Study objective: To determine the effect of the CHAMPUS Reform Initiative (CRI) on emergency department use and charges, and to ascertain whether any reductions were concentrated among repeat users of the FD, those with less serious ED diagnoses, or those with selected chronic medical conditions. Methods: Participants were approximately 1.2 million beneficiaries of the Civilian Health and Medical Program of Uniformed Services (CHAMPUS) residing within either 11 military hospital catchment areas in California and Hawaii ('demonstration areas') or 11 matched control areas in other parts of the United States. Under CRI, participants were offered a choice of the standard CHAMPUS indemnity plan, a Preferred Provider Organizationtype plan, or a network-model Health Maintenance Organization plan. Beneficiaries were encouraged to use alternatives to the ED for nonemergency conditions. Visits to civilian EDs during two 12-month periods, before and after institution of CRI, were compared. Results: Under CRI, the number of CHAMPUS ED visits decreased by approximately 40% relative to the control, and allowed charges fell by almost 50%. Relative reductions in ED use under CRI were seen among both frequent and infrequent users of the ED. ED case-mix severity increased modestly relative to control (+3.5% versus +.9%). ED use among patients with diabetes, hypertension, and asthma fell sharply in the demonstration areas (by 14% to 41%) but rose in control areas (by 4% to 9%). Conclusion: In one of the largest managed care demonstrations ever conducted, a nonintrusive use management program and improved access to outpatient care appeared to reduce ED use, allowed charges, and costs to the government. Reductions in ED use were concentrated to some extent among repeat users and patients with less severe illnesses and were effected without capitation of provider groups or strict gatekeeping requirements.
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