Department of Health and Human Services 
OFFICE OF 
INSPECTOR GENERAL 
BENEFICIARY PERSPECTIVES OF 
MEDICARE RISK HMOs 1996 
Beneficiaries With Functional Limitations, 
Comorbidities and Disabilities 
JUNE GIBBS BROWN 
Inspector General 
AUGUST 1998 
OEI-06-95-00434  OFFICE OF INSPECTOR GENERAL 
The mission of the Office of Inspector General (OIG), as mandated by Public Law 95-452, is to 
protect the integrity of the Department of Health and Human Services programs as well as the 
health and welfare of beneficiaries served by them.  This statutory mission is carried out through a 
nationwide program of audits, investigations, inspections, sanctions, and fraud alerts.  The 
Inspector General informs the Secretary of program and management problems and recommends 
legislative, regulatory, and operational approaches to correct them. 
Office of Evaluation and Inspections 
The Office of Evaluation and Inspections (OEI) is one of several components of the Office of 
Inspector General.  It conducts short-term management and program evaluations (called 
inspections) that focus on issues of concern to the Department, the Congress, and the public.  The 
inspection reports provide findings and recommendations on the efficiency, vulnerability, and 
effectiveness of departmental programs. 
OEI's Dallas Regional Office prepared this report under the direction of Chester B. Slaughter, 
Regional Inspector General.  Principal OEI staff included: 
REGION  HEADQUARTERS 
Kristine Kenslow  Tricia Davis 
Judith V. Tyler  Brian Ritchie 
Nancy Watts  Barbara Tedesco 
To obtain a copy of this report, call the Dallas Regional Office at 1 (800) 848-8960. 
Reports are also available on the World Wide Web at (http://www.dhhs.gov/progorg/oei). 
http://www.dhhs.gov/progorg/oei  E X E C U T I V E  S U M M A R Y

PURPOSE 
To describe and compare the experiences of functionally limited, comorbid and disabled Medicare 
HMO beneficiaries with those of healthier beneficiaries. 
BACKGROUND 
Medicare beneficiaries may join a risk health maintenance organization (HMO) or remain in the 
fee-for-service program.  In return for a predetermined monthly capitation payment, the HMO 
must provide all medically necessary, Medicare-covered services, except hospice care.  As of 
October 1997, the Health Care Financing Administration (HCFA) reported 307 risk HMO plans 
serving 5 million Medicare enrollees. 
We conducted a mail survey of 4 thousand  enrollees and disenrollees from 40 Medicare HMOs. 
The OIG report entitled, "Beneficiary Perspectives of Medicare Risk HMOs 1996" presented an 
overview of findings from this survey data.  One significant finding in this overview report was 
that functionally limited, chronically ill and disabled beneficiaries experienced more service access 
problems than healthier beneficiaries. 
This report provides an in-depth analysis of the survey responses of functionally limited, disabled 
and chronically ill beneficiaries having comorbidities.  Recent research has shown less healthy 
beneficiaries are less likely to join HMOs and more likely to leave them.  Some research has also 
found that such vulnerable beneficiaries have less favorable medical outcomes in HMOs than in 
fee-for-service delivery systems. 
We highlight and distinguish the responses of disenrollees in these groups since their 
unsatisfactory experiences may have motivated them to disenroll.  Thus, their responses may 
sharpen our understanding of shortfalls in HMO services. 
FINDINGS 
Although our overall report found that Medicare beneficiaries in HMOs generally had good 
access to health care services, beneficiaries who are impaired or less healthy experienced 
substantially more problems.  We found significant differences between these vulnerable 
beneficiaries and their healthier counterparts regarding their experiences with enrollment, access 
to services, care from their primary doctors and difficulty of obtaining HMO care. 
Functionally limited, comorbid and disabled beneficiaries experienced more problems in 
accessing services, particularly specialized services, than healthier beneficiaries. 
<	 Functionally limited enrollees (8%) and disenrollees (20%), comorbid enrollees (9%) and 
disabled disenrollees (27%) said that their physician failed to give them needed Medicare-
covered services.  These proportions were significantly higher than their corresponding 
reference groups. 
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i  <	 Comorbid enrollees (8%) and disenrollees (21%), and disabled disenrollees (36%) said their 
physician failed to refer them to needed specialists. 
<	 More comorbid disenrollees (36%) reported delays in obtaining non-routine services (i.e. 
physical therapy, diagnostic tests) in the six months prior to the survey. 
Vulnerable beneficiaries said obtaining care through their HMO was hard or very hard. 
Over 37 percent of disabled disenrollees and 24 percent of disabled enrollees said obtaining care 
through their HMO was hard or very hard.  This was substantially higher than the proportion of 
elderly beneficiaries who reported this.  Functionally limited and comorbid beneficiaries expressed 
similar difficulties in obtaining care. 
While able to obtain timely appointments when they were very ill, vulnerable beneficiaries were 
more critical of the care received from their primary physicians. 
<	 Functionally limited enrollees (16%) and disenrollees (24%), as well as disabled disenrollees 
(39%) more often reported that their primary physicians did not take their health complaints 
seriously. 
<	 Disabled (61%) and functionally limited (68%) disenrollees were significantly less likely than 
aged (78%) and less impaired (79%) disenrollees to believe their physician explained all 
treatment options to them. 
<	 Fewer functionally limited enrollees (34%) and disenrollees (29%), and disabled enrollees 
(38%) rated the care received from their primary physicians as excellent than their 
corresponding reference groups. 
While sizeable proportions of vulnerable enrollees said their health improved, about one fifth of 
vulnerable disenrollees said care provided by the HMO caused their health to worsen. 
Among vulnerable disenrollees, 23 percent of comorbid, 20 percent of functionally limited, and 18 
percent of the disabled beneficiaries reported HMO care caused their health to worsen.  However, 
on the positive side, 34 percent of disabled, 44 percent of functionally limited, and 52 percent of 
comorbid enrollees said their health improved under HMO care. 
Disabled beneficiaries and functionally limited and comorbid disenrollees were more likely than 
less impaired groups to have been inappropriately asked about their health problems when 
applying to their HMO. 
Disabled disenrollees (25%)  more often reported being asked questions regarding their health at 
application than aged disenrollees (17%).  Likewise, more functionally limited disenrollees, and 
comorbid disenrollees (22%) reported being asked about their health status at the time of 
application than beneficiaries without functional limitations or multiple illnesses. 
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ii  RECOMMENDATIONS 
We recommend that HCFA address the problems identified by vulnerable beneficiaries in 
Medicare risk HMOs and suggest consideration of the following options. 
<	 In developing the health status capitation risk adjusters required by the Balanced Budget Act 
of 1997, HCFA should take into account the following considerations: 
C	 Risk adjusters should be sufficiently specific to address the severity of illnesses or 
functional impairments contributing to the health service needs of beneficiaries. 
C	 Multi-plan studies should be conducted concurrently with implementation of the risk 
adjustment methodology to measure adequacy of adjusters and plan and beneficiary 
behavioral responses. 
C	 During the early implementation stage, the capitation methodology could include 
adjustments based upon actual cost experience. 
<	 Service access problems encountered by vulnerable populations in HMOs should continue to 
be monitored. 
<	 Contractual requirements could be used by HCFA to encourage or require plans to designate 
specialists as primary physicians in appropriate cases or to provide standing referrals for 
ongoing specialty care needs. 
<	 HCFA could also use contractual requirements to assure that referral and utilization criteria 
are available on request to providers and to beneficiaries for use in accessing care and 
appealing any denials of service. 
AGENCY COMMENTS 
We received comments from HCFA and the Assistant Secretary for Planning and Evaluation 
(ASPE).  HCFA fully concurred with four of the six recommendations in the report and partially 
concurred with the remaining two recommendations regarding risk adjustment, by citing 
difficulties with implementation of parts of the recommendations.  HCFA also offered several 
technical comments about sample size and questioned the connection between the report's 
analyses and our recommendations for risk adjustment.  ASPE concurred with our 
recommendations, but suggested further study of the disabled population, and also noted some 
concerns on the sample size and composition.  Based on HCFA and ASPE comments, we clarified 
information about our sample and cited literature demonstrating the connection between access to 
care issues and risk adjustment. 
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iii  T A B L E  O F  C O N T E N T S

PAGE

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  i

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Enrollment Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Perceived Health Status  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Access to Health Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Primary HMO Physician Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Assessing HMO Overall Care . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

RECOMMENDATIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14

AGENCY COMMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  17

ENDNOTES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19

BIBLIOGRAPHY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  21

APPENDICES

Methodology  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1

Demographic Data for Survey Respondents  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

Supplementary Tables for Beneficiary Survey Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1

Statistical Tables for Key Questions  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .D-1

Agency Comments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
 I N T R O D U C T I O N

PURPOSE 
To describe and compare the experiences of functionally limited, comorbid and disabled Medicare 
HMO beneficiaries with those of healthier beneficiaries. 
BACKGROUND 
The Medicare risk HMO program 
Medicare beneficiaries may join a risk health maintenance organization (HMO) through the 
Medicare program.  When enrolling beneficiaries, HMOs may not deny or discourage enrollment 
based on a beneficiary's health status except for end-stage renal disease (ESRD) or hospice care. 
They must also adequately inform beneficiaries about lock-in to the HMO and appeal/grievance 
procedures.  Once enrolled, beneficiaries are usually required to use HMO physicians and 
hospitals (lock-in) and to obtain prior approval from their primary care physicians for other than 
primary care.1  The Health Care Financing Administration (HCFA) has oversight responsibility for 
Medicare risk contracts with HMOs.  Effective July 1997, HCFA's internal reorganization placed 
many managed care functions under the new Center on Health Plan and Provider Operations. 
Previously, the HCFA Office of Managed Care was the responsible agency.  As of October 1997, 
HCFA reported 307 risk-based HMO plans served 5,049,296 Medicare enrollees.2,3 
Functionally limited, chronically ill and disabled beneficiaries 
Several recent studies have focused attention on the experiences and outcomes of the less healthy 
Medicare beneficiaries who join HMOs.  Since the Medicare HMO program is growing 
substantially  and the population of beneficiaries over age 85 is growing it is anticipated that the 
health care needs of HMO members will intensify.  Because they use the health care system more 
often and cost more to care for, the less healthy members have a more experienced view of their 
health care system than healthy members and are often more vulnerable to cost saving strategies 
employed in managed health care.4,5 A recent medical outcomes study found that patients with 
chronic illnesses had worse outcomes in HMOs than in fee-for-service coverage, but such 
outcome differences were not found for a healthier population.6  Another study of enrollment
disenrollment patterns and utilization of hospital services found that beneficiaries who disenroll 
from HMOs have higher inpatient admission rates than those who stayed in the fee-for-service 
system7 suggesting that sicker beneficiaries are selectively disenrolling from HMOs.  Given these 
findings, an examination of sicker beneficiaries experiences with HMOs is warranted, and is the 
focus of this report. 
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1  Prior Office of Inspector General studies 
The Office of Inspector General (OIG) has conducted several studies of Medicare managed care. 
In 1995 the OIG released two final reports based on 1993 survey data from 2,882 Medicare HMO 
enrollees and recent disenrollees randomly sampled from 45 Medicare risk HMOs.8  While the 
majority of enrollees and disenrollees reported access to medical care that maintained or improved 
their health, the results also indicated some serious problems with enrollment procedures and 
service access.  Further, the reports suggested how HCFA could use information from 
beneficiaries to guide its performance monitoring and assessments of HMOs. 
In 1996 OEI initiated a follow-up study,"Beneficiary Perspectives of Medicare Risk HMOs 1996" 
(OIG-OEI-06-95-00430), largely replicating the methodology of the 1993 survey for comparison 
purposes.  One of the more substantial findings of the overview report was that experiences and 
perspectives of HMO enrollees and disenrollees who were functionally limited, chronically ill or 
disabled differed significantly from those of healthier beneficiaries.  This report provides a more 
indepth look at these sub-populations. 
METHODOLOGY* 
Definition of access 
Beyond referencing medical necessity and an actual or likely adverse effect on the beneficiary, the 
law and regulations do not clearly delineate what full access to services through an HMO means. 
To adequately cover access to services, we adapted a definition from literature that uses five 
dimensions: availability, accessibility, accommodation, affordability, and acceptability. 
Operationally, we divided access into five areas:  appointments, including waiting time and 
administrative processes for making them; restrictions on medical services; incidence and reasons 
for out-of-plan care; behavior of primary HMO doctors and other HMO personnel towards 
beneficiaries; and beneficiary awareness of appeal and grievance rights. 
Sample selection 
From HCFA's Group Health Plan (GHP) data base, we selected a two-stage random sample, 
stratified at the second stage.  At the first stage, we selected Medicare risk HMOs from those 
under contract with HCFA as of May 1996.  We first excluded those that did not meet our 
parameters for length of time in the Medicare program or for number of enrollees and 
disenrollees.  From the remaining HMOs, we randomly selected 40.  At the second stage, we 
selected current enrollees and recent disenrollees from each sampled HMO.  After excluding 
enrollees and disenrollees who had not been members for at least 3 months, we randomly selected 
51 enrollees and 51 disenrollees from each of the 40 HMOs.  Finally, using HCFA's Enrollment 
Data Base, we dropped beneficiaries who had died or who appeared as current enrollees, but had 
actually disenrolled since the last update to the GHP file.  This process resulted in 2,038 enrollees 
and 2,027 disenrollees for a total of 4,065 beneficiaries. 
*  See Appendix A for the full text of the Methodology. 
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2  Scope and data collection 
Since this study's primary focus is the Medicare beneficiaries' perceptions of their risk HMO 
experiences, we only collected information from them.  We surveyed both enrollees and 
disenrollees to compare their responses, and thus, to gain greater insight into HMO issues.  We 
did not contact HMOs or their staffs, nor did we attempt to assess the quality or propriety of 
medical care rendered by the HMOs to these beneficiaries.  We initially mailed structured survey 
forms to 4,065 beneficiaries in early August 1996.  In mid-September 1996, we mailed a follow-
up letter and second survey form to non-respondents; we closed data collection in October 1996. 
With the exception of four questions on overall ratings of their HMO experiences, we did not 
specifically ask beneficiaries about their satisfaction with the HMOs.  Instead we asked for more 
concrete details on beneficiaries' perceptions and experiences, such as, how long were waits for 
appointments, or how often, if ever, did a primary physician fail to take their health complaints 
seriously.  Both enrollees and disenrollees provided information on sample and demographic data, 
enrollment experience, past and present health status and functional level, cost of HMO 
membership, HMO environment, and available HMO services. 
A total of 3,229 survey forms were returned.  Of these, 3,003 were usable yielding an unweighted 
return rate of 74 percent overall, 82 percent for enrollees (N=1665) and 66 percent for 
disenrollees (N=1338). 
Weighting and interpretation 
We weighted the collected data to reflect a non-response bias, differences in enrollment size 
among the sampled HMOs, and distribution of enrollees and disenrollees in the universe (97% vs. 
3%) for the sample period.  The results are generalizable only to the 132 HMOs that met our 
sampling parameters. 
Because of the imbalance between enrollees and disenrollees, we primarily analyzed the two 
groups separately.  Comparisons between sub-populations of enrollees and disenrollees form the 
basis for all tables in this report.  All tables show the weighted percentages with the weighted 
number of respondents in parentheses.  Additionally, we computed 95 percent confidence 
intervals and statistical significance tests for key questions (see Appendix D ). 
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3  Defining Medicare vulnerable sub-populations 
We conducted a literature review of recent studies of Medicare beneficiaries which addressed less 
healthy sub-populations.  Several working definitions were identified in the literature. We used 
definitions of vulnerable subgroups that were fairly consistent with those used in existing studies. 
In our overview report, we used a broad category of chronically ill beneficiaries since other 
studies had used this categorization.  However, our more indepth analysis of vulnerable 
feneficiaries for this report, as well as prior research efforts, led us to focus on beneficiaries 
having multiple health problems as a more discriminating category for the chronically ill. 9 
Therefore, we chose to use comorbidity as our definition of serious illness.  For a more complete 
discussion of the categorization scheme used across other studies, see Appendix A. 
We analyzed three categories of vulnerable beneficiaries:  the disabled, functionally limited and 
comorbid individuals having multiple serious conditions.  Disabled beneficiaries were shown on 
the GHP as meeting the Medicare criteria for disability and were younger than 65.  We classified 
enrollees and disenrollees as functionally limited or comorbid based on their self reports of health 
conditions and activities of daily living.  Functionally limited beneficiaries reported at least one 
limitation in the following activities of daily living:  problems getting in or out of bed, bathing or 
showering, using the toilet, or climbing one flight of stairs.  Comorbid beneficiaries reported two 
or more health conditions from a list including heart attack or heart condition, kidney failure, 
stroke, cancer (excluding skin cancer), diabetes, and other serious conditions (See Appendix A). 
The sub-populations of disabled and functionally limited beneficiaries are not the same, although 
some overlap exists.  Disabled enrollees and disenrollees comprise 12 percent and 24 percent, 
respectively, of the functionally limited respondents. 
The unweighted sample sizes for these vulnerable sub-groups resulting from these definitions are 
as follows: Disabled Enrollees - 91, Disabled Disenrollees - 98, Functionally Limited Enrollees -
258, Functionally Limited Disenrollees - 216, Comorbid Enrollees - 244, Comorbid Disenrollees -
207. 
This inspection was conducted in accordance with the Quality Standards for Inspections issued 
by the President's Council on Integrity and Efficiency. 
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4  F I N D I N G S

SUMMARY OF BENEFICIARIES' ASSESSMENTS 
Overall, Medicare beneficiaries in risk HMOs gave favorable reports of their experiences and 
access to care in 1996.  Problem areas identified by the overall group were beneficiaries' lack of 
awareness of their formal appeal and grievance rights, disenrollees receiving denials for 
emergency or urgent care, and awareness of the need for, and rules applying to gynecological 
care.  However, we found that functionally limited and disabled beneficiaries experienced 
significantly more problems in accessing specialists, and other Medicare-covered services, and in 
receiving full explanations of their treatment options and having their health complaints taken 
seriously. 
In our further analysis of the experiences of vulnerable sub-populations in Medicare risk HMOs, 
we found additional evidence of problems they encountered and differences in their perceptions of 
HMO care as compared to the overall HMO beneficiary population.  These included problems 
with access to care, particularly referrals and specialized services, the perception that their 
primary doctor did not take their complaints seriously and difficulty they experienced in obtaining 
care.  For this report, we expanded the set of questions examined to include the enrollment 
process, their rating of care received by their primary doctor, and the impact of the care they 
received on their health status. 
ENROLLMENT PROCESS 
We found that vulnerable beneficiaries' most frequently mentioned reasons for joining HMOs, as 
for healthier beneficiaries, were to obtain more affordable health care, services not covered by 
Medicare fee-for-service, and better quality care (See Table C-1). 
We noted few differences among specific sub-groups concerning why they joined an HMO.  We 
found that disabled enrollees (70%) and disenrollees (58%) were much more likely than aged 
enrollees(36%) and disenrollees (37%) to have joined their HMO in order obtain services not 
covered by the fee-for-service plan.  Additionally, comorbid disenrollees (40%) joined for this 
reason more often than their reference group (28%).  Disabled disenrollees joined seeking more 
affordable health care (48%) less often than aged disenrollees (72%), which was also true for 
comorbid disenrollees (60% compared to 72%).  See Table C-1.  Most beneficiaries knew at 
enrollment that their primary HMO doctor must give them referrals for specialist services. 
Disabled Beneficiaries And Functionally Limited And Comorbid Disenrollees Were More 
Likely Than Less Impaired Groups To Have Been Inappropriately Asked About Their 
Health Problems At Application. 
Due to concerns stated by other researchers over whether less healthy beneficiaries are being 
selectively excluded from HMO membership, we analyzed the experience of these vulnerable 
groups regarding being asked about their health problems at application.  We found that disabled 
enrollees (22%) and disenrollees (25%) and disenrollees reporting comorbidities (22%) and 
functional limitations (23%) did more often report being asked about their health status at the 
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5  time of HMO application.  See Table C-2. 
PERCEIVED HEALTH STATUS 
Researchers have found self assessment of health status is strongly related to perceived health care 
needs and utilization of services.10  Since health status has multiple dimensions, including the 
nature of the diagnosis, the severity of the condition, and functional limitations caused by the 
condition, the individual is able to take all of these dimensions into account in self-assessing their 
health status. Because perceived health status is an important predictor of perceived health care 
needs and service utilization, we examined the self-reported health status of each vulnerable 
beneficiary group. 
Table 1: Beneficiaries' Perceived Health at Time of Survey by Sub-Population 
Enrollees  Disenrollees 
Medicare Aged/Disabled  Aged  Disabled  Aged  Disabled 
Health at time of survey was: 
<  good to excellent  71%  34%  66%  21% 
(1,319,887)  (27,377)  (27,750)  (594) 
<  fair  25%  42%  25%  48% 
(460,975)  (34,091)  (10,403)  (1,378) 
<  poor to very poor  5%  24%  9%  32% 
(84,221)  (19,763)  (3,845)  (915) 
Functional Limits  No Limits  1+ Limits  No Limits  1+ Limits 
Health at time of survey was: 
<  good to excellent  77%  31%  74%  16% 
(1,197,149)  (104,547)  (25,054)  (1,355) 
<  fair  21%  48%  21%  50% 
(321,764)  (161,033)  (7,194)  (4,356) 
<  poor to very poor  2%  21%  5%  34% 
(32,450)  (70,717)  (1,645)  (2,972) 
Comorbidity  <2 Illnesses  2+ Illnesses  <2 Illnesses  2+ Illnesses 
Health at time of survey was: 
<  good to excellent  76%  40%  71%  19% 
(1,157,508)  (136,330)  (25,468)  (1,300) 
<  fair  22%  43%  23%  45% 
(332,433)  (146,675)  (8,099)  (3,105) 
<  poor to very poor  3%  17%  6%  36% 
(41,655)  (59,588)  (2,073)  (2,516) 
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6  As Expected, Vulnerable Beneficiaries Assessed Their Health Status As Much Poorer Than 
Other Beneficiaries. 
We found significant differences in the proportion of all vulnerable beneficiaries reporting poor to 
very poor health status compared to their reference groups (See Table 1).  Disabled and 
functionally limited beneficiaries reported the highest proportions of poor health status.  Disabled 
enrollees (24%) and disenrollees (32%) perceived their health status as poor or very poor more 
often than aged enrollees and disenrollees (9%).  Comorbid enrollees (17%) and disenrollees 
(36%) more often reported poor to very poor health compared to 3 percent and 6 percent 
respectively, of their reference groups. 
ACCESS TO HEALTH SERVICES 
Several health economists and health services researchers have expressed concern regarding the 
perverse payment incentives which exist in the current Medicare HMO capitation methodology 
which is not adjusted for health status.  They note that plans which develop a reputation for 
quality care to the sickest patients will attract a disproportionate share of such enrollees without 
any additional compensation for their more expensive care.  This can lead to plan failure or 
incentives to limit access and treatment for specific subgroups.11,12,13  Due to these concerns, we 
focused much of our analysis of vulnerable beneficaries in Medicare risk HMOs on their access to 
health services. 
While Able To Obtain Timely Primary Physician Appointments When They Were Very Ill, 
Vulnerable Beneficiaries Experienced More Service Access Problems Than Healthier 
Beneficiaries. 
We first examined these beneficiaries' access to timely (1-2 days) primary physician appointments 
when they were very sick.  We found no differences between the vulnerable beneficiaries and 
others in receiving timely doctor appointments.  Most enrollees (92% to 97%) were able to obtain 
appointments within 1 to 2 days when very sick.  Similarly, most disenrollees (84% to 87%) 
obtained timely appointments when very sick.  See Tables 2.1 to 2.3. 
Functionally limited beneficiaries, comorbid enrollees and disabled disenrollees said their 
physician failed to give them Medicare-covered services more often than healthier 
beneficiaries. 
Of disabled disenrollees, 27 percent stated that their physicians failed to give them Medicare-
covered services, whereas only 11 percent of aged disenrollees made this assertion.  Among 
functionally limited beneficiaries, 8 percent of enrollees and 20 percent of disenrollees reported 
this failure to obtain services compared to  2 percent of enrollees and 11 percent of disenrollees in 
the less impaired group.  Comorbid enrollees were also more likely than their healthier 
counterparts to report their physician failed to give them Medicare-covered services (9% 
compared to 2%). 
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7  Comorbid beneficiaries and disabled disenrollees experienced more problems in obtaining 
referrals to specialists than healthier beneficiaries. 
Thirty-six percent of disabled disenrollees experienced failure of their physicians' to refer them to 
a specialist when the beneficiaries felt this was needed, which is significantly higher than the 13 
percent of aged disenrollees making this claim (See Table 2.1). 
Table 2.1: Service Access by Medicare Aged/Disabled Sub-Population 
Enrollees  Disenrollees 
Service Access  Aged  Disabled  Aged  Disabled 
Received appointment with physician w/in  96%  95%  85%  87% 
1-2 days when very sick.  (982,645)  (63,365)  (23,952)  (2,330) 
Physician failed to give needed Medicare- 3%  4%  11%  27% 
covered services.  (62,609)  (3,233)  (5,265)  (970) 
Experienced delays in receiving non- 12%  23%  23%  34% 
routine services in past 6 months.  (159,867)  (15,463)  (8,222)  (1,101) 
Physician failed to admit beneficiary to  1%  4%  4%  19% 
hospital when needed.  (12,747)  (2,061)  (829)  (377) 
Physician failed to refer beneficiary to a 
4%  16%  13%  36% 
specialist when needed. 
(64,581)  (12,935)  (4,586)  (918) 
Had sought out-of-plan care. 
5%  15%  10%  14% 
(100,662)  (12,505)  (4,612)  (531) 
Table 2.3 indicates that beneficiaries with comorbidity experienced this problem with specialty 
referrals as well.  Eight percent of enrollees and 21 percent of disenrollees reported a problem 
with specialist referrals, contrasted with healthier enrollees (4%) and disenrollees (13%). 
)))))))))))
8  Table 2.2: Service Access by Functionally Limited Sub-Population 
Enrollees  Disenrollees 
Service Access  No Limits  1+ Limits  No Limits  1+ Limits 
Received appointment with physician w/in  97%  92%  84%  87% 
1-2 days when very sick.  (768,985)  (233,233)  (17,717)  (7,320) 
Physician failed to give needed Medicare- 2%  8%  11%  20% 
covered services.  (35,857)  (26,111)  (4,136)  (2,047) 
Experienced delays in receiving non- 11%  16%  22%  30% 
routine services in past 6 months.  (123,089)  (41,497)  (6,495)  (2,589) 
Physician failed to admit beneficiary to  1%  3%  4%  8% 
hospital when needed.  (8,241)  (6,110)  (660)  (522) 
Physician failed to refer beneficiary to a 
5%  6%  12%  25% 
specialist when needed. 
(58,280)  (11,235)  (3,313)  (2,072) 
Had sought out-of-plan care. 
4%  13%  10%  13% 
(63,105)  (46,648)  (3,751)  (1,327) 
Comorbid disenrollees encountered more delays in obtaining non-routine services (e.g. 
physical therapy, diagnostic tests) than healthier disenrollees. 
We asked beneficiaries about any delays in receiving HMO approvals for non-routine services, 
such as physical therapy or diagnostic tests in the 6 months prior to the survey.  Of disenrollees 
with comorbidities, 36 percent had experienced such delays, although only 21 percent of healthier 
disenrollees reported this (See Table 2.3). 
Table 2.3: Service Access by Comorbid Sub-Population 
Enrollees  Disenrollees 
Service Access  <2 Illnesses  2+ Illnesses  <2 Illnesses  2+ Illnesses 
Received appointment with physician w/in  97%  94%  85%  87% 
1-2 days when very sick.  (742,513)  (265,966)  (18,893)  (6,482) 
Physician failed to give needed Medicare- 2%  9%  12%  12% 
covered services.  (35,127)  (29,629)  (4,954)  (1,086) 
Experienced delays in receiving non- 13%  12%  21%  36% 
routine services in past 6 months.  (134,787)  (33,394)  (6,450)  (2,465) 
Physician failed to admit beneficiary to  1%  4%  4%  13% 
hospital when needed.  (5,665)  (8,346)  (455)  (712) 
Physician failed to refer beneficiary to a 
4%  8%  13%  21% 
specialist when needed. 
(51,794)  (25,434)  (3,769)  (1,510) 
Had sought out-of-plan care. 
6%  7%  9%  14% 
(84,684)  (23,663)  (3,628)  (1,170) 
Beneficiaries with comorbidities and disabled disenrollees more often reported their primary 
)))))))))))
9  physician failed to admit them to the hospital when they felt this was needed. 
As shown in Table 2.,3 comorbid diserollees (13%) and enrollees (4%) stated that their physician 
failed to admit them to the hospital when they felt this was needed more often than healthier 
beneficiaries.  This problem was also experienced by disabled disenrollees (19%), whereas 
significantly smaller proportions of their reference groups noted this problem (See Table 2.1). 
PRIMARY HMO PHYSICIAN CARE 
We also analyzed a set of questions asking about beneficiaries' perceptions of the care received 
from their primary physicians.  Given the "gatekeeper" role of the primary physician in an HMO, 
their relationship with beneficiaries is important to  how HMO members perceive the quality of 
care they receive. 
The perceptions of comorbid beneficiaries were very similar to those of healthier beneficiaries. 
See Table 3. 
Functionally Limited Beneficiaries And Disabled Disenrollees Were More Critical Of The 
Care Received From Their Primary Physicians. 
Disabled and functionally limited disenrollees and enrollees more often said their primary 
care physician did not take their health complaints seriously. 
As seen in Table 3, a substantial proportion of disabled disenrollees (39%) reported their primary 
physician did not take their complaints seriously, as contrasted with only 17 percent of aged 
disenrollees.  Our overview report discussed examples of provider behavior which generated these 
concerns, such as not listening to the beneficiary, impatience, and not letting beneficiaries fully 
explain their concerns.14  Among disenrollees, 39 percent of disabled and 24 percent of the 
functionally limited felt their primary care physician did not take their complaints seriously.  To a 
lesser extent, disabled and functionally limited enrollees also shared this view. 
Disabled and functionally limited disenrollees were also less likely to believe their physician 
explained all their treatment options than less impaired disenrollees. 
Explaining treatment options is another important aspect of the physician patient relationship. 
Only 61 percent of disabled disenrollees believed their primary physician explained all their 
treatment options, whereas 78 percent of aged disenrollees felt this was true. Likewise, only 68 
percent of the functionally limited disenrollees were comfortable that all treatment options were 
explained by their physician compared to 79 percent of the less impaired disenrollees.  We found 
no significant differences in comparing enrollees from these sub-populations with their reference 
groups, nor between comorbid beneficiaries and their healthier counterparts. 
)))))))))))
10  Table 3: Primary Physician Care by Medicare Aged/Disabled and Functionally Limited Sub-
Populations 
Enrollees  Disenrollees 
Primary Physician Care  Aged  Disabled  Aged  Disabled 
Primary physician did not take health  7%  13%  17%  39% 
complaints seriously.  (127,608)  (11,106)  (7,943)  (1,441) 
Primary physician explained treatment  89%  92%  78%  61% 
options  (1,399,300)  (73,799)  (31,090)  (2,176) 
Cost most important to primary physician.  9%  5%  20%  24% 
(138,033)  (4,030)  (7,135)  (516) 
Believed care given by PCP was: 
<  excellent 
48%  38%  36%  33% 
<  good  (919,845  (34,275)  (17,545)  (1,221) 
43%  45%  37%  24% 
<  fair 
(821,073)  (40,620)  (17,733)  (882) 
7%  14%  17%  29% 
(131,841)  (12,959)  (8,085)  (1,072) 
Primary Physician Care  No Limits  1+ Limits  No Limits  1+ Limits 
Primary physician did not take health  5%  16%  17%  24% 
complaints seriously.  (72,319)  (58,381)  (6,444)  (2,418) 
Primary physician explained treatment  91%  85%  79%  68% 
options  (1,143,058)  (280,598)  (25,390)  (6,742) 
Cost most important to primary physician.  8%  9%  18%  27% 
(114,317)  (25,475)  (5,631)  (1,795) 
Believed care given by PCP was: 
<  excellent 
51%  34%  38%  29% 
<  good  (804,503)  (117,306)  (14,759)  (3,201) 
41%  50%  37%  29% 
<  fair 
(654,904)  (172,946)  (14,368)  (3,191) 
6%  12%  15%  30% 
(101,383)  (41,298)  (5,664)  (3,264) 
We also analyzed the proportion of vulnerable beneficiaries who believed that cost was the most 
important consideration of their primary physician and generally found no difference between the 
vulnerable beneficiaries and healthier groups, except that 27 percent of functionally limited 
disenrollees believed this to be true versus 18 percent of less impaired disenrollees. 
)))))))))))
11  Fewer functionally limited beneficiaries and disabled enrollees rated the care they received 
from their primary physician as excellent than their reference groups. 
We asked beneficiaries to give a summary rating of the care received from their primary 
physicians.  Fewer disabled (38%) than aged (48%) enrollees rated this care as excellent. 
Likewise, fewer functionally limited enrollees (34%) and disenrollees (29%) rated the care 
provided by their primary physician as excellent than less impaired enrollees (51%) and 
disenrollees (38%).  We found no differences between comorbid enrollees and healthier enrollees. 
However, comorbid (41%) disenrollees rated their care as excellent more often than those not so 
impaired.  See Table 3. 
ASSESSING HMO OVERALL CARE 
While Sizeable Proportions Of Vulnerable Enrollees Said Their Health Improved, About 
One Fifth Of  Vulnerable Disenrollees Said Care Provided By The HMO Caused Their 
Health To Worsen. 
Among vulnerable disenrollees, 23 percent of the comorbid, 20% of the functionally limited, and 
18 percent of the disabled reported HMO care caused their health to worsen.  However, on the 
positive side, 34 percent of disabled, 44 percent of functionally limited, and 52 percent of 
comorbid enrollees said their health improved under HMO care. 
More Vulnerable Beneficiaries Said Obtaining Care Through Their HMO Was Hard Or 
Very Hard. 
Table 4 presents beneficiary assessments of the ease with which they obtained care through their 
HMO.  Significantly more disabled enrollees (24%) and disenrollees (37%) and functionally 
limited enrollees (11%) and disenrollees (31%) said that obtaining care was hard or very hard 
compared to aged and less impaired beneficiaries.  This greater difficulty in obtaining care was 
also a concern of comorbid disenrollees. 
)))))))))))
12  Table 4: Beneficiaries' Perceptions of HMO Care 
by Medicare Status, Functionally Limited and Comorbid Sub-Populations 
Enrollees  Disenrollees 
Medicare Aged/Disabled  Aged  Disabled  Aged  Disabled 
Ease of obtaining care was: 
<  easy or very easy  68%  45%  52%  45% 
<  neither easy nor hard  27%  31%  29%  18% 
<  hard or very hard  5%  24%  18%  37% 
HMO care caused health to: 
<  improve  44%  34%  30%  17% 
<  stay the same  54%  62%  59%  66% 
<  worsen  3%  4%  11%  18% 
Functional Limits  No Limits  1+ Limits  No Limits  1+ Limits 
Ease of obtaining care was: 
<  easy or very easy  70%  55%  55%  40% 
<  neither easy not hard  26%  35%  28%  29% 
<  hard or very hard  5%  11%  16%  31% 
HMO care caused health to: 
<  improve  43%  44%  34%  17% 
<  stay the same  56%  48%  58%  63% 
<  worsen  1%  9%  9%  20% 
Comorbid  <2 Illnesses  2+ Illnesses  <2 Illnesses  2+ Illnesses 
Ease of obtaining care was: 
<  easy or very easy  67%  66%  53%  47% 
<  neither easy nor hard  28%  27%  28%  28% 
<  hard or very hard  5%  7%  18%  25% 
HMO care caused health to: 
<  improve  41%  52%  28%  37% 
<  stay the same  58%  41%  63%  40% 
<  worsen  1%  7%  9%  23% 
)))))))))))
13
 R E C O M M E N D A T I O N S

As the agency responsible for the growing Medicare risk HMO program, HCFA must exercise

leadership in monitoring the performance of HMOs and in assuring full access

to services for all Medicare HMO beneficiaries.  Using 1996 data, we identified areas of the

Medicare risk HMO program that were working well for vulnerable beneficiaries or that

apparently needed improvement.  Based on this work we also suggest techniques HCFA could

use to strengthen the consumer protections in its contractual requirements with HMOs to address

several problems identified by these vulnerable sub-populations.  We further suggest factors for

HCFA to consider in developing the capitation rate risk adjusters required by the Balanced

Budget Act of 1997.

We recommend that HCFA take appropriate actions to address the problems of vulnerable

beneficiaries.  We suggest HCFA consider the following options.

In developing and refining the health status capitation rate risk adjusters required by the 
Balanced Budget Act of 1997, HCFA should consider the following: 
CC	 Risk adjusters should be sufficiently specific to address the severity of illness or 
functional impairments which contribute to the health service needs of beneficiaries. 
CC	 Large scale, multi-plan studies should be conducted concurrently with implementation 
of the risk adjustment methodology to test the adequacy of adjusters and measure plan 
and beneficiary behavioral responses. 
CC	 During the early implementation stage, the capitation methodology could include 
adjustments based upon actual cost experience. 
Health economists have, over the past several years, raised concerns about the financial incentives 
inherent in a capitation payment methodology which does not adequately adjust for the health 
risks of a diverse Medicare population.  Specifically, they predict that managed care plans have 
incentives not to enroll sicker or disabled beneficiaries and that access problems will emerge for 
sicker patients in these plans.15  Our analysis of beneficiary survey responses adds to a growing 
number of studies which have shown evidence of enrollment and health access problems of these 
vulnerable groups.16  These health economists have described risk adjustment methodologies as 
the appropriate payment approach for addressing such problematic incentives. 
The findings of this report and a review of recent research suggest that multiple dimensions of 
health status need to be incorporated in a health status capitation rate methodology.  Broad 
categories of health status or diagnoses are not likely to capture the range of variation in costs and 
health care needs of sicker and disabled populations.  The Balanced Budget Act of 1997 requires 
HCFA to submit a report by March, 1999 on a method of risk adjustment for captation rates paid 
to Medicare HMOs, and to implement a risk adjustment methodology by January 1, 2000. 
However, the Act does not specify the methodology to be used.  Health economists, over the past 
several years, have developed and conducted analyses of methodologies to serve this purpose. 17 18 
These studies have noted the importance of functional limitations and comorbidity in developing 
)))))))))))
14  appropriate risk adjusters. 
However, both plan and beneficiary behavioral responses to the new incentives created by a risk 
adjustment methodology could vary from theoretical predictions.  Thus, it is important for HCFA 
to conduct studies of the actual behavior of these actors concurrent with implementation of the 
risk adjustment methodology.  A blend of prospective risk adjusters, coupled with actual cost 
experience, as proposed by Newhouse et. al.,19 might help to correct for initial variance from the 
expected effects of the new incentive structure of capitation risk adjustment as the methodology is 
being refined. 
Service access problems encountered by functionally limited, comorbid and disabled 
beneficiaries should be identified and carefully monitored to assure optimal access to 
needed health care services by these vulnerable groups. 
Both the 1993 and 1996 HMO beneficiary surveys identified service access problems for these 
vulnerable populations.  HMOs and HCFA will be conducting disenrollee surveys and the 
Consumer Assessment of Health Plans Survey (CAHPS) to assess beneficiary experience and 
satisfaction with their HMOs.  We believe these surveys  should identify the health conditions and 
functional limitations of beneficiaries, and analyze the responses of these vulnerable populations, 
due to our findings on the problems they have experienced.  These analyses could provide an 
important beneficiary protection as the altered incentives of a risk adjusted capitated methodology 
come into play. 
HMOs may be encouraged, or required by contract, to improve access to needed specialty 
care, by designating medical specialists as primary care providers for individuals with 
severe, disabling or degenerative conditions.  Alternatively, HMOs could be encouraged or 
required to provide standing referrals to specialists for beneficiaries determined by the 
HMO to have conditions that require on-going specialty care. 
Problems with access and acceptability of care in HMOs for privately insured persons are 
currently being addressed by several state governments through legislation and regulation of the 
managed care industry.  New York and New Jersey have proposed regulations requiring HMOs 
to designate medical specialists as primary care providers for these vulnerable beneficiaries.  New 
York has also proposed regulations which would allow enrollees to receive a standing referral to a 
specialist for conditions requiring on-going specialty care.20 
At the Federal level, a "Patients Bill of Rights" is being considered.  For Medicare beneficiaries 
HMO contractual requirements afford a mechanism for protecting vulnerable plan members.  The 
problems in obtaining specialist referrals reported by vulnerable beneficiaries indicate such 
protection is warranted. 
)))))))))))
15  To address problems experienced by vulnerable beneficiaries in obtaining needed 
Medicare-covered services and specialty care, HCFA could, through contractual 
requirements, require that referral and utilization criteria be available on request to 
providers and to beneficiaries for use in accessing care and appealing any denials of service. 
In our overview report we found that beneficiaries are experiencing problems in understanding 
their appeal rights.  In this report we found that vulnerable beneficiaries are experiencing more 
problems than healthier beneficiaries in accessing needed health services, particularly specialty 
services.  We suggest that HCFA strengthen its requirements of HMOs to assure beneficiaries 
have appropriate information regarding the basis upon which decisions regarding their access to 
care are made. 
Denial of service letters, written in clear language, must be provided by HMOs to plan enrollees 
when services are denied.  These letters provide an appropriate mechanism to provide the 
enrollees and their providers with the criteria which were used to deny services.  The HCFA 
HMO/CMP Manual requires specificity in reasons for denials to be stated in denial determination 
letters.  However, criteria used by the plan in their determinations are not explicitly required.21 
This could also aid these enrollees and their providers in pursuing expedited appeals, which are 
required in urgent situations. New York has proposed regulations requiring such disclosures.22 
Monitoring state experiences with such regulations could assist HCFA in deciding whether to 
include such requirements in its Medicare HMO contracts. 
)))))))))))
16  A G E N C Y  C O M M E N T S

We received comments on the report from the Health Care Financing Administration (HCFA) and 
the Assistant Secretary for Planning and Evaluation (ASPE).  The full text of their comments is in 
Appendix E. 
Health Care Financing Administration 
Of the report's six recommendations, HCFA fully concurred with four:  1) identifying and 
monitoring service access problems encountered by vulnerable beneficiaries; 2) improving these 
beneficiaries' access to needed specialty care; 3) improving the processes for informing providers 
and beneficiaries' of referral and utilization criteria; and 4) testing the adequacy of risk adjusters, 
and measuring plan and beneficiary behavioral responses. 
We also suggested that HCFA consider using health status adjusters to address severity of illness 
and functional impairments, as well as a blend of prospective adjusters and retrospective 
adjustments based upon actual cost in developing capitation rates.  HCFA seriously considered 
these options and partially concurred by accepting their intent while raising substantive concerns 
about their feasibility. 
HCFA also noted that it is developing data and methods for risk adjustment based on severity of 
illness.  By the year 2000, it will most likely implement a risk adjustment system that uses 
inpatient diagnoses to assign relative predicted risk scores to managed care enrollees.  HCFA 
anticipates moving to a more comprehensive risk adjustment model in later years.  HCFA does 
not foresee, however, implementing risk adjustment based on functional limitations as it would 
require an additional expense of another data collection, is difficult to do accurately, and is of 
questionable value to them. 
We also suggested that HCFA consider a partial capitation approach that blends prospective and 
retrospective adjustments.  HCFA agrees that such an approach "may help mitigate against the 
possible incentives under full capitation to restrict the use of services."  However, HCFA believes 
that this approach is not generally consistent with the prospective payment rate required by the 
Balanced Budget Act of 1997, would be difficult to operationalize based on their experience with 
demonstration projects, and again, would require data they do not have. 
HCFA also offered several technical comments on the report's title, the sufficiency of information 
about the sample sizes of the vulnerable subgroups, the connection between the report's analyses 
and our recommendations for risk adjustment, and the ability of some of these beneficiaries to be 
referred to appropriate specialty centers or clinics at least for diagnosis or case management.  We 
modified the report title, added clarifications that specify the unweighted sample sizes, the 
smallest of which was 91 beneficiaries, and cited the literature that demonstrates the connection 
between access to care issues and risk adjustment.  Acquiring sufficiently specific health data to 
identify beneficiaries with rare conditions or to analyze their referrals to specialty centers or clinics 
was beyond the intended scope of our study. 
Assistant Secretary for Planning and Evaluation 
)))))))))))
17  ASPE concurred with the recommendations and offered comments on sample composition and 
size, the statistical significance of our findings, and the need for further study of the disabled 
population.  ASPE noted incorrectly that our sample included only elderly Medicare beneficiaries 
and not disabled Medicare beneficiaries.  In fact, as the methodology mentions, we did sample 
beneficiaries who met the Medicare criteria for disability and were younger than age 65.  Of the 
3,003 respondents to our survey, 189 were Medicare disabled beneficiaries.  Appendix D shows 
the tests of statistical significance between the disabled and aged Medicare respondents, as well as 
those for the other vulnerable group comparisons.  We acknowledge ASPE's interest in further 
study of the disabled population. 
)))))))))))
18  E N D N O T E S

1.	 This excludes the effect of the point-of-service option which was relatively new for the 
Medicare program at the time we completed the data collection phase of our study. 
2.	 "Medicare Managed Care Plans," October 1997, a monthly report prepared by Office of 
Managed Care, HCFA. 
3.	 In recent years, HCFA has begun to broaden the range of service delivery options within 
the Medicare managed care program.  In October 1995, HCFA issued guidelines to 
HMOs on offering a point-of-service (POS) option to Medicare enrollees.  The POS 
benefit increases flexibility for Medicare HMO enrollees by allowing them to seek care 
outside the HMO's provider network, typically with higher cost-sharing, i.e. the HMO will 
provide partial reimbursement for out-of-network services.  In January 1997, HCFA 
launched the Medicare Choices demonstration project designed to provide beneficiaries a 
wider variety of managed care plans and to extend managed care options to rural areas. 
The demonstration plans include four provider sponsored networks, a preferred provider 
organization and a "triple option" hybrid that lets members see gatekeeper physicians, 
other plan providers without a gatekeeper referral, or providers outside the plan. 
4.	 Paul Fishman et al., "Chronic Care Costs in Managed Care," Health Affairs, May/June 
1997, pp. 239-247. 
5.	 John E. Ware Jr., et al., "Differences in 4-Year Health Outcomes for Elderly and Poor, 
Chronically Ill Patients Treated in HMO and Fee-For-Service Systems," Journal of the 
American Medical Association, 1996:276:13:1039-1047. 
6.  Ware et al., October 1996. 
7.	 Robert O. Morgan et al., "The Medicare-HMO Revolving Door - The Healthy Go In and 
The Sick Go Out", The New England Journal of Medicine (July 17, 1997), 
172-175. 
8.	 "Beneficiary Perspectives of Medicare Risk HMOs" (OEI-06-91-00730), 
"Medicare Risk HMO Performance Indicators" (OEI-06-91-00734) 
9.  Physician Payment Review Commission 1997 Annual Report to Congress, p. 108. 
10.	 Hornbrook and Goodman present a study of the linkage of health status, functional 
limitations and health service utilization in the context of developing appropriate capitation 
risk adjusters.  They reported that functional limitations, self-reported diseases and 
perceived health status to be strongly associated with service utilization and perceived 
health care needs.  Consequently, they stress the importance of capturing multiple 
dimensions of health status, perception of health status, functional limitations as well as 
specific conditions in developing appropriate predictors of health service utilization. 
)))))))))))
19  (Mark C. Hornbrook and Michael J. Goodman, "Chronic Disease, Functional Health 
Status and Demographics:  A Multi-Dimensional Approach to Risk Adjustment," Health 
Services Research, 31:3, August 1996, pp. 283-305. 
11.	 Robert H. Miller and Harold S. Luft, "Does Managed Care Lead to Better or Worse 
Quality of Care," Health Affairs, September/October 1997, pp. 7-25. 
12.  Hornbrook and Goodman, 1996. 
13.  Morgan et. al., 1997. 
14.  "Beneficiary Perspectives of Medicare Risk HMOs 1996," OEI-06-95-00430, p.18. 
15.	 Joseph Newhouse et. al. succinctly presents the logical connection between lack of 
risk adjustment and plan attempts to enroll healthier patients and increased access 
problems for the chronically ill.  His basic argument is that, without risk 
adjustment, plans that enroll sicker patients and provide them good access to 
services weaken their financial position to compete with other plans in a market 
area.  "Risk Adjustment and Medicare:  Taking a Closer Look," Health Affairs, 
September/October 1997, pp. 26-43. 
For additional descriptions of this logic see Physician Payment Review 
Commission 1997 Annual Report to Congress, Chapter 5 and Mark C. Hornbrook 
and Michael J. Goodman, "Chronic Disease, Functional Health Status and 
Demographics:  A Multi-Dimensional Approach to Risk Adjustment," Health 
Services Research, 31:3, August 1996, pp. 284-285. 
16.	 John E. Ware, et al., "Differences in 4-Year Health Outcomes for Elderly and 
Poor, Chronically Ill Patient Treated in HMO and Fee-For-Service Systems", 
Journal of the American Medical Association, 1996:276:13:1039-1047. 
Robert O. Morgan et al., "The Medicare-HMO Revolving Door - The Healthy Go 
In and The Sick Go Out", The New England Journal of Medicine (July 17, 1997), 
172-175. 
Marsha Gold et al., "Disabled Medicare Beneficiaries In HMOs," Health Affairs, 
September/October 1997, 155-158. 
17.	 Joseph Newhouse et. al. have analyzed the risk adjustment methodologies which have 
been developed and conclude that the work on diagnostic cost groups and that on 
hierarchial coexisting conditions offer the most promise. (Newhouse et. al., 1997, pp. 26-
43). 
Hornbrook and Goodman have also addressed the multi-dimensional nature of health 
status adjustment and suggest that functional limitations compound specific diagnostic 
categories in determining the amount and type of health service needs and, consequently, 
need to be accounted for in risk adjustment methodologies. (Hornbrook and Goodman, 
)))))))))))
20  1996). 
18.  Physician Payment Review Commission 1997 Annual Report to Congress. 
19.  Newhouse et. al., September/October 1997. 
20.	 "HMO Consumers at Risk:  States to the Rescue," Washington:  Families USA, July 1996 
(http://epn.org/families/farisk.html). 
21.  HCFA HMO/CMP Manual, Revision 6, section 2403.4. 
22.  "HMO Consumers at Risk:  States to the Rescue," 1996. 
)))))))))))
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)))))))))))
22  Edgman-Levitan, Susan and Paul D. Cleary, "What Information Do Consumers Want And Need?" 
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)))))))))))
23  Demographics:  A Multi-Dimensional Approach to Risk Adjustment," Health Services Research, 
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)))))))))))
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)))))))))))
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)))))))))))
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)))))))))))
27  A P P E N D I X  A

METHODOLOGY 
Definition of access 
Beyond referencing medical necessity and an actual or likely adverse effect on the beneficiary, the 
law and regulations do not clearly delineate what full access to services through an HMO means. 
In order to construct a survey instrument that adequately covered access to services, we adapted 
a definition from literature.1,2  Basically, it uses five dimensions (availability, accessibility, 
accommodation, affordability, and acceptability) that represent the degree of "fit" between the 
patient and the health care system, e.g. existing services and the patient's medical needs, or price 
of services and the patient's ability to pay.  To tailor the survey for Medicare risk HMOs, we 
expanded the idea of service availability to include the role of gatekeepers, primary physicians or 
others associated with the HMO, in preventing or facilitating beneficiaries' receipt of covered 
services.  Operationally, we divided access into five areas:  appointments, including waiting time 
and administrative processes for making them; restrictions on medical services; incidence and 
reasons for out-of-plan care; behavior of primary HMO doctors and other HMO personnel 
towards beneficiaries; and beneficiary awareness of appeal and grievance rights. 
Sample selection 
From HCFA's Group Health Plan (GHP) data base, we selected a two-stage random sample, 
stratified at the second stage. 
At the first stage, we selected Medicare risk HMOs3 from those under contract with HCFA as of 
May 1996.  From a total of 208 risk HMOs, we excluded 76 because they:  1) had not been 
enrolling Medicare beneficiaries for at least 6 months as of May 1996, 2) did not have at least 100 
enrollees who had been members for 3 months or longer as of June 1996, or 3) did not have at 
least 60 disenrollees from March 1996 through June 1996 who had been members for 3 months or 
longer.  We set these restrictions to avoid collecting data on HMOs and beneficiaries with little 
Medicare HMO experience and to assure an adequate sampling universe per HMO.  From the 
remaining 132 HMOs, we randomly selected 40. 
At the second stage, we selected Medicare beneficiaries from each sampled HMO.  The universe 
of beneficiaries for each sampled HMO contained two strata -- Medicare beneficiaries (enrollees) 
who were enrolled as of June 1996 and Medicare beneficiaries (disenrollees) who had disenrolled 
from March 1996 through June 1996 for reasons other than death.  From each sampled HMO, 
after excluding enrollees and disenrollees who had not been members for at least 3 months, we 
randomly selected 51 enrollees and 51 disenrollees.  While we could have selected a proportional 
sample of beneficiaries, we chose not to because of a planned but separate analysis of the same 
data at the HMO level.  Instead, for this report, we weighted the beneficiary data as described 
below.  Finally, using HCFA's Enrollment Data Base, we dropped beneficiaries who had died or 
who appeared as current enrollees, but had actually disenrolled since the last update to the GHP 
file.  This process resulted in 2,038 enrollees and 2,027 disenrollees for a total of 4,065 
beneficiaries. 
)))))))))))
A - 1  Scope and data collection 
Since this study's primary focus is the Medicare beneficiaries' perceptions of their risk HMO 
experiences, we only collected information from them.  We surveyed both enrollees and 
disenrollees to compare their responses, and thus, to gain greater insight into HMO issues.  We 
did not contact HMOs or their staffs, nor did we attempt to assess the quality or propriety of 
medical care rendered by the HMOs to these beneficiaries.  We initially mailed structured survey 
forms to 4,065 beneficiaries in early August 1996.  In mid-September 1996, we mailed a follow-
up letter and second survey form to non-respondents; we closed data collection in October 1996. 
With the exception of four questions on overall ratings of their HMO experiences, we did not 
directly and specifically ask beneficiaries about their satisfaction with the HMOs.  Instead we 
asked for more concrete details on beneficiaries' perceptions and experiences, such as, how long 
were waits for appointments, or how often, if ever, did a primary physician fail to take health 
complaints seriously.  Both enrollees and disenrollees provided information on sample and 
demographic data, enrollment experience, past health status and functional level, cost of HMO 
membership, HMO environment, and available HMO services.  Additionally, enrollees were asked 
about current health status and future plans for HMO membership while disenrollees were asked 
about health status at disenrollment and reasons for disenrollment. 
A total of 3,229 survey forms were returned.  Of these, 3,003 were usable4 yielding an 
unweighted return rate of 74 percent overall, 82 percent for enrollees (N=1665) and 66 percent 
for disenrollees (N=1338). 
Weighting and interpretation 
We weighted the collected data to reflect a non-response bias, differences in enrollment size 
among the sampled HMOs, and distribution of enrollees and disenrollees in the universe.  To 
determine non-response bias, we tested unweighted data for differences of means and proportions 
to discern significant differences between respondents and non-respondents by four demographic 
characteristics -- age, race, sex and number of months enrolled in the sampled HMO.  Since 
significant differences did exist, we conservatively weighted the sample to approximate the 
response rate per stratum per sampled HMO.5  The weighted data also approximates the relative 
Medicare enrollment sizes of the sampled HMOs and the disproportionate distribution of enrollees 
and disenrollees in the universe (97% vs. 3%) for the sampling period.6  The results are 
generalizable to the 132 HMOs described in the sampling section, but not to those that didn't meet 
our sampling parameters.  However, the beneficiary universe from which we sampled our 
enrollees and disenrollees was 96 percent and 99 percent, respectively, of enrollees and 
disenrollees who were members of all 208 HMOs for 3 months or longer.7  Further, our universe 
of enrollees and disenrollees was 87 percent and 85 percent of all Medicare risk enrollees and 
disenrollees. 
Because of the imbalance between enrollees and disenrollees, we primarily analyzed the two 
groups separately.8  Comparisons between sub-populations form the basis for all tables in this 
report, particularly when these groups differed markedly in reporting their HMO experiences.  All 
tables show the weighted percentages with the weighted number of respondents in parentheses.9 
)))))))))))
A - 2  Additionally, we computed 95 percent confidence intervals and statistical significance for key 
questions (see Appendix D).  A few of the confidence intervals are quite broad, particularly for 
disenrollees, due to the small number of responses for some questions.  Standard errors for the 
weighted percentages and number of beneficiaries were corrected using the SUDAAN software. 
Defining disabled, functionally limited, and comorbid sub-populations 
A literature review was conducted of several recent studies of Medicare beneficiaries which 
addressed less healthy sub-populations.  Three categories of sub-populations were selected based 
on definitions used in these studies and information available from our survey; functionally limited, 
chronically ill and disabled.  The definition of the disabled population was consistent across all of 
the studies examined 10,11 which was Medicare beneficiaries who met the Medicare disability 
criteria and were younger than age 65. 
Functionally limited (or impaired) sub-populations were examined in two studies.12,13

However, the definitions given were quite general referencing only "Activities of Daily Living"

limitations and "functional impairment.  We decided to examine a similar group because of the

expectation that this category would include beneficiaries who have more severe health conditions

or were quite frail.  We defined the functionally limited as including respondents who identified

one or more of the following limitations to their activities of daily living: problems with getting in

and out of bed, problems with bathing or showering, using the toilet, or climbing one flight of

stairs.

The most variance we found in the literature defining these sub-populations was in categorizing 
the "chronically ill" or "chronic conditions."  A medical outcomes study of chronically ill HMOs 
and fee-for-service systems used the following list of chronic illnesses: hypertension, heart attacks, 
congestive heart failure and clinical depression.14  A recently issued GAO Report on chronically ill 
Medicare beneficiaries in HMOs defined this sub-population as those with diabetes, ischemic heart 
disease, congestive heart failure or chronic obstructive pulmonary disease.15 A literature survey of 
multiple studies regarding quality of care and HMOs referenced research which also included 
arthritis, cancer and stroke in their definitions of "chronically ill."16 
Recent research has also identified comorbidity as a complication of health status which has 
significant implications for health services utilization and the complexity of health care for such 
individuals.17  Our indepth analysis showed this to be a more focused way to identify beneficiaries 
with significant health conditions.  We defined comorbid beneficiaries as respondents who 
reported two or more health conditions from the following list of survey options: survey form; 
heart attack or heart condition, cancer (not skin cancer), kidney failure, stroke, broken bones, 
internal bleeding, pneumonia, diabetes, lung problems. 
The unweighted sample sizes for these vulnerable sub-groups resulting from these definitions are 
as follows:  Disabled Enrollees - 91, Disabled Disenrollees - 98, Functionally Limited Enrollees -
258, Functionally Limited Disenrollees - 216, Comorbid Enrollees - 244, Comorbid Disenrollees -
207. 
)))))))))))
A - 3  APPENDIX A - ENDNOTES

1.	 Penchansky, Roy, DBA, and J. William Thomas, PhD, "The Concept of Access: Definition 
and Relationship to Consumer Satisfaction," Medical Care, February 1981, 12:2:127-140. 
Thomas, J. William, PhD, and Roy Penchansky, DBA, "Relating Satisfaction With Access 
to Utilization of Services," Medical Care, June 1984, 22:6:553-568. 
2.  The Penchansky and Thomas five dimensions of access to services are: 
a.	 Availability - the relationship of the volume and type of existing services (and 
resources) to the client's volume and types of need.  It refers to the adequacy of 
supply of medical providers, facilities and specialized programs and services, such 
as mental health and emergency care. 
b.	 Accessibility - the relationship between the location of supply and the location of 
clients, taking account of client transportation resources and travel time, distance 
and cost. 
c.	 Accommodation - the relationship between the manner in which the supply 
resources are organized to accept clients (including appointment systems, hours of 
operation, walk-in facilities, telephone services) and the client's ability to 
accommodate to these factors and the client's perception of their appropriateness. 
d.	 Affordability - The relationship of prices of services and the providers' insurance 
(or deposit requirements) to client's income, ability to pay and existing health 
insurance.  Client perception of worth relative to total cost is a concern, as is client 
knowledge of prices, total cost and possible credit arrangements. 
e.	 Acceptability - the relationship of clients' attitudes about personal and practice 
characteristics of providers to the actual characteristics of existing providers, as 
well as to provider attitudes about acceptable personal characteristics of clients.  In 
turn, providers have attitudes about the preferred attributes of clients or their 
financing mechanisms.  Providers may be unwilling to serve certain types of clients 
or, through accommodation, make themselves more or less available. 
3.	 Actually, the sample is a mix of HMOs and competitive medical plans (CMP).  Since the 
rules governing their particpation in the Medicare risk program are the same, we use 
HMO to refer to both. 
4.	 Of the 3,229 returned survey forms, 226 were not usable: 58 were returned for bad 
addresses, with no known forwarding address; 129 were not usable because the 
beneficiary was deceased or was unwilling/unable to complete the survey form; 39 were 
not usable because the beneficiary's responses indicated (s)he may not be referring to the 
sampled HMO, or few to none of the key questions were answered. 
5.	 The range of response rates for unweighted data per HMO was 59 percent to 92 percent 
for enrollees and 43 percent to 84 percent for disenrollees. 
6.  Formulas used to weight data: 
)))))))))))
A - 4  Enrollees 
Enrollee universe per 
HMO universe (N = 132)  sampled HMO 
X 
HMO sample (N = 40)  Sampled enrollees per HMO 
Disenrollees 
Disenrollee universe per 
HMO universe (N = 132)  sampled HMO
X 
HMO sample (N = 40)  Sampled disenrollees per HMO 
7. 
Comparison of Beneficiary Universe Sizes 
Stratum  $$ 3 months  $$ 3 months  All members 
(132 HMOs)  (208 HMOs)  (208 HMOs) 
Enrollees  3,218,351  3,335,189  3,719,713 
Disenrollees  110,539  112,015  130,436 
8.	 For those tables that do not show the proportion of all beneficiaries answering a question, 
that proportion is usually the same as or one point (+/-) that of the proportions shown for 
enrollees. 
9.	 Respondents did not answer every survey question.  Many respondents were not eligible 
to answer every item because the survey form used screening questions.  Thus, the 
weighted value of the beneficiaries eligible to answer varied by question.  Some 
beneficiaries simply did not answer questions for which they were eligible.  To 
accommodate these two factors, we calculated a response rate for each question based on 
the weighted value of eligible respondents.  Questions with response rates of less than 
50% are not reported.  The majority of questions had response rates of 80% to 99%.  In 
addition, percentages throughout the report are based only on the weighted responses to 
each question, not on the weighted value of all survey respondents. 
10.	 Robert H. Miller and Harold S. Luft, "Does Managed Care Lead to Better or Worse 
Quality of Care," Health Affairs, September/October 1997. 
11.	 Marsha Gold et al., "Disabled Medicare Beneficiaries In HMOs," Health Affairs, 
September/October 1997, pp. 151-152. 
12.  Miller and Luft, 1997. 
13.  Gold et al., 1997. 
)))))))))))
A - 5  14.	 John E. Ware et al., "Differences in 4-Year Outcomes for Elderly and Poor, Chronically Ill 
Patients Treated in HMO and Fee-For-Service Systems," The Journal of the American 
Medical Association, October 2, 1996. 
15.	 U.S. General Accounting Office, "Medicare:  Fewer and Lower Cost Beneficiaries With 
Chronic Conditions Enroll in HMOs," GAO/HEHS-97-160, 18 August 1997, p. 3. 
16.  Miller and Luft, 1997. 
17.  Ware Jr., et. al., (1996) and Newhouse et. al.(1997). 
)))))))))))
A - 6  A P P E N D I X  B

SAMPLE DEMOGRAPHIC DATA - 1996 
BY BENEFICIARY 
Weighted Data 
Demographics  Enrollees  Disenrollees 
SEX 
Female  56% (1,226,765)  55% (34,004) 
Male  44% (968,928)  45% (27,910) 
RACE/ETHNICITY 
White  83% (1,812,704)  82% (50,565) 
Non-White  11% (242,742)  8% (5,243) 
Unknown  6% (140,247)  10% (6,106) 
AVERAGE AGE  73 Years  72 Years 
EDUCATION 
< Than High School  20% (432,333)  19% (11,564) 
High School Diploma  30% (648,906)  24% (15,226) 
> Than High School  44% (978,774)  45% (27,790) 
No Response  6% (135,679)  12% (7,335) 
MEDICARE CATEGORY 
Aged  96% (2,098,465)  93% (57,687) 
Disabled/ESRD**  4%  (97,229)  7% (4,227) 
HMO EXPERIENCE 
Prior Experience  26% (560,948)  21% (12,996) 
No Experience  66% (1,451,278)  71% (39,212) 
No Response  8% (183,466)  8% (4,853) 
AVERAGE LENGTH OF TIME 
IN HMO  34 Months  21 Months 
BY HMO

HMOs  MODEL TYPES  TAX STATUS  STATES 
IPA  Group  Staff  Profit  Nonprofit  Number 
1996 (N=40)  29 (73%)  8 (20%)  3 (8%)  28 (70%)  12 (30%)  19 
** 
No ESRD beneficiaries were selected in the disenrollee sample. 
)))))))))))
B - 1  A P P E N D I X  C

SUPPLEMENTARY TABLES FOR BENEFICIARY SURVEY FINDINGS 
Table C-1: Reasons Beneficiaries Joined HMOs by Sub-Populations 
Enrollees  Disenrollees 
Medicare Aged/Disabled  Aged  Disabled  Aged  Disabled 
Joined HMO for: 
<  more affordable care  68%  67%  72%  48% 
(1,424,521)  (64,155)  (40,512)  (2,016) 
<  better quality care  20%  37%  23%  31% 
(422,557)  (35,115)  (12,908)  (1,304) 
<  services not covered by Medicare  36%  70%  37%  58% 
(749,314)  (67,019)  (20,794)  (2,453) 
Functional Limits  No Limits  1+ Limits  No Limits  1+ Limits 
Joined HMO for: 
<  more affordable care  68%  71%  71%  65% 
(1,164,095)  (104,547)  (32,185)  (7,756) 
<  better quality care  21%  21%  25%  17% 
(354,503)  (161,033)  (11,173)  (2,058) 
<  services not covered by Medicare  37%  43%  37%  40% 
(632,466)  (70,717)  (16,660)  (4,736) 
Comorbidity  <2 Illnesses  2+ Illnesses  <2 Illnesses  2+ Illnesses 
Joined HMO for: 
<  more affordable care  69%  64%  72%  60% 
(1,175,581)  (241,400)  (34,802)  (5,833) 
<  better quality care  19%  25%  23%  26% 
(328,569)  (95,456)  (10,957)  (2,537) 
<  services not covered by Medicare  38%  36%  40%  28% 
(640,867)  (137,167)  (19,396)  (2,729) 
)))))))))))
C - 1
 Table C-2: Beneficiaries' Enrollment Experience by Sub-Populations 
Enrollees  Disenrollees 
Medicare Aged/Disabled  Aged  Disabled  Aged  Disabled 
Were asked at application about health  15%  22%  17%  25% 
problems, excluding kidney failure and  (221,010)  (16,325)  (7,252)  (933) 
hospice care. 
Did know from beginning PCP must  86%  84%  86%  85% 
give referrals to specialists.  (1,707,238)  (77,347)  (46,228)  (3,544) 
Functional Limits  No Limits  1+ Limits  No Limits  1+ Limits 
Were asked at application about health  16%  15%  16%  23% 
problems, excluding kidney failure and  (188,259)  (43,020)  (5,499)  (2,171) 
hospice care. 
Did know from beginning PCP must  87%  83%  88%  80% 
give referrals to specialists.  (1,433,664)  (294,197)  (38,458)  (8,631) 
Comorbidity  <2 Illnesses  2+ Illnesses  <2 Illnesses  2+ Illnesses 
Were asked at application about health  15%  15%  16%  22% 
problems, excluding kidney failure and  (181,149)  (37,218)  (6,239)  (1,573) 
hospice care. 
Did know from beginning PCP must  87%  82%  87%  82% 
give referrals to specialists.  (1,426,326)  (286,096)  (40,466)  (7,289) 
Table C-3: Primary Physician Care by Comorbid Sub-Population 
Enrollees  Disenrollees 
Primary Physician Care  <2 Illnesses  2+ Illnesses  <2 Illnesses  2+ Illnesses 
Primary physician did not take health  6%  14%  19%  17% 
complaints seriously.  (90,197)  (48,293)  (7,544)  (1,492) 
Primary physician explained treatment  91%  86%  78%  72% 
options  (1,127,161)  (289,295)  (26,239)  (5,979) 
Cost most important to primary physician.  8%  6%  19%  21% 
(114,020  (18,076)  (5,847)  (1,375) 
Believed care given by PCP was: 
<  excellent 
48%  45%  35%  41% 
<  good  (751,985)  (160,539)  (14,565)  (3,500) 
44%  38%  38%  25% 
<  fair 
(694,642)  (136,548)  (15,822)  (2,154) 
6%  12%  17%  21% 
(96,683)  (42,423)  (7,023)  (1,763) 
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C - 2
 Table C-4: Beneficiaries' Perceptions of HMO Care 
by Medicare Status and Functionally Limited Sub-Populations 
Enrollees  Disenrollees 
Medicare Aged/Disabled  Aged  Disabled  Aged  Disabled 
Ease of obtaining care was: 
<  easy or very easy  68%  45%  52%  45% 
(1,283,272)  (40,033)  (24,640)  (1,640) 
<  neither easy nor hard  27%  31%  29%  18% 
(517,876)  (26,971)  (13,834)  (659) 
<  hard or very hard  5%  24%  18%  37% 
(85,526)  (21,226)  (8,616)  (1,364) 
HMO care caused health to: 
<  improve  44%  34%  30%  17% 
(813,276)  (29,458)  (13,691)  (537) 
<  stay the same  54%  62%  59%  66% 
(1,007,339)  (53,440)  (26,360)  (2,140) 
<  worsen  3%  4%  11%  18% 
(46,894)  (3,449)  (4,888)  (563) 
Functional Limits  No Limits  1+ Limits  No Limits  1+ Limits 
Ease of obtaining care was: 
<  easy or very easy  70%  55%  55%  40% 
(1,092,719)  (184,029)  (21,128)  (4,388) 
<  neither easy not hard  26%  35%  28%  29% 
(408,357)  (116,287)  (10,837)  (3,198) 
<  hard or very hard  5%  11%  16%  31% 
(70,889)  (35,229)  (6,225)  (3,468) 
HMO care caused health to: 
<  improve  43%  44%  34%  17% 
(661,669)  (148,583)  (12,162)  (1,738) 
<  stay the same  56%  48%  58%  63% 
(867,462)  (162,160)  (20,778)  (6,295) 
<  worsen  1%  9%  9%  20% 
(20,861)  (29,482)  (3,228)  (1,947) 
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C - 3
 Table C-5: Beneficiaries' Perceptions of HMO Care by Comorbid Sub-Population 
Enrollees  Disenrollees 
HMO Care  <2 Illnesses  2+ Illnesses  <2 Illnesses  2+ Illnesses 
Ease of obtaining care was: 
<  easy or very easy  67%  66%  53%  47% 
(1,034,404)  (229,315)  (21,490)  (4,003) 
<  neither easy nor hard  28%  27%  28%  28% 
(429,819)  (94,391)  (11,418)  (2,359) 
<  hard or very hard  5%  7%  18%  25% 
(76,607)  (24,416)  (7,431)  (2,176) 
HMO care caused health to: 
<  improve  41%  52%  28%  37% 
(622,048)  (187,868)  (10,754)  (2,982) 
<  stay the same  58%  41%  63%  40% 
(871,125)  (147,742)  (24,060)  (3,186) 
<  worsen  1%  7%  9%  23% 
(21,894)  (26,665)  (3,257)  (1,880) 
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C - 4
 A P P E N D I X  D

STATISTICAL DATA FOR KEY QUESTIONS

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D - 1
 Table D-1: Point Estimates, Confidence Intervals, and Statistical Significance by Functional Status 
KEY:  TT = statistical significance tested  ** = difference is significant at .05 level 
1+ Functional Limits  No Functional Limits 
Point Estimate  Standard Error  95% Confidence  Point Estimate  Standard Error  95% Confidence 
Proportion of beneficiaries:  Interval  Interval 
Health at time of survey was poor to very poor. 
TT  < enrollees 
TT  < disenrollees  21.03  3.00  15.2 - 26.9  **  2.09  0.64  0.8 - 3.3 
34.23  3.59  27.2 - 41.3  4.85  1.06  2.8 - 7.0 
** 
HMO care caused health to improve. 
< enrollees  43.67  4.59  34.7 - 52.7  42.69  1.94  38.9 - 46.5 
TT  < disenrollees  17.41  4.06  9.5 - 25.4  **  33.63  2.99  27.8 - 39.5 
HMO care caused health to worsen. 
TT  < enrollees  8.67  2.32  4.1 - 13.2  **  1.35  0.40  0.6 - 2.1 
TT  < disenrollees  19.51  4.25  11.2 - 27.8  **  8.92  1.50  6.0 - 11.9 
Primary physician explained treatment options. 
TT  < enrollees 
TT  < disenrollees  84.99  2.64  79.8 - 90.2  **  91.23  0.90  89.5 - 93.0 
68.47  5.21  58.3 - 78.7  79.10  2.87  73.5 - 84.7 
** 
Physician failed to give needed Medicare-
covered services. 
TT  < enrollees  7.88  2.93  2.1 - 13.6  **  2.30  0.46  1.4 - 3.2 
TT  < disenrollees  19.84  4.13  11.7 - 28.0  **  10.65  1.70  7.3 - 14.0 
Physician failed to admit beneficiary to hospital 
when needed. 
TT  < enrollees  2.89  1.55  0.0 - 6.0  1.19  0.44  0.3 - 2.1 
TT  < disenrollees  8.18  3.08  2.1 - 14.2  3.99  1.69  0.8 - 7.3 
D - 2
 Table D-1: Point Estimates, Confidence Intervals, and Statistical Significance by Functional Status 
KEY:  TT = statistical significance tested  ** = difference is significant at .05 level 
1+ Functional Limits  No Functional Limits 
Point Estimate  Standard Error  95% Confidence  Point Estimate  Standard Error  95% Confidence 
Proportion of beneficiaries:  Interval  Interval 
Physician failed to refer beneficiary to a 
specialist when needed. 
< enrollees  6.38  2.28  1.9 - 10.8  4.91  0.95  3.0 - 6.8 
TT  < disenrollees  25.16  5.31  14.8 - 35.6  **  11.56  1.82  8.0 - 15.1 
Physician did not take health complaints 
seriously. 
TT  < enrollees  16.39  3.29  9.9 - 22.8  **  4.64  0.68  3.3 - 6.0 
TT  < disenrollees  23.90  3.69  16.7 - 31.1  **  16.62  2.19  12.3 - 20.9 
Believed care given by PCP was excellent. 
TT  < enrollees  33.68  4.09  25.7 - 41.7  **  50.78  2.91  45.1 - 56.5 
TT  < disenrollees  29.06  4.49  20.3 - 37.9  **  38.12  4.03  30.2 - 46.0 
Believed care given by PCP was good. 
TT  < enrollees  49.66  3.36  43.1 - 56.2  **  41.34  2.52  36.4 - 46.3 
TT  < disenrollees  28.97  4.19  20.8 - 37.2  **  37.11  2.32  32.6 - 41.7 
Believed care given by PCP was fair. 
TT  < enrollees  11.86  3.38  5.2 - 18.5  **  6.40  1.14  4.2 - 8.6 
TT  < disenrollees  29.64  6.11  17.7 - 41.6  **  14.63  2.80  9.1 - 20.1 
Ease of obtaining care was hard or very hard 
TT  < enrollees  10.50  2.63  5.3 - 15.7  **  4.51  0.78  3.0 - 6.0 
TT  < disenrollees  31.38  2.42  20.2 - 42.6  **  16.30  2.42  11.6 - 21.0 
D - 3
 Table D-2: Point Estimates, Confidence Intervals, and Statistical Significance by Medicare Aged/Disabled 
KEY:  TT = statistical significance tested  ** = difference is significant at .05 level 
Disabled  Age 65 or Older 
Point  Standard  95% Confidence  Point Estimate  Standard Error  95% Confidence 
Proportion of beneficiaries:  Estimate  Error  Interval  Interval 
Health at time of survey was poor to very poor. 
TT  < enrollees 
TT  < disenrollees  24.33  6.61  11.4 - 37.3  **  4.52  0.61  3.3 - 5.7 
31.70  6.01  19.9 - 43.5  9.15  1.55  6.1 - 12.2 
** 
HMO care caused health to improve. 
< enrollees  34.12  6.16  22.0 - 46.2  43.55  1.74  40.1 - 47.0 
TT  < disenrollees  16.56  5.37  6.0 - 27.1  **  30.47  2.18  26.2 - 34.7 
HMO care caused health to worsen. 
< enrollees  3.99  2.48  0.0 - 8.9  2.51  0.60  1.3 - 3.7 
TT  < disenrollees  17.68  6.38  5.2 - 30.2  **  10.88  1.69  7.6 - 14.2 
Primary physician explained treatment options. 
< enrollees 
TT  < disenrollees  92.03  3.09  86 0 - 98.1  89.47  0.91  87.7 - 91.3 
61.03  8.83  43.7 - 78.3  **  78.48  2.55  73.5 - 83.5 
Physician failed to give needed Medicare-
covered services. 
< enrollees  3.67  2.02  0.0 - 7.6  3.36  0.68  2.0 - 4.7 
TT  < disenrollees  27.54  8.91  10.1 - 45.0  **  11.00  1.61  7.8 - 14.2 
Physician failed to admit beneficiary to hospital 
when needed. 
< enrollees  4.01  2.69  0.0 - 9.3  1.44  0.48  0.5 - 2.4 
TT  < disenrollees  19.23  8.87  1.8 - 36.6  **  3.82  1.40  1.1 - 6.6 
D - 4
 Table D-2: Point Estimates, Confidence Intervals, and Statistical Significance by Medicare Aged/Disabled 
KEY:  TT = statistical significance tested  ** = difference is significant at .05 level 
Disabled  Age 65 or Older 
Point  Standard  95% Confidence  Point Estimate  Standard Error  95% Confidence 
Proportion of beneficiaries:  Estimate  Error  Interval  Interval 
Physician failed to refer beneficiary to a 
specialist when needed. 
TT  < enrollees  16.26  6.10  4.3 - 28.2  **  4.40  0.68  3.1 - 5.7 
TT  < disenrollees  36.15  8.27  19.9 - 52.4  **  12.65  2.04  8.7 - 16.6 
Physician did not take health complaints 
seriously. 
< enrollees  12.83  5.38  2.3 - 23.4  6.75  0.93  4.9 - 8.6 
TT  < disenrollees  39.27  8.24  23.1 - 55.4  **  17.05  1.86  13.4 - 20.7 
Believed care given by PCP was excellent. 
< enrollees  37.73  7.69  22.7 - 52.8  48.16  3.05  42.2 - 54.1 
TT  < disenrollees  33.18  8.00  17.5 - 48.9  **  36.35  2.54  31.4 - 41.3 
Believed care given by PCP was good. 
< enrollees  44.71  9.67  25.8 - 63.7  42.99  2.36  38.4 - 47.6 
< disenrollees  23.97  7.32  9.6 - 38.3  36.74  2.32  32.2 - 41.3 
Believed care given by PCP was fair. 
< enrollees  14.26  5.21  4.0 - 24.5  6.90  1.49  4.0 - 9.8 
< disenrollees  29.14  8.65  12.2 - 46.1  16.75  2.03  12.8 - 20.7 
Ease of obtaining care was hard or very hard 
TT  < enrollees  24.06  6.15  12.0 - 36.1  **  4.53  0.74  3.1 - 6.0 
TT  < disenrollees  37.24  8.91  19.8 - 54.7  **  18.30  3.00  12.4 - 24.2 
D - 5
 Table D-3: Point Estimates, Confidence Intervals, and Statistical Significance by Comorbidity 
KEY:  TT = statistical significance tested  ** = difference is significant at .05 level 
2+ Illnesses  <2 Illnesses 
Point Estimate  Standard Error  95% Confidence  Point Estimate  Standard Error  95% Confidence 
Proportion of beneficiaries:  Interval  Interval 
Health at time of survey was poor to very poor. 
TT  < enrollees 
TT  < disenrollees  17.39  3.70  10.1 - 24.6  **  2.72  0.64  1.5 - 4.0 
36.36  4.88  26.8 - 45.9  5.82  1.16  3.5 - 8.1 
** 
HMO care caused health to improve. 
TT  < enrollees  51.86  3.24  45.5 - 58.2  **  41.06  1.86  37.4 - 44.7 
TT  < disenrollees  37.05  6.19  24.9 - 49.2  **  28.25  2.20  23.9 - 32.6 
HMO care caused health to worsen. 
TT  < enrollees  7.36  2.91  1.7 - 13.1  **  1.45  0.40  0.7 - 2.2 
TT  < disenrollees  23.36  4.78  14.0 - 32.7  **  8.55  1.44  5.7 - 11.4 
Primary physician explained treatment options. 
< enrollees 
< disenrollees  85.91  2.56  80.9 - 90.9  90.93  1.13  88.7 - 93.1 
72.25  4.45  63.5 - 81.0  78.08  2.41  73.4 - 82.8 
Physician failed to give needed Medicare-
covered services. 
TT  < enrollees  8.52  2.99  2.7 - 14.4  **  2.30  0.53  1.3 - 3.3 
< disenrollees  11.78  3.63  4.7 - 18.9  12.36  2.22  8.0 - 16.7 
Physician failed to admit beneficiary to hospital 
when needed. 
TT  < enrollees  3.56  1.45  0.7 - 6.4  **  0.85  0.36  0.1 - 1.6 
TT  < disenrollees  13.10  3.46  6.3 - 19.9  **  2.59  2.59  0.0 - 5.5 
D - 6
 Table D-3: Point Estimates, Confidence Intervals, and Statistical Significance by Comorbidity 
KEY:  TT = statistical significance tested  ** = difference is significant at .05 level 
2+ Illnesses  <2 Illnesses 
Point Estimate  Standard Error  95% Confidence  Point Estimate  Standard Error  95% Confidence 
Proportion of beneficiaries:  Interval  Interval 
Physician failed to refer beneficiary to a 
specialist when needed. 
< enrollees  7.98  2.47  3.1 - 12.8  4.44  0.85  2.8 - 6.1 
TT  < disenrollees  20.67  4.60  11.7 - 29.7  **  12.66  2.73  7.3 - 18.0 
Physician did not take health complaints 
seriously. 
TT  < enrollees  13.85  3.58  6.8 - 20.9  **  5.81  0.82  4.2 - 7.4 
< disenrollees  16.94  4.39  8.3 - 25.5  18.78  2.23  14.4 - 23.2 
Believed care given by PCP was excellent. 
< enrollees  44.97  5.45  34.3 - 55.7  48.08  2.91  42.4 - 53.8 
< disenrollees  41.32  7.90  25.8 - 56.8  35.00  2.46  30.2 - 39.8 
Believed care given by PCP was good. 
< enrollees  38.25  3.26  31.9 - 44.6  44.41  2.62  39.3 - 49.5 
TT  < disenrollees  25.43  6.48  12.7 - 38.1  **  38.02  2.72  32.7 - 43.4 
Believed care given by PCP was fair. 
< enrollees  11.88  4.58  2.9 - 20.9  6.18  0.98  4.3 - 8.1 
< disenrollees  20.81  3.93  13.1 - 28.5  16.88  2.25  12.5 - 21.3 
Ease of obtaining care was hard or very hard 
< enrollees  7.28  2.20  3.0 - 11.6  4.97  0.76  3.5 - 6.5 
< disenrollees  25.29  6.00  13.5 - 37.1  18.42  2.80  12.9 - 23.9 
D - 7
 A P P E N D I X  E

AGENCY COMMENTS

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E - 1
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E - 2
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E - 3
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E - 4
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E - 5
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E - 6
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E - 7