Health maintenance organizations might not remain centers for low-cost medical care if patients continue to shun traditional surgery in favor of high-tech treatments, according to a recent study by University researchers.
HMO costs have remained stable in recent years. However, the researchers found that burgeoning costs stemmed from the growing use of new technology, causing HMO budgets to rise at the same rate as traditional plans.
"A lot of people did think that HMOs could cut costs in the long run because they were less expensive than non-HMOs, and probably more efficient," said School of Public Health Prof. Michael Chernew, head of the study. "However, health care costs are rising at the same rate in both places."
Chernew emphasized that HMOs, which frequently adopt a more cost-conscious approach in treating patients, remain a relatively low-cost means of providing health care.
"HMOs are still less costly than any alternative, but they haven't addressed the problem of utilizing new technologies," Chernew said.
For the study, the researchers recorded the use of laparoscopic cholecystectomy - an advanced procedure to remove the gall bladder with minimal scarring - among HMO and non-HMO centers in Pennsylvania, Maryland and Connecticut between 1989 and 1994.
The laparoscopic procedure was chosen because it is representative of several similar treatments used in recent years.
During the five-year period, increased demand for the laparoscopic procedure caused HMO costs to rise just as fast as traditional insurers.
"We wanted to see if the HMOs could sustain the growth of the new procedure," said Richard Hirth, assistant professor of economics and health management and policy. "It's a type of procedure where there is a strong patient demand for it and there is no financial reason not to get it for the people involved in HMOs."
But Hirth said the extensive use of such high-tech treatments can eliminate potential benefits for patients through increased insurance premiums.
"We want to access all of these new technologies, but if we use them frequently when it's unnecessary, people aren't going to benefit that much from them," Hirth said.
Chernew emphasized the difficulty in balancing financial and health concerns when determining the appropriate treatment for patients.
While the health care debate has ebbed since the defeat of the Clinton administration's proposed reforms, Chernew said the discussion should be taken up again soon because of spiraling costs.
"There is a tradeoff between utilization of care and money," Chernew said. "I think we should be conscious of the challenges that the health care system faces in cutting costs in the long run."