Hospitalizations in the Medicare Advantage Program

This study kind of misses the point of what the Medicare Advantage plans do.  They tend to more proactively manage a member’s health and spend more on preventative care, which reduces very expensive inpatient hospital care.  So MA members have lower rates of hospitalization, but when they are hospitalized it is usually for a truly serious issue.  Therefore you would expect that lengths of stay are somewhat longer and discharge may be to a more intensive post-acute care regime.  And that is in essence what this study finds.  But the report attempts to put this in the context of mis-use of prior authorization and abuse by MA plans.  That is simply garbage.  The study period was 2018 to 2022 (I never understand why people can’t get more current data, makes you suspicious.).  And the authors did not in any manner adjust their data for health status or demographic variables, which essentially makes the data worthless.

What the data does show is that MA plans have 192 hospital discharges per 1000 members in 2018, declining to 180 in 2022.  Traditional Medicare had 223 discharges in 2018, declining to 178 in 2022.  Is traditional Medicare denying people needed hospital stays by 2022?  No, what has happened is a large shift in the most ill and most expensive patients to MA.  These patients are sought by MA plans, contrary to the mis-information spread by those opposed to the program, because they get paid more for them and there is more opportunity to manage care effectively.  So traditional Medicare is left with a pool of healthier patients who don’t care as much about the supplemental benefits offered by MA plans.  This is consistent with length-of-stay numbers, since MA has longer ones, again consistent with hospital use only when unavoidable and for the most severe cases.

Within these hospital discharges, in 2018 MA had 401 discharges to a post-acute setting per 1000 discharges, which includes skilled nursing facilities, rehabilition hospitals and home health care.  That had dropped to 395 by 2022.  In traditional Medicare there were 338 discharges to a post-acute setting in 2018, rising to 357 by 2022.  So there actually has been almost no change in MA discharges to a post-acute setting, contrary to allegations.  And MA uses post-acute care more often than does traditional Medicare.  Among post-acute care settings, MA plans tend to use home health care more frequently than does traditional Medicare.  Most patients prefer to be in their homes.    (NORC Study)

Note that as usual, the group doing this study has an agenda, which is to bash MA.