December 7, 2006

Medical Trading Areas

Presented by Tom McRae

December 7, 2006

PURPOSE OF REVIEW

• Propose potential boundaries for Medical Trading Areas (MTAs)

• Provide underlying Medicaid paid claims data (summarized at county level) so others can analyze as well

December 7, 2006

REVIEW CRITERIA

• Review period is calendar year 2005

• Only Fee-For-Service (FFS) paid claims are reviewed – no HMO data

• Pharmacy and dental claims are excluded

• Elderly and Disabled Waiver claims are excluded

• Nursing home residents are excluded

December 7, 2006

CY 2005 TRANSACTION VOLUMES

• 20.7 million FFS transactions included in review• Managed Care (HMO) transactions (46 million)

are not included in review• Pharmacy (14.6 million), HMO capitation

payments (11.5 million), claims for nursing home residents (5 million), FFS dental (4.1 million), and Elderly and Disabled waiver payments (0.7 million) are not included in this review

December 7, 2006

STARTING POINTS• Michigan counties, rather than cities or zip

codes, are used as basic units of aggregation

• Each region (MTA) should have a population of at least 500,000 persons

• Each region is to be centered around a metropolitan area

• The Upper Peninsula (UP) and Northern Michigan are treated as distinct regions

December 7, 2006

NINE POTENTIAL MTAs

• Wayne - 4.4 million residents• Kent – 1.5 million• Washtenaw – 0.8 million• Kalamazoo – 0.8 million• Saginaw – 0.7 million• Genesee – 0.6 million• Northern Michigan – 0.5 million• Ingham – 0.5 million• Upper Peninsula – 0.3 million

December 7, 2006

December 7, 2006

“SPLIT” COUNTIES

• There are a limited number of counties where residents receive significant portions of their services from two different regions:

• Sanilac – Saginaw / Wayne regions• Barry – Kent / Kalamazoo regions• Shiawassee – Genesee / Ingham regions• Arenac – Saginaw / N. Michigan regions• Zip code analysis may shed light on where this

“split” occurs

December 7, 2006

SOUTHEAST MICHIGAN

• Wayne, Oakland, Macomb, St. Clair, and Monroe counties were initially analyzed as a single MTA

• A second analysis treated Wayne, Oakland, and Macomb counties as three separate and distinct trading areas

• This second analysis showed that Oakland county draws beneficiaries from Macomb, and to a lesser extent, Wayne county

December 7, 2006

WAYNE, OAKLAND, MACOMB BENEFICIARIES AND WHERE THEY TRAVEL TO RECEIVE

SERVICES

• Wayne – 81% in Wayne, 12% to Oakland, 3% to Macomb

• Oakland – 72% in Oakland, 13% to Macomb, 10% to Wayne

• Macomb – 53% in Macomb, 27% to Oakland, 17% to Wayne

December 7, 2006

BENEFICIARY versus PROVIDER PATTERNS

• Based on beneficiaries’ county of residence, where do beneficiaries go to receive medical care?

• Based on the providers’ county location, where do providers draw their patients from?

• Which counties draw patients from outside their own county?

December 7, 2006

IN-MIGRATION

• Among the large, urbanized counties, Washtenaw and Oakland county providers perform more than half their services for out-of-county residents

• In northern Michigan, Emmet, Alpena, and Grand Traverse county providers render more than half their services for beneficiaries from outside their own county

December 7, 2006

DIFFERING IN-MIGRATION PATTERNS

• OAKLAND• Medical Supplies –

33%• Physician services –

31%• Outpt. Hospital – 14%• Independent Lab –

13%• Inpt. Hospital – 5%

• WASHTENAW• Outpt. Hospital – 41%• Physician Services –

35%• Inpt. Hospital – 14%• Medical Supplies –

7%• Independent Lab - 0%

December 7, 2006

OUT-MIGRATION

• Most residents in the northern lower Michigan counties receive most of their services outside their own county

• Residents in rural counties adjacent to urbanized counties receive most services in the nearby urban county

December 7, 2006

STAYING HOME

• Residents of the largest counties (with the exception of Macomb) receive 70% or more of their services within their own county.

• Wayne County – 81%• Oakland County – 72% • Kent County – 90%• Genesee County – 86%• Ingham County – 90%• Macomb County – 53%• Muskegon County – 81%• Saginaw County – 74%

December 7, 2006

COUNTIES AND OUT OF STATE PROVIDERS

• Counties with the largest % of services rendered by out-of-state providers are:

• Menominee – 37%

• Monroe – 11%

• Gogebic – 9%

December 7, 2006

SUMMARY

• Medicaid beneficiaries in the largest populated counties tend to receive services in their own county

• Northern Michigan region has three “hubs” which draw patients from across the region

• Macomb, Oakland, and Wayne counties are ‘inter-related” in that order

• There may be 4 to 6 counties where splitting between two MTAs may be warranted.