Effect of Managed Care on Preventable Hospitalization Rates in California

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Abstract
Hospitalization rates for ambulatory care-sensitive (ACS) conditions have emerged as a potential indicator of health care access and quality. The effect of managed care on reducing these potentially preventable hospitalizations is unknown. To ascertain whether increases in managed care penetration were associated with changes in hospitalization rates for ACS conditions. Longitudinal analysis between 1990 and 1997 of all California hospitalizations for ACS conditions aggregated to 394 small areas. Association of change in ACS hospitalization rate with change in managed care penetration. In unadjusted analysis there was no association between the change in managed care penetration and the change in hospitalization rates for ACS conditions over time. However, in a multivariate model that controlled for changes in area demographics and hospitalization rates for marker conditions that were assumed to be stable over time, the change in managed care penetration was negatively associated with a small but statistically significant change in the ACS hospitalization rate. Each 10-point increase in percentage private managed care penetration was associated with a 3.1% decrease in the ACS hospitalization rate (95% CI, −5.4% to −0.8%) Overall, in California, an increase in the penetration of private managed care in a community was associated with a decrease in ACS admission rates. Additional research is needed to determine if the observed association is causal, the mechanism of the effect and whether it represents an improvement in patients’ health outcomes.