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Some Medicare Advantage Research

By June 21, 2023Commentary

A couple of interesting pieces of research on Medicare Advantage, the private health plan option that now enrolls over half of Medicare beneficiaries.  In the first, the researchers compared use of services and quality of care in Medicare Advantage versus fee-for-service Medicare.  The researchers looked at metrics in 2010 and 2017, a period when MA enrollment grew very rapidly.  Notwithstanding that growth, in both years the MA plans haad a better performance on quality measures and the performance improved over the time period.  The plans were also more efficient in appropriate use of services, with 30% lower ER visits, 30% fewer back surgeries (which are often ineffective), and 10% fewer knew and hip replacements.  The lower utilization is one reason MA plans make money, but the lower utilization is likely an effect of keeping beneficiaries in better health and finding alternative methods to treat problems.  (HA Article)

The second verifies a long-standing observation about Medicare Advantage–when a large percent of people in a geographic area are enrolled in that arm, providers in the area change practice patterns for traditional Medicare to fit more closely with those required by the MA plans.  In this case it was in regard to post-acute care–home health care and nursing home usage after a hospital stay.  These are typically services that are subject to abuse and overuse and health plans have become more efficient in utilizing them.  If the services were being cut too much you would expect to see patients’ conditions worsening and more hospital readmissions.  But there was no evidence this occurred.  (HA Article)

At some point the Medicare program needs to acknowledge reality and move everyone into MA plans, which likely would both save money and improve patients’ health.

Join the discussion 2 Comments

  • Dave says:

    I don’t have access to the publication so I can’t look at any of the details but it seems to me MA plans are more attractive to healthier people in general and that might be a confounding factor in the analysis.

    • Kevin Roche says:

      that argument has been made for as long as Medicare risk contracts have been around and has been thoroughly disproved.  First of all, this piece of research, as with most of them, is typically adjusted for age, sex and health status.  But more importantly, at this point MA is so large that it has to basically have a representative population, and in fact it now has a disproportionate share of poor and minority beneficiaries, who typically are in worse health.  The MA plans seek these beneficiaries out because they get paid more for them and have more opportunity to create savings

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