reports

Comparing the costs and use of services in TRICARE Prime with employer sponsored insurance

Orlando, FL, USA: AcademyHealth Annual Research Meeting.

NORC at the University of Chicago, Bethesda, MD, USA

RESEARCH OBJECTIVE: The objectives are: to compare the cost and use of medical services of TRICARE Prime beneficiaries assigned to a Military Primary Care Manager (PCM) with beneficiaries assigned to a Civilian PCM; to determine if beneficiaries that use a combination of Direct and Purchased services incur higher expenses because they are sicker, or because of greater resource use and higher charges per-unit of service; and to provide evidence based findings to policymakers tasked with adjusting future Department of Defense health care budgets.

STUDY DESIGN: TRICARE Prime is a managed health care benefit for active and retired U.S. military. The analysis is based on a 5% sample of TRICARE administrative data for FY2006-FY2008 and is built around a comparison of beneficiaries receiving care at a military treatment facility (Direct Care Only), a civilian provider (Purchased Care Only), or a combination of both (Purchased Care Light and Purchased Care Heavy). Each Purchased Care sample was propensity score matched with Direct Care Only. Episodes of care were constructed using the Thomson Reuters MEG grouper, and case-mix and risk-adjustment scores were constructed using the Johns Hopkins ACG system. The study entailed descriptive and multivariate analysis.

POPULATION STUDIED: Population includes TRICARE Prime beneficiary sponsors under age 65 and their dependents residing in the U.S. who were continuously enrolled in FY2007. Eighty-four percent were assigned a Military PCM all 12 months while 10% were assigned a Civilian PCM; the remainder switched PCM assignment during the year.

PRINCIPAL FINDINGS: Beneficiaries assigned a Civilian PCM incur 58% greater overall expenses and 51 % greater outpatient expenses per capita. Similarly, these same beneficiaries have 66% more outpatient visits and 16% more episodes of care. However, while the cost per episode is 37% greater for beneficiaries assigned a Civilian PCM, the cost per outpatient visit is 9% less. Holding other characteristics constant, beneficiaries assigned a Civilian PCM incur greater adjusted expenses regardless of acuity level, and as acuity scores increase the relative difference in per capita adjusted expenses flatten out at 32%; this difference increases to 77% when beneficiaries stay within their assigned systems. For beneficiaries using a combination of services, the volume of use for most procedures and the volume of hospitalizations for most diagnoses are greater in Purchased Care. The cost per use or per hospitalization, however, is greater in Direct Care. Further, their relative acuity based on ACG case-mix is significantly greater than beneficiaries receiving Direct or Purchased Care Only.

CONCLUSIONS: Civilian PCM beneficiaries have greater acuity, have greater use per capita, and tend to incur greater expenses per capita. Beneficiaries migrating between the Military and Civilian health systems tend to incur the greatest per capita expenses. These expenses are driven more by volume of use and acuity level in the Civilian system than by cost for services. Implications for Policy, Delivery, or Practice: Findings suggest that improved medical management (e.g., referral system or utilization management) in both military and civilian sectors and the exploration of changes to patient cost-sharing might produce greater efficiencies for the TRICARE health system.