Managed Care Digest Series®

Key Findings

Medicare Industry Summary

The total number of Medicare beneficiaries receiving their benefits from Medicare Advantage (MA) plans jumped more than 20% in 2007, to 8.7 million from 7.2 million the previous year.
At year-end 2007, 19.9% of the 43.6 million Medicare beneficiaries in the U.S. were enrolled in MA plans. Since 2005 (14.0%), MA penetration into Medicare has grown by nearly six percentage points.
For the first time since this Digest began tracking this measure, more than half (227 of 443, or 51.2%) of all HMOs operating in the U.S. enrolled Medicare beneficiaries, up notably from 43.5% (195 of 448) in 2006. Enrollment in these plans rose 11.6% over this time, to 6.2 million from 5.5 million in 2006, the highest such total since 2000 (6.7 million).
After three consecutive years in which the average length of stay (ALOS) per Medicare hospital admission held steady at 5.7 days, this measure increased 5.3% in 2007, to 6.0 days. This growth occurred at HMOs in all three membership size categories.
HMOs that enrolled Medicare beneficiaries averaged 39.4 specialists per 1,000 HMO members in 2007, up 5.9% from 37.2 the year before, the fifth consecutive annual rise.
The percentage of Medicare HMOs that allowed their members to choose between brand name and generic drugs was 87.2% in 2007, up more than eight percentage points from 79.0% the previous year.
Between January 2007 (78.4%) and January 2008 (85.0%), the overall percentage of Medicare beneficiaries with some form of creditable prescription drug coverage grew nearly seven percentage points.

Medicaid Industry Summary

For the first time since this Digest began tracking this measure, the total number of Medicaid recipients enrolled in managed care organizations (MCOs) fell, to 28.5 million in 2007 from 28.9 million in 2006.
Of these Medicaid recipients enrolled in MCOs nationwide in 2007, 19.5 million (68.4%) were in HMOs, up notably from 18.4 million (63.6%) in 2006.
The average number of physician encounters per Medicaid HMO member was 4.1 in 2007, up 10.8% from 3.7 in 2006.Medicaid HMOs with fewer than 5,000 members experienced the most dramatic percentage growth in this measure, to 3.1 from 2.6 in 2006, or 19.2%.
In 2007, Medicaid HMOs with 18,000 or more members averaged 12.2 primary care physicians (PCPs) per 1,000 Medicaid members, down 12.9% from 14.0 in 2006. By comparison, Medicaid HMOs with 5,000 to 17,999 members staffed a notably higher 23.2 PCPs per 1,000 Medicaid members, up considerably from 19.0 in 2006.
Of hospital patients diagnosed with a drug dependence in 2007, a notable 40.4% were Medicaid recipients, down slightly from 41.2% in 2006, but still the highest percentage of the 19 common diagnoses listed.
For the second consecutive year, the Medicaid patient share of all patients undergoing ophthalmologic and otologic procedures at hospitals grew, to 33.9% in 2007 from 31.6% in 2006 and from 29.5% in 2005, the highest share of the 19 common hospital procedures profiled.
The number of prescriptions per member per year (PMPY) at HMOs that enrolled Medicaid recipients increased 5.6% in 2007, to 9.4 from 8.9 the previous year.
Of all Medicaid HMOs using formularies, 47.9% used proprietary (self-developed) formularies as the controlling document in 2007, down from 51.2% in 2006. Conversely, Medicaid formularies were the controlling document at 35.0% of Medicaid HMOs, up more than seven percentage points from 27.4% the previous year.

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US.NMH.10.01.016 Last Update: August 2010