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April 17, 1987

The Inevitable Failure of Cost-Containment Strategies

Author Affiliations

Tarrytown, NY

Tarrytown, NY

JAMA. 1987;257(15):2029. doi:10.1001/jama.1987.03390150045007

To the Editor.—  In the SPECIAL COMMUNICATION entitled "The Inevitable Failure of Current Cost-Containment Strategies: Why They Can Provide Only Temporary Relief" by Dr Schwartz,1 which appeared in the Jan 9,1987, issue of JAMA, the statement is made that, "at any given time, enrollees in HMOs spend less than patients receiving fee-for-service care, chiefly because they avoid 'unnecessary' admissions and thus use an average of 30% fewer hospital days per year than individuals in the fee-for-service sector."There is a very simple reason for this. Health maintenance organizations (HMOs) enroll healthier people and therefore HMO enrollees will use up fewer inpatient days. The HMOs in this area vigorously attempt to sign up full-time employees—in other words, people in good health—and their families. They do not enroll the retired, the disabled, and the unemployed. The HMO enrollees are a selected group that does not reflect the community experience as fee-for-service