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During the 1990s, growth in health care costs slowed considerably, helping to lessen the spending strain on business, government, and households. Although cost growth has slowed, the Federal Government continues to pay an ever-increasing share of the total health care bill. This article reviews important health care spending trends, and for the first time, provides separate estimates of the employer and employee share of the premium costs for employer-sponsored private health insurance. This article also highlights some of the emerging trends in the employer-sponsored insurance market, including managed care, cost-sharing, and employment shifts.

This DataView presents descriptive information on beneficiaries with disabilities in Medicare and Medicaid. Medicare data show that persons with disabilities have more functional limitations, poorer health status, lower incomes, and experience more barriers to health care than aged Medicare beneficiaries. Medicaid data reveal that significant growth in the Medicaid disabled population has led to the disabled outnumbering the Medicaid-eligible elderly. Additionally, Medicaid serves an increasingly younger disabled population and more persons with mental impairments.

We compared the health status of 863 health maintenance organization (HMO) enrollees with that of 4,576 non-enrollees, controlling for demographics and area of residence, using 1994 data from the Medicare Current Beneficiary Survey (MCBS). HMO respondents were less likely to report fair or poor health, functional impairment, or heart disease. Average predicted costs based on various health-status measures were substantially lower for HMO respondents than for respondents in fee-for-service (FFS) arrangements. The Medicare payment formula for HMOs does not adequately adjust for the better health and consequent lower expected costs of HMO enrollees. The addition of health-status measures would improvement payment accuracy and reduce average HMO payments significantly below current levels.

Medicare managed care enrollment growth points to the need to develop an approach for monitoring access to care for the increasing number of beneficiaries who use these arrangements. This article describes the issues to be addressed in designing a system for monitoring managed care plan enrollees' ability to obtain needed medical care on a timely basis. We review components of the monitoring approach used for traditional fee-for-service (FFS) Medicare, including the conceptual framework, data, measures, and subgroups targeted in monitoring efforts, and discuss the adaptation of that approach for monitoring access in Medicare managed care.

Managed care now serves 23 percent of the Medicaid population. With the shift to capitation, the fee-for-service (FFS) billing mechanism that has generated much of the administrative data used in policy planning and research no longer exists. This article provides an overview of the types of encounter data currently being required for plans and the problems and issues with providing and analyzing such data. It is based on a review of documentation and interviews with representatives of nine States and the Health Care Financing Administration (HCFA). The article concludes by providing recommendations for HCFA, States, and plans in creating and improving encounter data systems.

Variations in elderly Medicare beneficiaries' health service use are examined using a 100-percent sample of fee-for-service (FFS) claims data from Alabama, Iowa, and Maryland. Provider specialty, group practice type, practice size, and location are found to be significant factors affecting hospital and ambulatory care utilization and cost, after controlling for patient and regional characteristics. These results provide insights into utilization and cost expectations from different types of primary-care gatekeepers as the Medicare managed care market develops.

This article describes the use of utilization management (UM) methods by State Medicaid programs. The use of optional UM methods range from zero in one State to eight in four States, with a median of five. A majority of States have programs for ambulatory surgery, preadmission certification, lock-in, primary-care case management, and targeted case management. Overall, no UM method was judged by States to have an adverse effect on access of quality of care. For UM methods mandated by the Medicaid program, more than one-third of the States rated physician certification as minimally effective.

This overview discusses the importance of monitoring and evaluating the delivery of services under managed care, particularly with respect to assessing access and quality in managed care. It also lists recent Health Care Financing Administration (HCFA) initiatives in this area, and presents an introduction to the articles published in this issue of the Review. The topics addressed by these articles range from assessing and monitoring access and quality provided by traditional types of managed care organizations (MCOs) serving Medicare and Medicaid beneficiaries to issues that must be considered in developing and monitoring new delivery system models.

Rising Medicaid health expenditures have hastened the development of State managed care programs. Methods to monitor and improve health care under Medicaid are changing. Under fee-for-service (FFS), the primary concern was to avoid overutilization. Under managed care, it is to avoid underutilization. Quality enhancement thus moves from addressing inefficiency to addressing insufficiency of care. This article presents a case study of Virginia's redesign of Quality Assessment and Improvement (QA/I) for Medicaid, adapting the guidelines of the Quality Assurance Reform Initiative (QARI) of the Health Care Financing Administration (HCFA). The article concludes that redesigns should emphasize Continuous Quality Improvement (CQI) by all providers and of multi-faceted, population-based data.