Gatekeepers may not be essential to keep HMO costs down

December 03, 2001

Eliminating gatekeepers, the primary care physicians charged with controlling patient access to specialists, may not necessarily raise costs for health maintenance organizations, new study findings suggest.

Compared with fee-for-service insurance, which allows the greatest freedom of access to providers and procedures, HMOs generally have lower rates of hospitalization, testing and elective surgery. Many traditional HMOs use gatekeepers to keep costs down, but HMO plans without gatekeepers are gaining in popularity.

"Much recent growth in managed care enrollment has been in plans with open physician panels allowing patients relatively free access to providers, such as preferred provider organizations and point-of-service HMOs," says lead study author José J. Escarce, M.D., Ph.D., of the RAND Health Program in Santa Monica, CA.

To determine the role of gatekeepers in cost reduction, Escarce and colleagues compared two plan types offered by a Midwestern managed care organization: a traditional HMO and a point-of-service HMO.

"This is the first study to conduct a comprehensive analysis of spending in a point-of-service plan compared with a more traditional HMO that uses primary care gatekeepers," Escarce says. The researchers examined spending in categories including physician services, inpatient and outpatient hospital services and prescription drugs.

Costs were generally comparable between the gatekeeper HMO and the point-of-service HMO, except in one case: when Escarce and colleagues assessed the effect of a $10 co-payment for primary care physician visits, they found total medical care expenditures in the gatekeeper HMO were actually 7 percent higher than in the point-of-service plan.

"Contrary to our expectations, we found no evidence that medical care expenditures were higher in the point-of-service plan," Escarce says. The study results are published in the December issue of Health Services Research.

There are several possible explanations for these findings.

One possibility is that enrollees may make numerous visits to their primary care gatekeeper to get specialist referrals, increasing HMO expenditures. Another possibility is that the cost of monitoring primary care physicians and maintaining authorizations procedures in gatekeeper HMOs may offset savings from reductions in specialty care.

It is also possible that, because point-of-service enrollees choose their primary care physicians, they may be more likely to have a trust-based relationship with this individual and may be more likely turn to him or her for advice before seeking costly specialty care.

The gatekeeper HMO studied allowed all network primary care physicians to serve as gatekeepers. "The impact of gatekeeping may in part be determined by the criteria used to select gatekeepers," Escarce says.

In contrast, the point-of-service plan studied had a broad provider network, which may discourage enrollees from seeking more costly out-of-network care. "Reduced incentives to seek out-of-network providers may help to curb expenditures," Escarce says.

The researchers noted that as their survey was limited to one managed care organization in the Midwest, their findings may not apply across healthcare plans nationwide. "Future work is needed to determine whether these findings are consistent across a broader spectrum of plans and patient populations," Escarce concludes.
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This research was supported by a grant from the Agency for Health Care Policy and Research.

Health Services Research is the bimonthly peer-reviewed journal of the Academy for Health Services Research and Health Policy and is owned by Health Research and Educational Trust. For information about the journal, contact Alice Schaller at 510- 643-5439 or email alices@uclink4.berkeley.edu

Posted by the Center for the Advancement of Health http://www.cfah.org. For more research news and information, go to our special section devoted to health and behavior in the "Peer-Reviewed Journals" area of Eurekalert!, http://www.eurekalert.org/jrnls/cfah/. For information about the Center, call Ira Allen, iallen@cfah.org, 202-387-2829.

Center for Advancing Health

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