisions are obvious: having drug coverage for Medicare enrollees is important—even if it means an additional cost to the government at the outset.

“The other thing our study is saying is that people may complain about managed care, but it’s not that bad,” Gowrisankaran said. “Not in terms of mortality, anyway. There might be other things that are unpleasant about managed care, but in terms of mortality, there’s really no impact.”