The Effects of HMO Penetration on Preventable Hospitalizations


  • Chunliu Zhan,

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    • Address correspondence to Chunliu Zhan, M.D., Ph.D., Center for Quality Improvement and Patient Safety, Agency for Healthcare Research and Quality, 540 Gaither Road, Rockville, MD 20850. Marlene R. Miller, M.D., M.Sc., is with the Department of Pediatrics, Johns Hopkins University, Baltimore, MD. Herbert Wong, Ph.D., is with the Agency for Healthcare Research and Quality, Rockville, MD. Gregg S. Meyer, M.D., M.Sc., is with Massachusetts General Hospital, Boston.

  • Marlene R. Miller,

  • Herbert Wong,

  • Gregg S. Meyer

  • This paper does not represent the policy of either the Agency for Healthcare Research and Quality (AHRQ) or the U.S. Department of Health and Human Services (DHHS). The views expressed herein are those of the authors and no official endorsement by AHRQ or DHHS is intended or should be inferred.


Objective. To examine the effects of health maintenance organization (HMO) penetration on preventable hospitalizations.

Data Source. 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.

Methods. 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.

Principal Findings. 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.

Conclusions. Our study suggests that HMO penetration has significant effects in reducing preventable hospitalizations due to some ambulatory care sensitive conditions.