Research for Differences

The military and civilian health care systems, while distinctly different, share some concerns. These common concerns include the overutilization of inpatient care and the rising cost of medical care. Overutilization is of concern in the private sector for a number of reasons. First, insurance reduces the sensitivity of individuals to health care costs. As a result, people may use too much medical care. Cost sharing and cost containment programs tend to reduce this problem. Second, doctors may increase the use of medical services to increase their own profits and to shelter themselves from malpractice suits (i.e., defensive medicine). Cost containment programs - like concurrent review - help to reduce this incentive. Overutilization is also a concern in the military sector. Like the civilian sector, beneficiaries may use too much health care because insurance reduces the cost of care. In addition, the Department of Defense historically allocated resources to hospitals on the basis of past need. As a result, hospital commander had no financial incentive to curtain hospitalizations. This paper, which is part of a CNA self-initiated study, compares the inpatient use of nine military catchment areas to the civilian sector. The variables we study include: gender- and age-adjusted inpatient admission rate, and case-mix-adjusted length of inpatient hospital stay. Length of stay measures the intensity of treatment once a patient enters the hospital. The inpatient admission rate measures the likelihood of entering the h