is covered. This makes new entry within the 50-50 requirement very difficult.12

HMOs with large numbers of Medicare beneficiaries are concentrated in a few geographic areas, a trend that is changing. Of the 10 percent of Medicare beneficiaries who have enrolled in managed care plans, more than 50 percent have been enrolled in risk-based HMOs in just two states, California and Florida. Another 11 percent are enrolled in HMOs in Arizona and New York. Within the total Medicare population, 16 percent reside in California and Florida combined and 8.5 percent live in New York and Arizona combined (unpublished data provided by the Office of the Actuary, Health Care Financing Administration, May 30, 1996).

The studies that have investigated how well vulnerable populations fare in managed care plans have produced mixed conclusions. Most of the discussion around this particular topic continues to take place in a "fact-free" environment.13

HMOs differ significantly in their ability to meet the needs of the elderly. Some do not differentiate between elderly and nonelderly enrollees in terms of service delivery. Others have implemented services specifically targeted toward seniors. These include screening for frailty, geriatric assessment, specialized case management, and enhanced primary care for long-term nursing home populations. Some managed care plans offer additional services and benefits not covered by traditional Medicare such as respite care, home inspections, physical adaptations for the home, relationships with community-based social service programs, support programs for people who are newly widowed, and group clinics for people with chronic illnesses.

Several studies have found that whereas overall satisfaction and outcomes for beneficiaries in fee-for-service plans and HMOs are similar, HMO enrollees appear to be relatively less satisfied with quality of care14 and physician-patient interactions and


Point made by Peter D. Fox.


Point made by Peter D. Fox.


The Institute of Medicine's 1991 report Medicare: New Directions in Quality Assurance defines quality of care as, "the degree to which health services for individuals and populations increase the likelihood of desired health outcomes and are consistent with current professional knowledge."

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