Financial consequences of joining a Medicare HMO: an application of the illness episode approach to estimating out-of-pocket costs

To reduce Medicare costs, Medicare beneficiaries are being encouraged to enroll in "risk contract" HMOs. This paper explores the financial consequences to the elderly of joining a Medicare risk HMO. Using a new method for estimating consumer financial vulnerability called the illness episode approach, we modeled the out-of-pocket costs associated with thirteen illnesses of varying severity for beneficiaries with traditional Medicare coverage only and for beneficiaries who join one of two Los Angeles HMOs which charge no additional premium. The typical total charges for a year's treatment of these thirteen illnesses in Los Angeles in 1986 ranged from a low of $856 for moderate hypertension to a high of $28,411 for care of a severe stroke. For beneficiaries with traditional Medicare whose providers did not accept assignment, out-of-pocket costs ranged from $539 to $14,676 and from a low of 7.7 percent to a high of 84.1 percent of total charges. Out-of-pocket costs are considerably reduced in the two Medicare HMOs in this high-cost market; beneficiaries had modeled out-of-pocket costs ranging from $11 to $7,478 and from less than 0.1 percent of total charges to 60 percent of charges. Reductions in financial vulnerability ranged from over 20 percent to 99.3 percent. The relation of these reductions to altered benefit structures and the policy implications of the results are discussed.     

Evaluating partnerships for community health improvement: tracking the footprints

Private-public partnerships are increasingly seen as an important mechanism for improving community health. Despite their popularity, traditional evaluations of these efforts have produced negative or mixed results. This is often attributed to weak interventions or an insufficient period of time to observe an impact. This study examines two additional possibilities--the need for a well-articulated shared vision and the governance and management capabilities of the partnership itself. We conducted a midstream process evaluation of twenty-five community partnerships associated with the Community Care Network (CCN) Demonstration Program. We examined how the roles of a common shared vision, strong governance, and effective management influence a partnership's ability to achieve its objectives. The findings, based on both qualitative and quantitative analyses, underscore the importance of membership organizations' perceived benefits and costs of participation and management capabilities to the partnership's progress toward a vision. Based on the qualitative data, six key governance and management characteristics are identified that separate the top performing partnerships from the lowest performing ones. We explore the implications of this research for future evaluations of public-private community health partnerships.