More Evidence on Benefits of Medicare Advantage

While ideological opponents continue to do everything they can to eliminate Medicare Advantage, the research evidence continues to show benefits from the program over traditional fee-for-service Medicare.   (NBER Paper)   To avoid selection bias issues which might result from unobservably healthier beneficiaries enrolling in Medicare Advantage, the authors used a feature of Medicare Advantage payments that gives higher reimbursement to plans in counties with populations over 250,000 as a basis for analysis.  While it is generally unquestioned that Medicare pays Medicare Advantage more for a particular beneficiary than that beneficiary would cost in traditional Medicare, that is an intentional political decision that Congress made.  Whether or not more is actually spent on their care is a different question, as is the issue of comparative quality.  At this point, there appears to be accumulating evidence that quality is better in Medicare Advantage plans.  And there is more evidence than not that there is lower utilization, particularly of low-value services, in the Medicare Advantage plans.  The authors try to extend these analyses by finding a way to eliminate unknown variables between the Medicare Advantage and fee-for-service populations.  They compared outcomes from beneficiaries in counties with populations from 100,000 to 249,999 to counties with populations from 250,000 to 400,000 persons.  They incorporate beneficiary and country characteristics into their analysis.  The larger, higher Medicare Advantage reimbursement counties have more Medicare Advantage enrollment, as might be expected.  After all the adjustments, the analysis shows over a 20% reduction in hospital admissions for Medicare Advantage, along with lower mortality, demonstrating once again that Medicare Advantage plans are likely delivering more appropriate care, usually with better outcomes.