The Effects of HMO Penetration on Preventable Hospitalizations

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Abstract
To examine the effects of health maintenance organization (HMO) penetration on preventable hospitalizations. Hospital inpatient discharge abstracts for 932 urban counties in 22 states from the Healthcare Cost and Utilization Project (HCUP) State Inpatient Databases (SID), hospital data from American Hospital Association (AHA) annual survey, and population characteristics and health care capacity data from Health Resources and Services Administration (HRSA) Area Resource File (ARF) for 1998. Preventable hospitalizations due to 14 ambulatory care sensitive conditions were identified using the Agency for Healthcare Research and Quality (AHRQ) Prevention Quality Indicators. Multiple regressions were used to determine the association between preventable hospitalizations and HMO penetration while controlling for demographic and socioeconomic characteristics and health care capacity of the counties. A 10 percent increase in HMO penetration was associated with a 3.8 percent decrease in preventable hospitalizations (95 percent confidence interval, 2.0 percent-5.6 percent). Advanced age, female gender, poor health, poverty, more hospital beds, and fewer primary care physicians per capita were significantly associated with more preventable hospitalizations. Our study suggests that HMO penetration has significant effects in reducing preventable hospitalizations due to some ambulatory care sensitive conditions.