Department  of  Health  and Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
BENEFICIARY  PERSPECTIVES  OF 
MEDICARE  RISK  HMOS  OFFICE  OF  INSPECTOR  GENERAL 
The  mission  of  the  Office  of Inspector  General  (OIG),  as mandated  by Public  Law  95-452,  as 
amended,  is to  protect  the  integrity  of  the  Department  of Health  and  Human  Services  (HHS) 
programs  as well  as the  health  and  welfare  of beneficiaries  served  by those  programs.  This 
statutory  mission  is carried  out  through  a nationwide  network  of  audits,  investigations,  and 
inspections  conducted  by three  OIG  operating  components:  the  Office  of Audit  Services,  the 
Office  of  Investigations,  and  the  Office  of Evaluation  and  Inspections.  The  OIG  also  informs 
the  Secretary  of  HHS  of  program  and  management  problems  and  recommends  courses  to 
correct  them. 
OFFICE  OF  AUDIT  SERVICES 
The  OIGS  Office  of  Audit  Services  (OAS)  provi~es  all auditing  semices  for  HHS,  either  by 
conducting  audits  with  its own  audit  resources  or  by overseeing  audit  work  done  by others. 
Audits  examine  the  performance  of  HHS  programs  and/or  its grantees  and  contractors  in 
carrying  out  their  respective  responsibilities  and  are  intended  to  provide  independent 
assessments  of  HHS  programs  and  operations  in order  to  reduce  waste,  abuse,  and 
mismanagement  and  to  promote  economy  and  efficiency  throughout  the  Department. 
OFFICE  OF  INVESTIGATIONS 
The  OIGS  Office  of  Investigations  (01)  conducts  criminal,  civil,  and  administrative

investigations  of  allegations  of wrongdoing  in HHS  programs  or  to  HHS  beneficiaries  and  of

unjust  enrichment  by providers.  The  investigative  efforts  of  01  lead  to  criminal  convictions,

administrative  sanctions,  or  civil money  penalties.  The  01  also  oversees  State  Medicaid  fraud

control  units  which  investigate  and  prosecute  fraud  and  patient  abuse  in  the  Medicaid  program.

OFFICE  OF  EVALUATION  AND  INSPECT-IONS 
The  OIGS  Office  of  Evaluation  and  Inspections  (OEI)  conducts  short-term  management  and 
program  evaluations  (called  inspections)  that  focus  on  issues  of concern  to  the  Department, 
the  Congress,  and  the  public.  The  findings  and  recommendations  contained  in  these  inspection 
reports  generate  rapid,  accurate,  and  up-to-date  information  on  the  efficiency,  vulnerability, 
and  effectiveness  of  departmental  programs.  This  report  was  prepared  in the  Dallas  regional 
office  under  the  direction  of Ralph  Tunnell,  Regional  Inspector  General  and  Chester  B. 
Slaughter,  Deputy  Regional  Inspector  General.  Project  staf~ 
REGION  HEADQUARTERS 
Michelle  Adams  Pamela  Smith  Hugh  Hetzer 
Leah  Bostick  Sarah  Taylor  Mark  Krushat 
George  DeLuna  Judith  Tyler  Brian  Ritchie 
Kevin  Golladay  Nancy  Watts  Barbara  Tedesco 
Carolyn  Neuwirth  Department  of Health  and Human  Services 
OFFICE  OF 
INSPECTOR  GENERAL 
BENEFICIARY  PERSPECTIVES  OF 
MEDICARE  RISK  HMOS  EXECUTIVE  SUMMARY 
PURPOSE 
This study describes  beneficiaries  perspectives  of the Medicare  risk HMO experience. 
BACKGROUND  AND METHODOLOGY 
Medicare  beneficiaries  may  join  a risk  health  maintenance  organization  (HMO)  through 
the  Medicare  program.  Under  a risk  contract,  Medicare  pays  the  HMO  a predetermined 
monthly  amount  (capitated  rate)  per  enrolled  beneficiary.  In return,  excepting  hospice 
care,  the HMO must provide  all Medicare  covered  services that are medically  necessary. 
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. 
As of July  1, 1994, the Health  Care Financing  Administration  (HCFA) reported  136 risk-
based HMO plans  served 2,036,279  Medicare  enrollees.  The Office of Managed  Care 
within HCFA  has oversight  responsibility  for Medicare  risk contracts  with HMOS. 
Using HCFA  databases,  we selected a stratil%d,  random  sample of 4,132  enrollees  and 
disenrollees  from 45 Medicare  risk HMOS.  Since our primary  focus is Medicare 
beneficiaries  perceptions  of their risk HMO experience,  we collected  information  directly 
from beneficiaries  in 1993.  We surveyed both enrollees  and disenrollees  to compare  their 
responses,  and thus,  to gain greater  insight into HMO issues.  We did not attempt to 
validate  their responses  through  record  review  or HMO contact. 
FINDINGS 
Generally,  beneficiary  responses  indictie  Medicare  risk HMOS provided  adequtie  service 
access for  most beneficiaries  who had joined. 
The majority  of enrollees  and disenrollees  reported  medical  care that maintained  or 
improved  their health,  timely appointments  for primary  and specialty care,  good access to 
Medicare  covered  services and to hospital,  specialty and emergency  care,  and sympathetic 
personal  treatment  by their HMOS and HMO doctors.  In some instances,  however, 
enrollees  and disenrollees  differed  markedly  in reporting  their HMO experiences. 
Beneficiary  responses indicate Medicare  risk HMOS generally  adhered to Federal 
enrollment  standards for  informing  benejicianes about applicahonprocedures,  lock-in 
and pnor approval for  specialty  care. 
i  However,  compliance  with Federal enrollment  stan&rdsfor  health screening  and 
informing  benejicianes of their appeal  nghtsappeared to be problemahc. 
	 43% of beneficiaries,  who could remember,  said they were asked at application 
about their health problems,  excluding  kidney failure  and hospice care;  3 % were 
required  to have a physical  examination  before joining  the HMO. 
	 25% of beneficiaries  reported  they did not know they had the right to appeal their 
HMOS refusal to provide  or pay for services. 
Most beneficiaries  reported timely doctor appointments for primary  and specialty  care, 
but some enrollees  and disenrollees  experienced  notewotihy  delays. 
	 94% of enrollees  and 85% of disenrollees  got an appointment  within  1 to 2 days 
when they believed  they were very sick. 
	 Over 75% of beneficiaries  usually  waited 8 days or less for appointments  with 
primary  doctors  and about two-thirds  usually waited the same for appointments  with 
specialists;  however,  16% waited for  13 days or longer for a primary  care visit and 
25% waited this long to see specialists. 
	 93% of enrollees  and 80% of disenrollees  typically  waited an hour or less in the 
office to see their primary  doctors. 
	 Most beneficiaries  could reach the offices of their primary  HMO doctors  by 
telephone,  but busy lines caused  11% of beneficiaries  to say they sometimes gave up 
on trying to make appointments. 
The great majority  of enrollees  believed  they got the Medicare  services they needed; 
disenrollees,  however,  reported more problems  with access to primary  and specialty  care. 
	 95% or more of enrollees  had good access to primary,  specialty,  hospital and 
emergency  care. 
	 While the majority  of disenrollees  also reported  good access,  20% to 25%  said they 
failed to receive  primary  care,  referrals  to specialists,  and HMO coverage  of 
emergency  care,  all services they believed  they needed. 
	 Perceived,  unmet  service needs and lock-in problems  led 22% of disenrollees  and 
7% of enrollees  to seek out-of-plan  care. 
ii  Most benejiciaties  believed  they were personally  well-treated  by their HMOS or primary 
doctors; however,  disenrollees  were more likely toperceive  unsympathetic  behaviom  that 
potentially  restrict service access. 
F	 12% of enrollees  and 39% of disenrollees  didnt feel their primary  HMO doctors 
took their health complaints  seriously;  over one-third  of both groups  said this 
happened  most to all of the time. 
	 Disenrollees  were 3 times as likely as enrollees  to believe that holding down the cost 
of care was more important  to their primary  HMO doctors  and HMOS than giving 
the best medical  care possible. 
Overall,  HMO benejiciuries  seemed  relatively  healthy;  however,  disenrollees  rtied  their 
health lower than enrollees  and repotied  a much greater  decline  in health status during 
their HMO stay. 
Analysis  of smaller groups  of enrollees  and disenrollees  revealed  additional  strengths 
and weaknesses  of Medicare  risk HMOS. 
	 Disenrollees  without prior  HMO experience  were more critical  of their HMOS than 
those with prior  experience;  however,  the majority  of both groups joined  another 
HMO upon leaving. 
	 Disabled/ENID  disenrolks,  more often than aged disenrollees,  reported  access 
problems  in several crucial  areas of their HMO care;  66% of disabled/ESRD 
enrollees  wanted to leave their HMOS. 
	 84% of enrollees  intended to stay with their HMOS; the remaining  16% either 
planned  to leave or wanted to leave,  but felt they could not, primarily  for reasons of 
affordability. 
  Almost one-third  of disenrollments  were solely for administrative  reasons,  such as a 
beneficiarys  moving or an HMOs  clerical  error;  the remaining  two-thirds  voiced 
more criticism  regarding  their awareness  of appeal rights,  the effectiveness  of HMO 
care and access to services. 
Personal preferences  in health care and service access problems  were the two non
administrahve categories  of reasons for  benejiciury  disenrollments. 
h	 HMO restrictions  on providers  and services,  plus high beneficiary  premiums/co
payments,  were the leading disenrollment  reasons based on personal  preferences  in 
health care delivery. 
... 
111  	 Enrollees  and disenrollees  agreed  the two most important  reasons for leaving their 
HMOS were the choice of primary  HMO doctors  and high beneficiary  premiums/co
payments. 
RECOMMENDATIONS 
As discussed,  beneficiary  responses  indicate Medicare  risk HMOS provide  adequate 
service access for most beneficiaries  who have joined.  However,  our survey results also 
indicate  some serious problems  with enrollment  procedures  and service access that we 
believe  require  HCFAS attention.  Our intent is not to prescribe  specific corrective 
actions,  but to identify,  based on information  from beneficiaries,  areas apparently  needing 
improvement  and to suggest techniques  HCFA  can use to further  monitor  these areas. 
Three  items  need  immediate  exploration: 
	 Better  informing  of beneficiaries  about their appeal rights as required  by Federal 
standards. 
	 Carefully  examining  service access problems  reported  by disabled/ESRD 
beneficiaries,  an especially  vulnerable  group. 
	 Monitoring  HMOS  for inappropriate  screening  of beneficiaries  health status at 
application. 
Other service access issues meriting  examination  by HCFA  in the near future concern 
beneficiaries  perceptions  of problems  with: 
  Making  routine appointments. 
E  Declining  health caused by HMO care. 
  HMOS refusal to provide  certain  services. 
Our experience  with this survey also suggests some protocols  HCFA  may want to adopt 
for its instrument  to survey disenrolling  HMO beneficiaries. 
AGENCY  COMMENTS 
HCFA  concurred  with the reports  recommendations.  The Assistant  Secretary  for 
Planning  and Evaluation  suggested the inclusion  of other research,  comparative  data,  and 
HCFA  monitoring  efforts  in the report to provide  context for our findings.  However,  we 
chose not to largely because  such discussions  would have over-extended  an already 
lengthy report.  Instead,  we cautioned  readers  about the nature and limitations  of the data 
presented,  and have included the bibliography  for those interested  in more detail. 
iv  TABLE  OF  CONTENTS 
EXECUTIVE  SUMMARY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 ,i 
INTRODUCTION.  . . . . . . . . .  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 .1 
FINDINGS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 .4 
Overview  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 .4 
Health Status andServiceUse  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 .4 
Federal  HMORequirements.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 .7 
Access: Appointments for Services  . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 .8 
Access: Medical Services and Out-of-Plan Care  . . . . . . . . . . . . . . . . . . . . .
 10 
Access: Behavioral Barriersto  Services  . . . . . . . . . . . . . . . . . . . . . . . . . .
 12 
Problems  and Differences  Among Beneficiary  Sub-Populations  . . . . . . . . . . . .
 13 
Reasons forLeavinganHMO.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 18 
RECOMMENDATIONS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 23 
AGENCY  COMMENTS  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 25 
ENDNOTES  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .<
 27 
BIBLIOGRAPHY  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
 32 
APPENDICES

A: Sample andResponseRates  . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..A-l 
B: Sample Demographics  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..B-1

C: Confidence Intervals  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..C-1

D: Beneficiary Health Status..  . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..D-l

E: Text ofAgencyComments  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..E-1
 INTRODUCTION 
PURPOSE 
This study describes  beneficiaries  perspectives  of the Medicare  risk HMO experience. 
BACKGROUND 
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 beneficiarys  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 grievance/appeal  procedures.  Under a risk contract,  Medicare  pays the 
HMO a predetermined  monthly amount  (capitated  rate) per enrolled  beneficiary.  In 
return,  excepting  hospice care,  the HMO must provide  all Medicare  covered  services,  that 
are medically  necessary.  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.  The Office of Managed  Care within the Health 
Care Financing  Administration  (HCFA)  has oversight  responsibility  for Medicare  risk 
contracts  with HMOS.  As of July  1, 1994, HCFA  reported  136 risk-based  HMO plans 
served 2,036,279  Medicare  enrollees. 1 
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 deftition  from literature. 23 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 patients  medical needs,  or price  of services and the 
patients  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 four areas:  appointments,  including 
waiting time and administrative  processes  for making them;  restrictions  on medical 
services;  incidence  and reasons for out-of-plan  care;  and behavior  of primary  HMO 
doctors  and other HMO personnel  towards  beneficiaries. 
1  Sample selection 
We selected a stratiiled  random  sample from HCFAS Group Health  Plan (GHP) data 
base.  First,  we sampled 45 HMOS from the 87 HMOS under  a risk contract  with HCFA 
as of February  1993.4  Beginning  with the GHP data,  we counted the number  of 
enrollments  occurring  within calendar  years  1991 and 1992.  For this cohort,  we then 
calculated  the proportion  of disenrollments5  within the following  12 months.  Based on 
this disenrollment  rate,  we divided the 87 risk HMOS into three  strata of 29 HMOS each. 
Within each strata,  we selected  15 HMOS by simple random  sampling.6  Second,  from 
each sampled HMO,  we randomly  selected 50 Medicare  beneficiaries  who were enrolled 
as of February  28,  1993 and 50 who had disenrolled  between  November  1992 and 
February  1993 inclusive  (see Appendix  A).  When the total number per HMO for either 
group was less than 50, we selected them all.  Using HCFAS Enrollment  Data Base,  we 
excluded,  from the sampling universe,  beneficiaries  who had died or who appeared  as 
current  enrollees,  but had actually  disenrolled  since the last update to the GHP fde.  This 
process  resulted  in 2,217  enrollees  and 1,915 disenrollees  for a total of 4,132 
beneficiaries. 
Scope and &a  collection 
Since this studys primary  focus is the Medicare  beneficiaries  perceptions  of a risk HMO 
experience,  we only collected  information  from them.  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  surveys to 4,132 
beneficiaries  in late April  1993.7  In early May  1993, we mailed a follow-up  letter and 
second survey to non-respondents;  we closed data collection  in July  1993.  Both enrollees 
and disenrollees  provided  information  on sample and demographic  data,  enrollment 
experience,  past health  status and service use,  HMO environment,  and HMO  services 
available.  Additionally,  enrollees  were asked about current  health  status and future plans 
for HMO membership  while disenrollees  were asked about health  status at disenrolknent 
and reasons  for disenrollment.  We surveyed both enrollees  and disenrollees  to compare 
their responses,  and thus,  to gain greater  insight into HMO issues.  We did not 
specifically  ask beneficiaries  about their  satisfaction  with the HMOS, as the concept of 
satisfaction  is less objective  than,  and sometimes independent  of, the issues of membership 
in a Medicare  risk HMO.  A total of 2882 surveys were deemed usable,g yielding an 
unweighed  return  rate of 70 % overall,  77% for enrollees  (N= 1705) and 61% for 
disenrollees  (N= 1177).9 
Weighting and interprettion 
This study is a descriptive,  exploratory  analysis.  We did not assume knowledge  about 
non-respondents.  We used tests for differences  of means and proportions  to discern 
sigtilcant  differences  between respondents  and non-respondents  by three  demographic 
characteristics  -- age,  race,  and sex.  Significant  differences  were found based on 
2  unweighed  data.  We decided to take the most conservative  approach,  weighting the 
sample to approximate  70% of the universe  (see Appendix A).  Also see Appendix B for 
respondent  demographic  profde  which shows little difference  between enrollees  and 
disenrollees.  Respondents  were predominantly  female,  white,  age 65 or older,  and high 
school graduates  or higher.  We calculated  from HCFA  data provided  for each respondent 
that the average  length of enrollment  in the sampled HMOS was 36 months for enrollees 
and 29 months for disenrollees. 
When weighted,  the sample approximates  the disproportionate  distribution  of enrollees  and 
disenrollees  in the universe  (97% vs. 3%).  Because of this imbalance,  we initially 
analyzed the two groups  separately.  Once proportions  were computed per  question for 
each group,  answers  from enrollees  and disenrollees  were then compared  and are the basis 
for all Tables  in this report  except for Tables  showing sub-populations. 10 Interpretation 
of these comparisons  requires  caution,  however,  since a small percentage  of enrollees  can 
represent  many Medicare  beneficiaries  -- more beneficiaries,  in fact, than a high 
percentage  of disenrollees. 
We  also analyzed  sub-populations  of enrollees  and disenrollees.  Within each of these 
groups,  we compared  beneficiaries  who are age 65 or older,  disabledl 1 or have ESRD, 
and beneficiaries  with and without prior  HMO experience.  For enrollees  only,  we 
compared  those who planned  to stay in their HMOS to those who planned  to leave or 
wanted to leave but felt they could not.  For disenrollees  only,  we compared  those who 
left for personal  or service access reasons to those who left solely for administrative 
reasons.  Administrative  reasons for disenrollment  were beneficiaries  moving out of the 
HMO  service area,  their HMOS no longer participating  as a Medicare  risk HMO or in 
their companies  retirement  plan,  or involuntary  disenrollments  such as late premium 
payments  or clerical  error.  Data for the sub-populations  are presented  in Tables  12 to 15 
and in Figure  1 and only cover  survey questions that differentiated  the sub-populations. 
Throughout  the report,  percentages  are based on the number  of responses  to each 
question.  We calculated  response  rates based on the weighted value of the beneficiaries 
eligible  to answer,  which varies  due to the use of contingency  questions.  Questions with 
response  rates of less than 50% are not reported.  The majority  of questions had response 
rates of 80% to 99%.  Additionally,  we computed  95% conildence  intervals  for key 
questions  (see Appendix  C).  A few of the contldence  intervals  are quite broad, 
particularly  for disenrollees,  due to the small number of responses  for some questions. 
This inspection  was conducted  in accordance  with the Quality Standurdsfor Inspections 
issued by the Presidents  Council on Integrity  and Efficiency. 
3
 FINDINGS

OVERVIEW 
Generally,  beneficiary  responses  indicaie Medicare  risk HMOS provided  adequate  service 
access for  most benej?ciuneswho had joined. 
The majority  of enrollees  and disenrollees  reported  medical  care that maintained  or 
improved  their health,  timely appointments  for primary  and specialty care,  good access to 
Medicare  covered  services  and to hospital,  specialty and emergency  care,  and sympathetic 
personal  treatment  by their HMOS and HMO doctors.  In some in&nces,  however, 
enrollees  and disenrollees  differed  markedly  in reporting  their HMO experiences.  When 
this happened,  we describe  the difference  as a point of comparison. 
HEALTH  STATUS  AND SERVICE  USE 
Overall,  HMO beneficiaries  seemed retively  healthy,  and few perceived  themselves  as 
potentially  high users of medical  services. 
Based on beneficiary-reported  incidence  of acute or chronic medical  conditions,  the 
majority  of enrollees  and disenrollees  appeared  to be in relatively  good health.  Two-
thirds  of both groups reported  they had no serious health problems  while enrolled  in the 
sampled HMOS.  One-third  had one or more  serious problems  such as, broken bones 
(9%),  cancer  (8%),  heart attack  (7%), pneumonia  (7%) or a stroke (3%). 12 Reports on 
chronic  ailments  from both groups  show about one-tenth  had none and one-third  had 1 to 
3 chronic ailments  of varying  severity,  e.g.,  high blood pressure  only or joint pain and 
skin problems.  Only 3% were nursing home patients  in the last year. 
Table  1:  Beneficiaries  Health13 
All  Dkenrollees  Enrokea 
While in the HMO,  reported no serious problems,  e.g.,  67%  69%  67% 
broken bones or cancer.  (669,619)  (16,440)  (653,180) 
While in the HMO,  reported: 
10%  12%  10% 
F  no chronic ailments  (97,674)  (3,043)  (100,717) 
32% 
31%  32% 
  1 to 3 chronic ailments of varying severity  (317,887)  (7,584)  (310,304) 
3%  3% 
Were nursing home patients in the last year.  (27,363)  (R)  (26,547) 
Had been admitted to the hospital while a member of the  49%  42%  49% 
sampled HMO.  (492,668)  (10,334)  (482,334) 
4  By  our deftition,  few beneficiaries  reported  a high propensity  to use services.  Only 13% 
of enrollees  and 10% of disenrollees  both worried  about their health the same as or more 
than other people  their age ~  went to the doctor as soon as they started to feel bad. 
Their  reported  frequency  of doctor visits and hospital admissions  supports their  self-
evaluations  of propensity  to use services.  During the last year,  91% of all beneficiaries 
saw their primary  HMO doctors  or specialists  and 49% had been admitted to the hospital 
while a member  of the sampled HMO.  However,  Table 2 shows that high propensity 
beneficiaries  more often reported  the higher rates of doctor visits and hospital  admissions. 
Table  2:  Propensity  Level  and  Service  Use 
Enrollees  Propensity  Disenrollees  Propensity 
Low  Medium  High  Low  Medium  High 
1 to 6 ~  primary HMO 
doctor or specialist visits  83%  73%  65%  87%  83%  60% 
in the last year.  (204,527)  (145,428)  (72,403)  (5,581)  (4,256)  (1,281) 
7 or more =M  primary 
HMO doctor or specialist  17%  27%  35%  13%  17%  40% 
visits in the last year.  (40,915)  (54,384)  (39,032)  (829)  (886)  (860) 
Admitted to the hospital 
while a member of the  41%  53%  62%  27%  54%  53% 
sampled HMO.  (123,378)  (120,626)  (74,427)  (2,118)  (3,202)  (1,337) 
Disenrollees  rtied  their health lower than enrollees  and reported  a much greater  decline 
in health status during their HMO stay. 
Enrollees  and disenrollees  rated their health  status differently.  A comparison  of the 
number  and severity  of acute/chronic  health problems  reported  by beneficiaries  indicates 
the enrollee  and disenrollee  groups are similarly  distributed,  ranging  from no problems  to 
multiple  conditions  (see Appendix  D).  However,  disenrollees  tended to rate themselves  in 
poorer  health overall  than the enrollees  who are comparable  in the number  and severity of 
health problems.  Table 3 shows that most beneficiaries  rated their health as good to 
excellent,  both when they joined  the HMO and when we surveyed them -- an average 
elapsed time of 36 months for enrollees  and 29 months for disenrollees.  Both groups also 
self-reported  deteriorating  health over time.  However,  at disenrollment,  19% fewer 
disenrollees  rated their health as good to excellent  compared  to when they frost joined 
their HMOS.  This is more than double the 9% rate of decline from good to excellent 
health reported  by enrollees. 
5
 Table  3:  Beneficiaries  Self-Reported  Health  Status 
All  DkenroIIees  Enrollees 
Were enrolled in the sampled HMO more than 12  76%  65%  77% 
months.  (847,226)  (18,450)  (828,776) 
Rated their health as good to excellent when they joined  79%  70%  79% 
the HMO.  (854,295)  (18,627)  (835,668) 
69%  51%  70% 
Rate their health as good to excellent now.  (756,428)  (12,905)  (743,523) 
Change  -lo%  -19%  -9% 
While  not conclusive,  our data suggest that a beneficiarys  self-reported  health status and 
propensity  to use  services,  which was discussed earlier,  may be related. 14 Another  study 
noted high users tend to have chronic  conditions  and multiple problems  that make their 
greater  use seem appropriate. 15  Generally,  we found both enrollees  and disenrollees 
were less likely to rate their health as good to excellent  as their propensity  to use services 
increased  (see Table 4).  However,  while the enrollees  self-reported  rate of declining 
health over time was about the same for each level of propensity  to use services, 
disenrollees  self-reported  rate of declining  health increased  as propensity  to use services 
increased.  Our data do not explain this difference  between enrollees  and disenrollees; 
perhaps  more detailed  research  is required  concerning  the relationship  between beneficial 
access to services  and perceived  health  status. 
Table  4:  Propensity  to Use  Services  and  Self-Reported  Health  Status 
Enrollees  Propensity  Disenrollees  Propensity 
Low  Medium  High  Low  Medium  High 
Good to excellent health  90%  84%  62%  77%  71%  56% 
when HMO joined.  (290,009)  (217,096)  (78,867)  (6,824)  (4,726)  (1,576) 
Good to excellent health  80%  72%  55%  62%  49%  31% 
now.  (263,243)  (184,336)  (75,743)  (5,309)  (3,134)  (835) 
Change  -10%  -12%  -7%  -15%  -22%  -25% 
Disenrollees  were much more likely to blhme their HMO  care for  their declining  health. 
Another  important  difference  between  enrollees  and disertrollees is how they rated the 
effectiveness  of the HMO care  (see Table 5).  Disenrollees  (22%) were ten times more 
likely than enrollees  (2%) to believe the medical  care received  through  the HMO caused 
their health to worsen.  While  slightly more than 40% of both groups perceived  that the 
6
 HMO medical  care caused their health to stay about the same, fully half of enrollees  said 
HMO care improved  their health compared  to only one-third  of disenrollees. 
II  Table  5:  Effect  of HMO  care  on Beneficiaries  Health 
II  All  Disenrollees  Enrollees 
Medical care received through the HMO caused their 
health to: 
50%  32?4  50% 
  improve  (505,538)  (7,239)  (498,298) 
43%  41% 
F  stay the same  (432,605)  (9,335)  (42~,?70) 
2%  22%  2% 
b  worsen  (22,475)  (4,951)  (17,524) 
FEDERAL  HMO  REQUIREMENTS 
Beneficiary  responses  indicaie HMOS generally  adhered to Federal standurds for 
enrollment procedures,  but screening for  health status af applic~on  and a lack of 
beneficiary  awareness  of appeal  rights were apparent problem  areas. 
Beneficiaries  recollections  and perceptions  indicate  weaknesses  in enrollment  procedures 
(P), and in beneficiary  understanding  of lock-in  (L) and individual  appeal/grievance  rights 
(R).  With the exceptions  of ESRD and the election  of hospice care,  Federal  regulations 
prohibit  HMOS from denying or discouraging  enrolhnent  based on a beneficiarys  health 
status.  HMOS must also adequately  inform beneficiaries  about lock-in to the HMO and 
grievance/appeal  procedures.  Basically,  the experiences  of enrollees  and disenrollees  were 
similar  (see Table 6).  However,  disenrollees  were less likely than enrollees  to have a 
good overall understanding  of HMOS.16 
Items  1 and 2 in Table  6 illustrate  how HMOS may have improperly  screened  applicants 
based on their health  status.  More than 2 of 5 beneficiaries,  who could remember,  said 
they were asked at application  about their health problems,  excluding  kidney failure  and 
hospice care.  Between 2% and 3% reported  a physical  examination  was required  before 
they could join  the HMO,  an event that should never  occur. 17 We specifically  asked 
beneficiaries  about their experiences  at application.  However,  some HMOS conduct a 
health assessment  interview  shortly after enrollment.  If some of these responses  refer to 
such health assessments,  this may have inflated our data.  However,  the length of 
enrollment  in the HMO did not seem to affect beneficiary  responses.  The proportion  of 
beneficiaries  reporting  health questions and required  physical  examinations  at application 
was nearly the same for beneficiaries  who had been enrolled  for more than  12 months and 
for  12 months or less. 
7
 Table  6:  Enrollment  Experience 
All  Dkenrollees  Enrollees 
1. (P)  Were asked at application about health problems,  43%  48%  43% 
excluding kidney failure and hospice care.  (322,502)  (9,442)  (313,060) 
2.	(P)  Were required to have a physical examination  3% 
before joining  the HMO.  (2;,?54)  (22)  (25,827) 
3.	(P)  Didnt know they could change their minds about  8%  15%  8% 
enrolling in the HMO after they applied.  (78,631)  (3,446)  (75,186) 
4. (L)  Didnt know,  from the beginning, they: 
F  needed a referral from their primary HMO  11%  17%  10% 
doctors to see a specialist.  (115,197)  (4,566)  (110,631) 
  could only use HMO doctors and hospitals 
(except for emergent care and urgent care outside  4%  6%  4% 
the service area).  (40,637)  (1,665)  (38,972) 
5.	(R)  Didn t know they had the right to appeal an  25%  31%  25% 
HMOs  refusal to provide or pay for services.  (250,624)  (6,753)  (243,871) 
6.	 Overall, had a good knowledge  from the  76%  66%  76% 
beginning of how the HMO would operate.  (716,242)  (15,532)  (700,709) 
Also problematic  is the fact that at least  1 in 10 enrollees  and disenrollees  didnt know 
from the beginning  they would need referrals  from their primary  HMO doctors  to receive 
specialty care  (item 4).  Finally,  25% didnt know they have the right to appeal the 
HMOs refusal  to provide  or pay for services  (item 5).  Forty-four  percent  of disenrollees, 
who didnt know about their appeal rights,  were most likely to say they had been denied 
and would have appealed  if they had known compared  to only 9 % of enrollees  in the same 
circumstances.  In contrast,  71% of enrollees,  who didnt know they had appeal rights, 
most often said their HMOS didnt refuse to provide  or pay for services in the frost place. 
ACCESS:  APPOINTMENTS  FOR  SERVICES 
Most beneficiaries  reported timely doctor appointments for primary  and specialy  care, 
but some enrollees  and disenrollees  experienced  noteworthy  delays. 
Timely  appointments  can entail days elapsed before  a scheduled appointment  or time spent

in an office waiting to see a doctor.  Table 7 shows that the majority  of enrollees  and

disenrollees  said they got appointments  within  1 to 2 days when they believed  they were

very  sick, could schedule appointments  with primary  care doctors  and specialists within 8

days or less,  and usually waited less than an hour in the office to see the doctor.

However,  disenrollees  did not fare as well as enrollees  in two categories  of timely

appointments  -- quickly  scheduled appointments  for very  sick beneficiaries  and time spent

8  waiting in the office to see the doctor.  Of the enrollees  and disenrollees  who had been 
very sick, disenrollees  were 2.5 times as likely to say they didnt get an appointment 
within a day or two.  Disenrollees  also reported  longer waits in the office to see their 
primary  HMO doctors;  they were almost three times as likely to wait  1 hour or more 
compared  to enrollees. 
Table  7:  Appointment  Times 
All  Dkenrollees  Enrollees 
Were able to get a doctors  appointment in a day or 2  94%  85%  94% 
when they were very sick.  (651, 199)  (14,579)  (636,620) 
For a scheduled appointment with their primruy HMO 
doctors, usually waited: 
52%  52%  52% 
F  1to 4 days  (496, 182)  (11,876)  (484,306) 
26%  23%  26% 
  5 to 8 days  (240,484)  (5,325)  (245,809) 
6%  6% 
F 9 to 12 days  (60,588)  (1:5?4)  (58,994) 
16%  18%  16% 
F  13 to more than 20 days  (154,852)  (4,219)  (150,632) 
For a scheduled appointment with specirdists, usually 
waited: 
34%  43%  34% 
  lto4  days  (268,781)  (7, 194)  (261 ,588) 
29%  24%  29% 
F 5 to 8 days  (229, 112)  (4,018)  (225,094) 
12%  7%  12% 
k  9 to 12 days  (94,202)  (1,239)  (95,441) 
24%  26%  24% 
F  13 to more than 20 days  (189,212)  (4,464)  (184,748) 
Usually waited in the office  before seeing their primary 
HMO doctors: 
53%  36%  53% 
F  less than 1/2 hour  (525,978)  (8,186)  (517,792) 
40%  44%  40% 
  1/2 hour to 1 hour  (400,354)  (10,006)  (390,348) 
20% 
b  more than 1 hour  (69T;O)  (4,609)  (64~&) 
A substantial  group  (16% to 26%) of enrollees  and disenrollees  reported  waiting from  13 
to more than 20 days for scheduled appointments  for primary  and specialty care.  This 
wait is an important  consideration  for beneficiaries  who have serious hed~h problems  and/ 
or multiple  chronic  ailments  of varying  severity.  Moreover,  when sorted by the number 
and severity  of health problems,  the reported  waiting times for scheduled appointments 
differ little between the healthier  and sicker beneficiaries.  The sicker beneficiaries  were 
just  as likely as the healthier  beneficiaries,  or slightly more likely in some cases,  to wait 
9  13 days or longer for scheduled appointments. 18 ~  exception  was disenrollees  who are 
disabled or have ESRD;  81% of these waited  8 days or less for scheduled appointments 
with specialists. 19 
The data suggest that some enrollees  and disenrollees  may have had better  access to 
physician  care for more acute conditions  than for health maintenance  or preventive  care. 
A high percentage  of both groups were able to see a doctor quickly when they were very 
sick.  Those with the more numerous  or severe health problems  were more likely to get 
appointments  quickly  when they felt very  sick.  This pattern  for appointments  contrasts 
with the one noted above concerning  waiting time for scheduled appointments  with 
primary  HMO doctors  and specialists. 
Busy telephone  lines and misplaced  medical  records caused appointment  difficulties for 
some benejicianes. 
Busy telephone  lines and misplaced  medical  records  can also affect beneficiaries  ability to 
make appointments  for care.  Busy telephone  lines did hinder  some beneficiaries  access 
to services  (see Table  8).  Disenrollees  reported  encountering  consistently  busy telephone 
lines almost twice as often as enrollees,  and said they gave up trying to make 
appointments  slightly more often.  Problems  with medical records  were relatively 
uncommon.  Of the 9 % of all beneficiaries  who reported  lost or misplaced  medical 
records,  only 3% (N= 2,977) reported  they were kept from using HMO covered  services 
as a result. 
Table  8:  Appointments  by Telephone 
All  Disenrolkes  Enrollees 
19%  34%  19% 
Reported busy lines all to most of the time.  (116,784)  (5,093)  (111,691) 
Sometimes gave up on making appointments due to the  11%  17%  11% 
busy lines.  (67,768)  (2,627)  (65,141) 
ACCESS:  MEDICAL  SERVICES  AND OUT-OF-PLAN  CARE 
The great majority  of beneficiaries  believed  they received  the Medicare  services they 
needed; however,  disenrollees  were more likely than enrollees  to perceive  problems  with 
access to pnmary and specialty  care. 
A large majority  of enrollees  and disenrollees  believed  their primary  HMO doctors and 
HMOS provid~  the necessary  care.  Their responses  consist&tly  ~dicated  good access to 
Medicare  covered  services,  hospital care and specialty care (see Table 9).  However, 
disenrollees  reported  more access problems  in three categories.  First,  disenrollees  (22%) 
said their primary  HMO doctors  failed to provide  Medicare  covered  services  7 times as 
10  often as enrollees  (3%).  Second, disenrollees  (23%) were much more likely than 
enrollees  (5%) to report  their doctors  failure to give the necessary  referrals  to specialists. 
In fact,  disenrollees  who reported  1 or more  serious illnesses  (40%) were more than twice 
as likely to cite this denial of referrals  than disenrollees  who reported  no serious illnesses 
(17 %). Third,  disenrollees  (16%) more often reported  HMOS refiwi.ls to pay for 
emergency  care compared  to enrollees  (3%).  As with referrals  to specialists,  disenrollees 
with serious conditions  (25 %) were more likely to report  these refused payments  than 
disenrollees  with none (11 %).  A complication  of payment  for emergency  care is that 
beneficiaries,  understandably,  dont always differentiate  between  emergency  care and 
urgent  care.  While HMOS wiU generally pay for any required  emergency  care,  they will 
only pay for unauthorized  urgent  care outside the service area. 
Only 4% of all beneficiaries  reported  being told by medical  or office staffs that a needed 
medical  service was not covered  by the HMO.  The most frequently  mentioned  services 
were chiropractors  (37 %), laboratory  tests and x-rays  (14 %), medical  equipment  for home 
use (11 %), and skilled nursing home care  (10 %) -- all of which are Medicare  covered 
services  with some restrictions.  Although based on a few responses,  they may indicate a 
problem  with service provision  by the HMOS and/or  beneficiary  misunderstanding  of 
available  services. 
Table  9:  Service  Access 
All  Disenrollees  Enrollees 
Primaxy HMO doctor never failed to provide Medicare  94%  77%  95% 
covered  services that were needed.  (943,083)  (18,494)  (924,590) 
Primary HMO doctor never failed to admit to hospital  98%  91%  98% 
when  needed.  (931 ,995)  (20,742)  (911,253) 
Primary HMO doctor never failed to refer to a specialist  94%  75%  95?4 
when needed.  (914,121)  (17,666)  (896,459) 
HMO never refused to approve a Medicare covered  96%  92%  96% 
service  that primary HMO doctor wanted.  (931,001)  (20,681)  (910,320) 
HMO never refused to pay a doctor or hospital for  94%  80%  94% 
emergency care  (910,975)  (18,067)  (892,908) 
Perceived  unmet service needs and factors  related to lock-in lead some beneficiaries  to 
out-of-plan  care. 
Excluding  dental,  routine  eye,  and emergent/urgent  care,  7% of all beneficiaries  reported 
they had sought out-of-plan  care for Medicare  covered  services without priorapproval 
from the pfiary  HMO-doctor or the HMO  (see Table  10).  Disenroll~-s  went out-of-plan 
3 times as often as enrollees.  Four out of 5 of the most mentioned  reasons for seeking 
out-of-plan  care relate to service access problems  and misunderstanding  of lock-in,  and 
were of greater  importance  to disenrollees. 
11  Perceivd  access problems  (and thetipfid  fipacton  qutity  of cue)  areexemplifkxias

needing the unapproved  care,  not getting  services quickly  enough,  and not being helped by

the primary  HMO doctor  (reasons  1, 2 and S).  Not wa&ng  to go through  the HMO for

specialty care  (reason 4) can also indicate  access problems  and/or  beneficiaries

discomfort  with HMO control  of utilization  through  lock-in.  Not knowing they would

have to pay for out-of-plan  care  (reason 3) illustrates  beneficiary  misunderstanding  of

lock-in.  The majority  of beneficiaries  who sought out-of-plan  care had done so 1 to 3

times in the last year  (78% of disenrollees  and 87% of enrollees).

Table  10:  Seeking  Out-of-PIan  Care 
WHo? 
All  Disenrokes  Enrollees 
7%  22%  7% 
Beneficiaries who went out-o f-plm  (70,817)  (5,187)  (65,629) 
WHY? 
42%  51%  41% 
1.  Needed care even if HMO would not approve  (27,708)  (2,368)  (25,340) 
21%  46%  19% 
2.  Couldnt  get HMO services quickly enough  (13,501)  (1,946)  (11,555) 
18%  36%  16% 
3.  Didnt  know  they would  have  to pay  (11,285)  (1,774)  (9,511) 
12%  15%  12% 
4.  Didnt  want to go through HMO  to see specialist  (8,009)  (700)  (7,310) 
12%  42%  10% 
5.  Primary HMO doctor wasnt helping beneficiary  (7,987)  (2,094)  (5,892) 
ACCESS:  BEHAVIORAL  BARRIERS  TO  SERVICES 
Most benejiciaties  believed  they were personally  well-tre~ed  by their HMOS or primary 
doctors;  however,  disenrollees  were more likely to perceive  unsympathetic  behaviom  that 
potentially  restrict  service access. 
Unsympathetic  behavior  of primary  HMO doctors,  their  staffs and HMO ofilce  staff can 
directly  or subtly restrict  beneficiaries  access to medical  services.  Actually  telling 
beneficiaries  that their  medical  needs could not be accommodated  is a direct approach  for 
which we found only slight evidence,  i.e.,  less than  1% of all beneficiaries  noted a 
problem.  However,  about 4% of disenrollees,  an estimated  900 beneficiaries,  said they 
had been told by primary  HMO doctors,  their  staffs or HMO office staff that the HMO 
couldn t afford the medical  care that the beneficiary  needed or that they would receive 
better  care outside the HM0.20  In addition,  medical professionals  can subtly curtail 
access to services  by not taking health complaints  seriously  or by showing undue concern 
12 
.  about treatment  costs.  Overall,  10% to  12% of beneficiaries  perceived  these kinds of 
personal  treatment  problems  that can indirectly  restrict  access  (see Table  11).21 
Disenrollees  were more than 3 times as likely as enrollees  to believe  their primary  HMO 
doctors  did not take their health complaints  seriously.  However,  substantial portions  of 
both enrollees  (36 %) and disenrolkxs  (44%),  who didnt feel they were taken  seriously, 
said they encountered  this attitude  most to all of the time.  Disenrollees  were about 3 
times as likely to believe  that holding down the cost of care was more important  to their 
primary  HMO doctors  or their HMOS than giving the best medical  care possible. 
Disenrollees  were also more likely than enrollees  to say they didnt know what was most 
important  to their doctors  and HMOS.  Enrollees  were comparatively  more deftite,  with 
over two-thirds  saying that giving the best medical  care possible  is most important  to their 
doctors  and HMOS. 
Table  11:  Personal  Treatment  of Beneficiaries 
All  Dkenrolkes  Enrollees 
Primary HMO  doctor  did not take health compltits  12%  39%  12% 
seriously.  (1 17,723)  (8,868)  (108,855) 
36%  36% 
Didnt  take complaints  seriously  all to most  of the time.  (36,434)  (3%5)  (32,760) 
Most  important  to your primary HMO doctor is:22 
10%  28%  10% 
F  holding down the cost of care  (101,155)  (6,460)  (94,695) 
72%  47%  73% 
b  i%iv@ the best medical care possible  (727,550)  (10,927)  (716,623) 
13%  24%  12% 
F  dont know  (126,383)  (5,564)  (120,S19) 
Most important  to your HMO is:22 
11%  35%  11% 
~  holding down the cost of care  (116,436)  (8,071)  (108,364) 
66%  39%  67% 
  @ving the best medical care possible  (676,073)  (9.016)  (667,057) 
12%  20%  12% 
*  dont know  (125,318)  (4,609)  (120,709) 
PROBLEMS  AND DIFFEREN  CES  AMONG  BENEFICIARY  SUB-POPULATIONS 
DisabledlESRD  disenrollees  most often repotied  access problems  in several  crucial areas 
of their HMO  care; many dis@led~ES~-enrollees  wanted to leave. 
Disenrollees  who are disabled  or who have ESRD are a small (an estimated  2300 
beneficiaries),  highly critical  group. 23  As shown in Table  12, they were twice as likely 
as aged disenrollees  and 41 times as likely as disabled/ESRD  enrollees  to say that medical 
care received  through  the HMO caused their health to worsen.  In addition,  more than all 
13 
.  the aged beneficiaries  and disabled/~~  enroll~s,  these disenrollees  reported  having 
limited access  to some medical  services.  They were the most likely  to report  that their 
ptiary  ~0  doctors restrictedaccess toneeded Medicare  covered  services,  didnt refer 
them to specialists  when necess~,  and didnt take their health complaints  seriously. 
Iheywere also the most likely to seek out-of-plan  care while still enrollti  in the HMO 
and to believe  that holding down the cost of cme was more impo~t  to primary  HMO 
doctors  and the HMOS than providing  the best medical  care possible. 
Table  12:  Beneficim  Persp.&tivs  bv.  Medi~re  CatWoti~  of Aged   or Disabled/ES~
Dkenrollm  Enrollees 
Aged  Dwbld/  Aged  D~abled/ 
ESRD  ESRD 
Medical care received through the HMO  20%  41%  2%  1% 
caused  beneficiqs  health to get worse.  (4,094)  (858)  (17,294)  (231) 
For a scheduled appointment with their 
Primary HMO doctors,  usually waited: 
- . 
P~aIY  WO  doctors  restricted  access toneeded Medicare  cover&i services,  didnt refer 
them to speci~sts  when necess~,  and didnt take their health comptits  seriously. 
They were also the most likely to seek out-of-plm  care while still enrolled  in the HMO 
and to believe  that holdtig  down the cost of c~e  was more im~otit  to D&a~  HMO 
doctors  and the ~Os  thm  provid~g  the bestmdicd  cm  po;5ib1e.    --
Table  12:  Beneficiq  PempWtiv6  by Mediwe  Cat~ori~  of Aged  or Disabled~S~ 
Disenrollees  Enroll= 
Aged  Disabled/  Aged  Dwabledf 
ESRD  ESRD 
Medical care receivd  through the HMO  20%  41% 
caused beneflcia~s  health to get worse. 
(4,094)  (858)  (1;?94)  (:3;) 
For a scheduld  appointment with their 
primary HMO doctors,  usually waited: 
49%  78%  51%  68% 
  1 to 4 days  (10,246)  (1,630)  (4y6&7)  (15,749) 
24%  15%  11% 
  5t08&ys  (5,011)  (314)  (237,936)  (2,549) 
27%  8%  23%  21% 
*  more than 8 days 
(5,654)  (158)  (204,855)  (4,771) 
For a scheduled appointment with specialism, 
usuaIlywaited: 
40%  69%  35%  12% 
  lto4&ys  (5,976)  (1,218)  (258,235)  (3,353) 
25%  13%  29%  42% 
b  5 to 8 days  (3,797)  (222)  (213,086) (12 fmp~ 
a--
36%  19% 
b  more than 8 days  (5,370)  -
Primary HMO doctor fail-~ .-
Me~i.*- Concerning  waits for scheduled appointments  with their primary  HMO doctors and 
specialists,  the pattern  is reversed  in favor of disabled/ESRD  disenrollees.  The majority 
of them waited the shortest times  (1 to 4 days).  In contrast,  disabled/ESRD  enrollees 
were the most likely to wait from 5 to 8 days or longer for appointments  with specialists. 
Sixty-six percent  (an estimated  18,000) of these enrollees  reported  wanting to leave their 
HMOS, but felt they couldnt. 
Disenrollees  without prior  HMO experience  were more ctical  of their HMOS than those 
with pnor experience;  the majority  of both groups joined  another HMO  upon leaving. 
While  most beneficiaries  (86 %) were not HMO members  immediately  before joining  the 
sampled HMO,  this lack of prior  experience  with HMOS seems to have had more 
influence  on disenrollees  perceptions  of service access than on enrollees.  Enrollees  with 
and without prior  HMO experience  responded  similarly  about the various  aspects of 
service access.  On the other hand,  disenrollees  who had not been HMO members 
previously  (an estimated  20,000  beneficiaries)  reported  access problems  more often.  As 
Table  13shows, disenrollees  with no prior  HMO experience  were  1.5 to 3 times as likely 
to perceive  longer  waits in doctors  offices,  service restrictions  by primary  HMO doctors, 
the need for out-of-plan  care,  difficulty  with HMO payment  for emergency  care,  and 
trouble  with personal  care by their primary  HMO doctors  and the HMOS. 
Table  13:  Disenrollee  Perceptions  By I%or  HMO  Experience 
IMor  None 
Usually  waited  more  than an hour in office  before  seeing  their primary  9%  24% 
HMO doctors.  (459)  (4,069) 
Primary HMO doctor failed to provide Medicare covered services that  10%  25% 
were needed.  (526)  (4,258) 
11%  27% 
Sought  out-of-plan  care while  in the HMO.  (533)  (4,626) 
7%  17% 
HMO refused to pay for emergency care.  (338)  (2,834) 
Primary HMO doctor did not take their health complaints seriously all  62% 
to half the time.  ($0?)  (3,908) 
Holding down the cost of care was ~t  important to: 
17%  32% 
their primary HMO  doctor.  (866)  (5,458) 
26%  40% 
the HMO.  (1,303)  (6,614) 
The majority  of disenrollees,  both with and without prior  HMO experience,  joined  another 
HMO after leaving the sampled HMO,  but at different  rates.  Most disenrollees  (77%) 
15  were not HMO members  immediately  before joining  the sampled HMOS.  Those  with no 
prior  experience  came into the HMO from care in a doctors  office (73%) or in no regular 
place  (14 %).  By deftition,  all disenrollees  with prior  HMO experience  (23%) were 
members  of another  HMO immediately  before joining  the sampled HMO.  However,  a 
notably larger  proportion  of those with prior  HMO experience  (81%) than those without 
prior HMO experience (51 %) went onto  another HMO.  The remainder  of disenrollees 
without prior  HMO experience  turned  for care to a doctors  office  (32%),  a community 
clinic or health  center  (9%),  or a hospital emergency  room  (6%). 
The data do not explain the difference  between the two groups of disenrollees.  One 
possibility  is that beneficiaries  are seeking a certain  level of comfort  with a health care 
delivery  system.  A substantial portion  of disenrollees  who began in fee-for-service,  may 
try an HMO,  not like it conceptually  and return  to fee-for-service  settings.  Other 
disenrollees  may be at ease with the HMO concept  and/or  cost,  and try various  ones until 
they fmd a particular  one that meets their needs.  An appropriate  Ua  for firther  s~dy 
may be the extent to which the Medicare  population  can or will adapt to the HMO form of 
managed  care after extensive  experience  with fee-for-service.  Another  important  research 
question  is to learn  more about how able or willing HMOS are to accommodate  the special 
health care needs of an aging population. 
Sixteen percent  of enrollees  either planned  to leave their HMOS, or wanted to leave but 
felt  they could not. 
Eighty-four  percent  of enrollees  had no plans to leave their HMOS, but the remaining 
16%, an estimated  150,000 beneficiaries,  either planned  to leave or wanted to leave but 
felt they could not (see Table  14).  The plans of 2 % were predicated  on an anticipated 
move out of the HMOs  service area.  These would fall into the administrative  category 
discussed  in the next section.  Another  4 % planned  to leave for non-administrative 
reasons.  The final  10% wanted to leave but felt they could not, primarily  because  of the 
relative  affordability  of HMO care. 
Table  14: Enrollees  Future  HMO  Plans 
Number  Percent 
Planned  to leave  the HMO  because  of anticipated  move  22,317  2% 
Planned  to leave  the HMO  for other reasons  37,021  4% 
Wanted  to leave  the HMO,  but felt they couldnt  because:24  93,774  10% 
  HMO is the only way to afford all the health care needed  71,845  89% 
  Medicine is too expensive outside the HMO  67,634  86% 
F  Enrollee  cant afford non-HMO  doctors  66,220  83% 
  Enrollee  cant afford private health insurance  68,843  78% 
  Enrollee  isnt eligible for Medicaid  33,532  44% 
16  . 
-
. 
-*-
. . 
--- .- -.- --- - 
------ __ 
---
. . . . . . . . -----
I.--*  ---- .  .  .  .  .  .  .  .  .  !. 
--.  .>  1.1:  .1 
* 
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---- --------
  9  Enrollees  who had no plans to leave their HMOS tended to dominate  the data for all 
enrollees.  In some areas though,  enrollees  that planned  or wanted to leave differ from the 
main group  of enrollees  (see Figure  1).  While  not conclusive,  our data suggest that: a) 
enrollees  who planned  to leave appear  less well informed  about HMOS and more 
displeased  with service delivery,  and b) those who wanted to leave,  but couldnt  seem less 
healthy and compelled  to stay because of financial  considerations. 
Figure 1: Enrollees  who  planned  to remain  in their  HMOS  compared  to enrollees  who  planned  to leave 
and  to enrollees  who  wanted  to leave,  but  couldnt. 
Enrollees  Who  Plan  to Leave  Are:  Enrollees  Who  Want  to Leave  But  Cant 
Are: 
More Likelv  to:  More  Likely  to: 
h perceive  doctors  dont take their  w worry  about their health

complaints seriously  E report health questions at application

  wait more than 12 days for doctor  ~ wait more than 12 days for doctor

appointments  appointments 
  wait more than 1 hour in the doctors    wait more than 1 hour in the doctors 
office  office 
w say they hadnt been very sick  k not get quick appointments when they were 
  perceive doctors didnt provide all  very sick 
needed services    wait from 13 days to more than 20 days for 
  complain their doctors wouldnt  refer  an appointment with a specialist 
them to specialists  h report appointment lines were busy all to 
  not know what is most important to their  most of the time 
doctors or their HMOS 
  seek out-of-plan care 
Less Likely to:  Less Liielv  to: 
  report good to excellent health when they  b report good to excellent health when they 
joined  the HMO and now  joined  the HMO and now 
  be filly  informed about HMO lock-in  b say they hadn t been very sick 
w have received services while an HMO    believe giving the best me&cal care 
member  possible is most important to their 
b believe giving the best medical care  HMO 
possible is most important to their    say their health improved due to their HMO 
doctors and HMOS  care 
Almost  one-third  of disenroUees left solely for  administr~ve  reasons; the remainder 
voiced more criticism  of their HMO expenence. 
Responses  from the 29% of disenrollees  who left their HMOS for administrative 
reasons25 tended to dilute the criticism  of other disenrollees.  Administrative  reasons 
refer to business or procedural  actions rather  than to beneficiary  choice.  Table  15 shows 
17  non-administmtive  disenrollees  were substantially  more negative  than administrative 
disenrollees  regarding  their experience  with appeal rights,  effectiveness  of HMO care, 
waiting time for appointments,  and personal  treatment  received  from the primary  HMO 
doctor and the HMO.  It also illustrates  the moderating  effect that the responses  from 
administrative  disenrollees  have on the disenrollee  data as a whole. 
Table  15:  Admhistrative  and  Non-AMinistrative  Dkenrolhnents 
All  Admin.  Non-Adrnk. 
Disenrollees  Dkenrollees  Dkenrollees 
Would have appealed HMOs  refusal to provide/pay  43%  22%  55% 
for services if had known about rights.  (2,603)  (474)  (2,129) 
32%  42%  26% 
HMO did not refuse to paylprovide  for services  (1,917)  (886)  (1,031) 
Medical care received through the HMO caused their 
health to: 
21?%  12%  25% 
b  become worse  (4,365)  (721)  (3,642) 
33%  52%  25% 
  improve  (6,747)  (3,153)  (3,593) 
Usually waited more than an hour in the office  before  22%  14%  25% 
seeing their primary HMO doctors.  (4,369)  (811)  (3,557) 
Usually waited 13 to more than 20 days for  27%  19%  31% 
appointment with specialist.  (4,092)  (848)  (3,244) 
Primary HMO doctor did not take health complaints  36%  26%  40% 
seriously.  (7,288)  (1,549)  (5,740) 
Holding down the cost of care was most important to: 
26%  8%  34% 
  Pri~rY  HMO doctor  (5,445)  (463)  (4,982) 
34%  14%  42% 
  the HMO  (6,928)  (818)  (6, 110) 
REASONS  FOR  LEAVING  AN HMO

Both disenrollees  and enrollees  provided  their reasons for leaving an HMO.  Their

personal  preferences  in a health care delivery  system and their perceptions  of access to

services through  the HMO constituted  two non-administrative  categories  of reasons for

leaving  (see Table  16).  As previously  mentioned,  29% of disenrollees  mentioned

administrative  reasons ,26 such as moving out of the HMO  service area  (25%),  their

HMOS no longer participating  as a Medicare  risk HMO or in their companies  retirement

plan  (6%),  or involuntary  disenrollments  such as late premium  payments  or clerical  error

(3%).  Eighteen percent  of disenrollees  left for administrative  reasons ~;  7% left for

administrative  reasons fwst, but would have left anyway for other reasons.27

Disenrollees  citing administrative  reasons only are not included  in the following  analysis.

18  Enrollees  described  disenrollment  reasons because they either planned  to leave their 
HMOS or wanted to leave,  but felt they could not (see Table  14). 
Before a detailed  discussion  of beneficiaries  reasons for leaving an HMO,  a summary of 
the overall pattern  is helpful.  Five reasons  for leaving an HMO were the most frequently 
given and were among those rated  most important  by both disenrollees  and enrollees  (see 
Table  16).28  Both groups: 
  didnt like the choice of primary  HMO providers;

F  believed premiums  and/or  co-payments  were too expensive;

b  wanted to use the doctors they had before they joined  the HMO;

F  were not allowed to see the specialists they believed  they needed to see;

b  were refused,  by their primary  HMO doctors,  services they believed they

needed. 
Ten items represented  the most important  disenrollment  reasons for 79% of disenrollees;  8 
items represented  them for 81% of enrollees.  While disenrollees  most important  reasons 
for leaving  were divided between personal  preferences  and perceived  access problems, 
enrollees  reasons for planning/wanting  to leave were predominantly  personal  preferences. 
Both groups perceived  problems  with service access,  but disenrollees  seemed to feel a 
greater  impact  on their health as a result,  i.e.,  they were getting  sicker. 
HMO restrictions  on providers  and services, plus  high beneficial  expenses,  were the 
leading disenrollment  reasons based on personal preferences for  health  care delivery. 
Within the personal  preference  category,  enrollees  and disenrollees  most frequently  cited 
discomfort  with the HMO restrictions  on providers  and services,  plus high beneficiary 
premiums/co-payments,  as reasons  for leaving an HMO.  Among the top four reasons for 
both groups were: 
F  not likingthe choice of primary HMO doctors, 
F  theirpremiums  and/or co-payments were too expensive,	
  a dislikeof going through the primary  HMO doctor to get medical  services,

b  a desire to use the doctor the beneficiary  had before joining  the HMO.

The most frequent  choice for disenrollees  (44% - choice of primary  HMO doctors) and 
enrollees  (37 % - going through  the primary  HMO doctor for services) clearly  stood out, 
but the other ranked  reasons are less differentiated.  Also among disenrollees  top four 
reasons  was wanting to use another  hospital  (23%).  Personal preferences  regarding  the 
physical  aspects of HMOS were chosen by a small percentage  of beneficiaries  -- difficulty 
getting to the HMO  (6%),  not liking the HMO building  (2%),  and not liking the HMOs 
location  (5%).  Encouragement  of friends  or family to leave was, in fact,  a more frequent 
choice  (7%) than these. 
19  Table  16:  Reasons  for  Leaving  by Disenrollw  and EIWOlleeSWho  Plan/Want to L(xw#9 
Disenrollees  Enrollees 
Frequency  Most  Frequency  Most 
(Rank)  Imoortant  (Rank)  Important 
Didnt like the choice of primary HMO doctors.  44%  (1)  10% (2)  28%(2)  15%(2) 
(91,73)  (1,650)  (47,060)  (14,309)
Premium andlor co-payments were too  29%  (2)  20%  (1)  25%  (4)  18% (1) 
expensive.  (5,895)  (3,221)  (39,140)  (17,087) 
Didnt like going through the primary HMO  23% (3)  *  37% (1)  5% (6) 
doctor to get medical services.  (4,639)  (59,332)  (4,986) 
Wanted to use another hospital.  23%  (3)  7%  (4)  12% (7)  * 
(4,709)  (1,122)  (16,996) 
Wanted to use the doctor beneficiary had before  22%  (4)  7%  (4)  27% (3)  14% (3) 
(s)he joined  the HMO.  (4,576)  (1,192)  (42,095)  (12,930) 
Couldnt see the same primary HMO doctor  16% (5)  *  17% (6)  10% (5) 
every time.  (3,331)  (26,970)  (9,508) 
Primary HMO doctor left the HMO.  14% (6)  5%  (5)  10%  (8)  * 
(2,833)  (751)  (15,951) 
HMO  services changed.  14% (6)  *  18% (5)  4%  (7) 
(2,914)  (27,946)  (3,479) 
Friend or relative encouraged beneficiary to  13%(7)  *  7% (9)  * 
leave.  (2,646)  (10,580) 
Had to wait too long for scheduled  22%  (1)  5%  (5)  15% (3)  *
appointments.  (4,291)  (747)  (20,355) 
Not allowed to see specialists needed.  21%  (2)  8% (3)  19% (1)  11%(4) 
(3,956)  (1,338)  (26,265)  (10,318) 
Had to wait too long at the office  to see the  19% (3)  *  11% (4)  * 
doctor.  (3,631)  (14,765) 
Was getting sicker because of the care reeeived  19% (3)  7% (4)  4% (7)  * 
through the HMO.  (3,663)  (1,145)  (5,471) 
Couldnt get services fast enough when very  19% (3)  5% (5)  11% (4)  * 
sick.  (3,530)  (871)  (14,136) 
Making appointments by telephone was too  16%(4)  *  8% (6)  * 
difficult.  (3,055)  (11,367) 
Primary HMO doctor refused to provide needed  15% (5)  5%  (5)  16% (2)  4% (7) 
services.  (2,946)  (885)  (21,368)  (4,022) 
Couldnt see primary HMO doctor or specialist  14% (6)  *  9% (5)  * 
as often as needed.  (2,670)  (12,557) 
Too  many of needed medical services are not  8%  (7)  *  9%  (5)  * 
covered.  (1,569)  (12,965)  Difficulties  with timely  appointments  and restricted prima~  and specialty  care were the 
top disenrollment  reasons retied  to service access. 
Perceived  access problems,  as reasons for leaving,  showed some differences  between 
disenrollees  and enrollees  as well as some similarities.  A telling distinction  was 19% 
(rank 3) of  disenrollees  repofied  they left because of getting  sicker as a result  of the care 
received  through  the HMO compared  to only 4% (rank 7) of enrollees.  However,  four 
reasons were listed among the top five by both groups: 
  waiting too long for scheduled appointments,

F  not being allowed to see the necessary  specialists,

E  waiting too long at the office to see the doctor,  and

F  being unable to get services fast enough when they were  very sick.

Disenrollees  were  1.5 to 2 times as likely as enrollees  to choose the reasons of long office 
waits and lack of fast service  when very sick.  Sixteen percent  (rank 2) of enrollees  cited, 
as a reason for leaving,  their primary  HMO doctors  refhsals to provide  needed  services. 
Fifteen percent  of disenrollees  also chose doctors refusals to provide  services,  but, 
because  of greater  concerns  they had in other areas,  this reason  only ranks fifth for them. 
Choice of primary  HMO doctors and high beneficiary  expenses  were the two most 
important  overall disenrollment  reasons for  enrollees  and disenrollees;  the two groups 
d~fered  on other most impotiant  reasons. 
Disenrollees  varied  more in selecting their one most important  reason for leaving  an 
HMO,  while enrollees  chose fewer reasons,  predominantly  from the personal  preference 
category.  Both groups chose the same four reasons for leaving  (rank  1 to 4) as their one 
most important  reason: 
F  not liking the choice of primary  HMO doctors,

b  premiums  and/or  co-payments  that were too expensive,

  a desire to use the doctor the beneficiary  had before joining  the HMO,  and

  not being allowed to see the necessary  specialists.

The first three reasons reflect personal  preferences,  i.e.,  discomfort  with the HMO way of 
providing  care and financial  concerns  of the beneficiaries;  the fourth,  perceived  problems 
with access to services.  Also at rank 4 (7%) among the most important  reasons  were 
disenrollees  wanting  to use another  hospital and saying they were getting  sicker because 
of the care received  through  the HMO.  Of the other most important  reasons  for leaving 
an HMO,  disenrollees  cited three perceived  access problems  (long waits for scheduled 
appointments,  no quick appointments  when very sick, and primary  HMO doctors  refusing 
to provide  services) and one personal  preference  concerning  a primary  HMO doctor  (all 
rank 5).  Enrollees,  on the other hand,  cited the reverse  -- three personal  preference 
reasons (rank 5 to 7) and one perceived access problem  (also rank 7). 
21  While beneficiaries  mayidentify  high premiums/co-payments  asareasonforl~vkg,  the 
reason may really be high expenses in combination  with other areas of dissatisfaction.  A 
recently published  study32 of Medicare  risk HMOS reported  that more than 90% of both 
HMO enrollees  and fee-for-service  beneficiaries  rated various  dimensions  of their care33 
as good or excellent.  On virtually  every dimension  examined  except cost,  however, 
enrollees  were  significantly  less likely than non-enrollees  to rate their care as excellent. 
Yet, these same enrollees  were much more likely to rate their  satisfaction  with out-of 
pocket costs as excellent  and identifkxl  signillcantly  fewer instances  of needing various 
types of health care for which they did not have coverage.  The study concludes  that 
Most enrollees  ... seemed to feel that HMOS lower costs and wider set of benefits more 
than compensated  for their lower level of satisfaction  with care received.   When applied 
to our data,  this finding may mean that as beneficiaries  perceive  HMO costs are too 
expensive,  they may become less willing to tolerate  other features  of HMO  care that they 
do not like. 
22
 RECOMMENDATIONS 
As the health care reform  debate continues  and a means to control health care costs is 
sought, the HMO form of managed care has received  increased  attention.  To provide 
further  information  for the ongoing debate and to assist HCFA  in its management  of 
Medicare  risk HMOS, we present  these conclusions  based on our survey results. 
As discussed,  beneficiary  responses  indicate  Medicare  risk HMOS provided  adequate 
service access for most beneficiaries  who had joined.  However,  our survey results  also 
indicate  some serious problems  with enrollment  procedures  and service access that we 
believe  require  HCFAs  attention.  Our intent here,  and in subsequent reports  based on 
the same survey data,  is not to prescribe  speciilc corrective  actions.  Instead,  we want to 
identify for HCFA,  based on information  from beneficiaries,  areas of the Medicare  risk 
HMO program  apparently  needing improvement  and to suggest techniques  HCFA  can use 
to further  monitor  these areas. 
Three  items need immediate  exploration: 
Beneficiaries  should  be better  informed  about  their  appeal  rights  as required 
b	
by  Federal  standards.  Fully 25% of beneficiaries  did not know they could appeal 
their HMOS refusals to provide  or pay for services.  We believe knowl~ge  of 
appeal rights is an extremely  important  issue when viewed in combination  with 
lock-in to the HMOS and the fact that  12% of all HMO beneficiaries  perceived 
their primary  HMO doctors  did not take their health complaints  seriously. 
F	 Service  access  problems  reported  by  disabled/ESRD  beneficiaries  need  to be 
carefully  examined,  as they  are  an  especially  vulnerable  group.  Moreover,  the 
problems  cited in their  survey responses parallel  February  1994 Congressional 
testimony  regarding  HMO care of the disabled.34 
F	 Medicare  risk  HMOS  should  be  monitored  for  inappropriate  screening  of 
beneficiaries  health  status  at application.  More than 2 of 5 beneficiaries,  who 
could remember,  said they were asked at application  about their health problems. 
A recently  published  study35 of Medicare  risk HMOS found that these plans 
attract  healthier-than-average  beneficiaries.  While the study concludes t~s 
appears to be due primarily  to self-selection  of enrollees,  since HMOS must enroll 
an interested  Medicare  beneficiary,  our data suggest the possibility  of health 
screening  and selective  enrollment  by HMOS, as an alternate  explanation. 
Several other beneficiary-reported  issues of access to services through  HMOS merit 
examination  by HCFA  in the near future for possible  cause and resolution.  The access 
issues concern: 
Routine  Appointments  -- Some beneficiaries  reported  having difficulty making 
b	
appointments  for services in terms of the days waited for scheduled appointments, 
23  apparently  without regard  to their health status.  Others  said they sometimes  gave 
up trying  to make appointments  because  of consistently  busy telephone  lines. 
Health  Maintenance  -- Some beneficiaries  reported  being unable to see their 
b	
primary  HMO doctors  within  1 or 2 days when they felt they were very  sick. 
Some also believed  their HMO medical  care caused their health to worsen. 
	 Refusal  of Services  -- Some beneficiaries  reported  they were refised  referrals  to 
specialists,  payments  to a doctor or hospital for emergency  care,  or Medicare 
covered  services  because the HMO purportedly  did not cover them. 
Based on our experience  with this survey,  we suggest consideration  of three items as 
HCFA  conducts field tests of its survey instrument  for disenrolling  HMO beneficiaries. 
F	 Allow  disenrollees  to communicate  as many  reasons  for  leaving  the  HMO as 
are  applicable  to their  situation.  Confiig  a beneficiary  to only one reason  may 
mask underlying  problems  of which HCFA  needs to be aware. 
	 Distinguish  between  administrative  and  non-administrative  disenrollments. 
Because  of the major differences  between  administrative  and non-administrative 
disenrollees,  it appears  advisable to treat them separately  when monitoring 
managed  care  settings.  Also,  if disenrollrnent  rates are to be a performance 
indicator,  HCFA  may want to exclude administmtive  disenrollments  or treat them 
separately. 
Conduct  these  exit  surveys  by  mail  with  computer  generated  forms,  either 
E	
exclusively  or in  conjunction  with  other  methods.  In this way,  as the GHP or 
other data base is updated  with disenrollment  information,  HCFA  could routinely 
and systematically  collect information  from all or a portion  of disenrollees. 
Additional  Office  of Inspector  General  Work 
Other Inspector  General  reports,  either in progress  or planned,  are also intended to assist 
HCFA  in its examination  and management  of HMO issues.  From  this survey data we 
plan to complete  an HMO level report  showing the distribution,  frequency  and 
characteristics  of HMOS relative  to the enrollment  and access issues reported  by 
beneficiaries.  We also plan to produce  a report  that explores  the value and use of 
disenrollment  rates as an HMO performance  indicator  and that analyzes the most 
significant reasons  for beneficiary  disenrollments.  Other subjects of future HMO reports 
are a determination  of how physicians  and beneficiaries  view their relationship  in an HMO 
setting and how well Medicare  beneficiaries  enrolled  in HMOS understand  their appeal 
rights and have them protected. 
24
 AGENCY  COMMENTS 
We received  comments  from the Health  Care Financing  Administration  (HCFA) and the 
Assistant Secretary  for Planning  and Evaluation  (ASPE).  The fill  text of their comments 
is in Appendix E. 
Health  Care  Financing  Administration 
HCFA  concurred  with the reports  recommendations.  However,  it noted an apparent 
inconsistency  between  sections of this report  and our Summary  Report  on the same subject 
(OEI 06-91-00736)  that discuss personal  treatment  of beneficiaries  by their HMOS or 
primary  HMO doctors.  The finding is that 39% of dkenrollees  and 12% of enrollees 
believed  their primary  HMO doctors  dld not take their health complaints  seriously.  Of 
these beneficiaries,  44% of disenrollees  and 36% of enrollees  said they encountered  this 
attitude  most to all of the time.  We have amended the Summary Report  to clarify this 
finding. 
Assistant  Secretary  for  Planning  and  Evaluation 
ASPE was concerned  that our using beneficiary  reported  data only did not present  a 
complete  picture  of Medicare  risk HMO operations,  and thus,  did not put the report 
findings in perspective.  ASPE suggests that the report  should include  comparative  data 
from HCFA  monitotig  and other research,  and an examination  of the HMO plans 
brochures  and the Medicare Handbook to determine  what information  is available  to 
beneficiaries. 
Our primary  purpose  for conducting  the beneficia~  survey was to develop another tool 
HCFA  could use to monitor  HMO performance  through  systematic  beneficiary  feedback. 
Further,  our studys scope was narrowly  focused on beneficiaries  perceived  access to 
services  only,  as opposed to beneficiary  satisfaction  or quaMy of care.  We had previously 
considered  including  more discussion of other available  information  to provide  context for 
beneficiary  responses,  as ASPE suggests.  However,  we chose not to largely  because  such 
discussions  would have over-extended  an already  lengthy report.  Instead,  we cautioned 
readers  about the nature and limitations  of the data presented,  and included  the 
bibliography  for those interested  in more detail. 
We believe  that beneficiary  reported  information  is a valuable  indicator  of where the 
Medicare  risk HMO program  is working  well,  or in need of improvement,  For example, 
25% of beneficiaries  reported  that they did not know they had appeal rights.  As ASPE 
notes, HCFA  has taken  steps to make beneficiaries  aware of these rights,  e.g.  review  of 
marketing  materials  and distribution  of the Medicare Handbook.  Nevertheless,  the 
beneficiaries  themselves,  the primary  users of that information,  have indicated  that the 
message isnt getting through. 
25
 We agree that further  exploration of our findings and recommendations  is needed before 
final action is taken.  For example,  our recommendation  for the disabled/ERSD  population 
is that HCFA  should carefully  examine the reported  access problems.  Part of this 
examination  would include,  as ASPE suggests,  reviewing  data from other  sources (such as 
HCFAs  own monitoring  efforts) to determine  the extent to which such other  sources 
similarly  identify this as a problem  area. 
All things considered,  though,  we believe that the three problem  areas we identifkd 
deserve  further  examination. 
26
 ENDNOTES

1.	 Medicare  Managed  Care Contract  Report,  July  1, 1994, prepared  by Office of 
Managed  Care,  HCFA. 
2.	 Penchanskyj  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. 
3.  The Penchansky  and Thomas  five dimensions  of access to services  are: 
a.  Avaikzbili~ - the relationship  of the volume and type of existing  services 
(and resources)  to the clients 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 clients 
ability to accommodate  to these factors  and the clients perception  of their 
appropriateness. 
d.  Affordability - The relationship  of prices  of services and the providers 
insurance  (or deposit requirements)  to clients 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 
practicecharacteristics  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. 
4.	 Actually,  91 HMOS had risk contracts  when the sample was drawn;  however,  4 
HMOS did not have any Medicare  enrollees  during  1991 and 1992. 
5.  Disenrollments  for reasons other than the beneficiarys  death. 
27
 6.  Of the 45 HMOS, the model types were 9 group HMOS, 6 staff HMOS, and 30 
individual practice  associations  (IPA) from 22 States.  The distribution  of the 
model types among the strata were:  Group -2  group HMOS in Strata  1, 4 in 
Strata 2, and 2 in Strata 3; &&f  -2  staff HMOs  in Strata  1, 1 in Strata 2, and 3 in 
Strata 3; ~A  -10  IPAs in Strata  1, 10 in Strata 2, and 10 in Strata 3. 
7.  All sampled beneficiaries  received  a survey in English;  409 also received  one in 
Spanish. 
8.  Surveys  were usable if beneficiaries  answered  a minimum  set of questions  or were 
willing to complete  the minimum  set by telephone.  All usable  surveys had 
responses  for enrollment  status as of the samples timeframe,  receipt  of services 
from the sampled HMO,  and plans/reasons  for leaving the HMO.  In addition,  if 
beneficiaries  had received  HMO services,  their  surveys had to include 5 additional 
responses  about their HMO experience  from any of the surveys  sections.  We 
made  143 follow-up telephone  calls to beneficiaries  whose surveys were potentially 
usable if we could complete/clarify  enrollment  status and other key questions. 
9.  Using weighted data,  the response  rate is 74% overall,  75% for enrollees  and 58% 
for disenrollees.  (See Appendix  A.) 
10.  For example,  suppose 25% of disenrollees  answered  yes to a particular  question 
while 50% of enrollees  answered  yes.  The interpretation  would be that enrollees 
were twice as likely as disenrollees  to respond  yes (i.e.,  50% enrollees  vs. 25% 
disenrollees).  However,  because  of the disproportionate  distribution  of enrollees 
and disenrollees,  this difference  does not necessarily  indicate  significant  statistical 
differences  between the groups. 
11.  Determined  disabled in accordance  with the Medicare  deftition. 
12.  Beneficiaries  could select more than one serious condition. 
13.  To calculate  the approximate  N for each cell in the Tables,  divide the number  in 
parentheses  by the percent  above it. 
14.  The Table below  shows that the beneficiaries  who have had 1 or more  serious 
illnesses,  e.g.,  heart attack,  cancer,  pneumonia,  are more likely to be admitted to 
the hospital and to have higher  numbers  of doctor visits in a year.  This 
information  combined  with the data in Table 3 suggest that beneficiaries  perceived 
propensity  to use services is influenced  by their health  status, i.e.,  the sicker they 
are,  the more likely to use services,  and their need for the services  is real. 
28
 Service  Use  by Beneficiaries  with  Serious  Illnesses 
Disenrollees  Enrollees 
None  1 or more  None  1 or more 
1 to 6 ~  pli~  HMO 
doctor or specialist visits in the  83%  65%  81%  62% 
last year.  (10,792)  (3,747)  (420,228)  (165,902) 
7 or more ml  primary HMO 
doctor or specialist visits in last  17%  35%  19%  38% 
year.  (2,207)  (2,039)  (97,689)  (103,180) 
Was admitted  to hospital  while  29%  74%  34%  79% 
member  of sampled  HMO.  (4,804)  (5, 170)  (215,812)  (239,100) 
15.  Freeborn,  Donald,  Clyde Pope,  and Bentson McFarland,  Consistently  High and 
Low Elderly  Users of Medical  Care:  Executive  Summary,  Center  for Health 
Research,  Kaiser Permanence,  Northwest  Region,  NCHSR  Grant No. HS 05316-
02, March,  1988. 
16.  A composite  score calculated  for items 3 and 4 in Table 6. 
17.  An additional  concern  is that these indicators  are based only on responses  from 
beneficiaries  who did enroll in an HMO.  We cannot know,  for this study, the 
experience  of those who considered  HMO membership,  but did not enroll. 
18.  Thirty-nine  percent  (N= 1906) of disenrollees  who had 1 or more  serious illnesses 
waited from  13 to more than 20 days for a scheduled appointment  with a specialist 
compared  to 22%  (N =2390)  of disenrollees  who had no serious illnesses.  There 
were no differences  among enrollees  for this. 
19.  See this Reports  section on analysis of sub-groups for more details on these 
beneficiaries. 
20.  Projected  numbers  of 3,138  and 8,158 enrollees  respectively  also had perceived 
this direct  encouragement  to leave the HMO. 
21.  Some literature  indicates this attitude toward the older patient  is a problem 
generally  and is not necessarily  confiied  to one particular  care  setting. 
22.  The column does not total  100% as a small portion  of beneficiaries  answered  that 
both cost of care and giving the best medical care were most important. 
23.  Disabled/ESRD  disenrollees  also seem to be disproportionately  represented  in their 
stratum.  In the entire  sample and in the enrollee  stratum,  the weighted proportion 
of disabled/ESRD  beneficiaries  is 3 %.  Disabled/ESRD  disenrollees  account for 
8% of their  stratum. 
29
 24.  Percents  are the proportion  of all enrollees  who want to leave their HMOS but feel

they cant.

25.  Administrative  reasons  for leaving  included  moving out of the HMO  service area,

HMOS no longer participating  as a Medicare  risk HMO or in the companies

retirement  plan,  and involuntary  disenrolhnents  such as late premium  payments  or

clerical  error.

26.  Disenrollees  could select more than  1 reason.

27.  The remaining  4% of disenrollees  did not say whether  or not they left for

administrative  reasons  only.

28.  When discussing  the most frequently  mentioned  or the most important  reasons for

leaving an HMO,  we rank them in descending  order by percents.  If two or more

reasons  have the same percents,  they also have the same rank.  Thus,  for example,

the top 4 items,  by rank,  in a category  may actually  be more than 4 reasons.

29.  Frequency  is ranked  within each of the 2 categories  of reasons for leaving
 --
personal  preferences  and access to services.  The most important  reason  for leaving

is mnked  among M  the reasons  of both categories.  Reasons marked  with an

asterisk  were mentioned  frequently  within their categories,  but were not among the

most important  reasons.

30.  Personal  preference  options chosen by too few beneficiaries  to include  were:  1) 
getting to the HMO is too difficult,  2) I dont like the HMO building,  3) I dont 
like where the HMO is located. 
31.  Access to services  options chosen by too few beneficiaries  to include were:  1) I am 
not allowed to go to the hospital when I need to, 2) the HMO wont approve 
Medicare  covered  services that my primary  HMO doctor  wants me to have,  3) my 
primary  HMO doctor,  his staff or HMO office staff have encouraged  me to leave, 
4) prescription  drugs are not covered. 
32.  Brown,  Randall  S.,  Dolores  Clement,  Jerrold  Hill,  Sheldon Retchin,  and Jeanette 
Bergeron,  Do Health Maintenance  Organizations  Work for Medicare?  Health 
CareFinuncingReview, Fall  1993,  15:1:7-23. 
33.  Measures  of the care process  (for example,  explanations  given by their physicians 
or attention  they received  as a patient),  the structure  of care  (ease of obtaining 
care,  waiting times,  and ease of seeing the physician  of their choice),  and the 
perceived  quality and outcomes  of care  (thoroughness  of examinations  and overall 
results of care received). 
34.  Before the House Select Subcommittee  on Education  and Civil Rights by a 
representative  from the National  Council on Independent  Living.  Medicare and 
Medicaid Guide, No. 789, Commerce  Clearing House,  February  17, 1994, p.  5. 
30
 35.  Brown,  Randall  S.,  et al.,  Fall,  1993. 
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36