ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Thursday, February 1, 1996 TAG: 9602010030
SECTION: BUSINESS PAGE: B-6 EDITION: METRO
DATELINE: NEW YORK
SOURCE: Associated Press
Health maintenance organizations and other managed health care programs are cutting hospital costs without hurting the quality of care, according to a study released Wednesday.
Compared with national averages, hospitals in cities with high use of managed-care plans had 11.2 percent lower costs, 6.3 percent shorter stays and 5.3 percent lower death rates, said the study by KPMG Peat Marwick, a management consultant.
Although the rate of illness complications at hospitals in high managed-care cities was 0.9 percent higher than the national average, KPMG said that finding was not statistically significant.
The study also said high-managed care hospitals generally performed better than those in cities with medium or low use of managed care.
Health care economists said the results were heartening, especially considering the growing public perception that many managed health care companies withhold necessary services to boost their profits.
But they said the study has statistical flaws that might prevent it from portraying a fully accurate picture.
``One must be cautious in generalizing that intensive managed care has no negative impacts on quality, but the results of the study are encouraging,'' said Jonathan Weiner, a professor of health policy and management at the Johns Hopkins School of Public Health in Baltimore.
The study covered 1,400 hospitals in the nation's top 50 cities during 1994. It was the second year KPMG did the study and the results are roughly comparable to those seen in 1993.
``Clearly, managed care is driving down costs without negatively impacting patient care,'' said Michael Hamilton, a director of KPMG's health care consulting division in Costa Mesa, Calif.
The study also looked at cost and length of stays - but not quality - in 2,300 hospitals in smaller cities. It found that these facilities are often less efficient, resulting in generally higher costs even if patient stays are shorter.
HMOs and other managed care programs cut costs by stressing preventative medicine and curbing what they feel is unnecessary treatment. They demand discounts from doctors, hospitals and drug and medical equipment companies in exchange for a steady supply of patients.
The KPMG study didn't divide hospital patients covered by managed care from those covered by traditional health insurance. Hamilton said that data isn't available in enough cities to make such comparisons valid.
However, Hamilton said hospitals in which many patients are covered by managed care have taken steps to become more efficient overall.
``Some hospitals have said, `We have required nurses to do things that clearly they're overqualified to do, and there are others that can provide that same care for less cost,''' he said.
Others perform medical tests faster to prevent patients from unnecessarily laying in a hospital bed for extra days waiting for a result. Hospitals are also hiring outside professionals to do nonmedical tasks more cheaply, such as food service.
While some of these efficiency moves have created a backlash among doctors, nurses and patients, the study discredits the notion that managed care is substandard care, said Hamilton.
Outside economists said the study fails to account for other factors that could skew the results.
For instance, comparing mortality and complication rates is difficult because different hospitals attract people of widely differing ages and levels of illness.
Although the KPMG researchers adjusted for these differences differences, such adjustments are extremely hard to do, the economists said.
LENGTH: Medium: 74 lines ILLUSTRATION: GRAPHIC: Chart by AP.by CNB