Health Care Utilization and Spending in Medicare Advantage vs Traditional Medicare

Abstract

IMPORTANCEMedicare Advantage (MA) has entailed a major expansion of government-financed, privately administered health insurance in the US. As policy makers consider options to expand Medicare further, it is informative to compare the performance of traditional Medicare (TM) and MA. OBJECTIVE To assess whether MA is associated with differential changes in health care utilization and spending for beneficiaries entering Medicare from commercial insurance compared with beneficiaries entering TM. DESIGN, SETTING, AND PARTICIPANTS This retrospective cohort study with a difference-indifferences analysis and propensity score matching compared health care utilization and spending between beneficiaries enrolling in MA and beneficiaries enrolling in TM with a Medicare Supplement plan 1 year before vs 1 year after their initial Medicare enrollment. Participants included beneficiaries aged 65 to 70 years who remained enrolled with a large insurer when transitioning from commercial insurance to Medicare between June 2018 and December 2018. Data were analyzed from February 2020 to October 2021. MAIN OUTCOMES AND MEASURESUse of, and spending on, institutional (Part A) and professional (Part B) medical services, measured as overall spending per member per month, and as rates of services per thousand members per year, including inpatient stays, inpatient days, physician visits, and injectable drug administrations. RESULTS Among 1082 matched beneficiaries (541 joining MA, 541 joining TM with a Supplement plan), 585 (54.1%) were female, and the mean (SD) age at Medicare enrollment was 66 (1.4) years.Prior to Medicare enrollment, there was no statistically significant difference in outcome trends between the MA and TM groups. The first year of MA enrollment was associated with a differential reduction in institutional (Part A

What Will Cuts to Medicare Advantage Payments Do to Enrollment?

“…3 Using data from 2008 to 2019, the authors found that not only were ACA-related benchmark cuts not associated with lower MA enrollment, but also that enrollment grew in a way seemingly unrelated to the ACA cuts. 3 They assessed a natural experiment in benchmark changes, where some counties were affected more than others because of how the law was written, not because of benchmark changes possibly associated with factors more susceptible to confounding. Using a difference-in-differences strategy, they showed that counties with larger payment cuts did not exhibit differential changes in enrollment relative to counties with smaller payment cuts.…”

Evaluation of Potentially Avoidable Acute Care Utilization Among Patients Insured by Medicare Advantage vs Traditional Medicare

“…Overall, further research is needed to elucidate how these patterns affect long-term patient clinical trajectories, and ultimately clarify whether the potential cost efficiencies of site shifting are occurring alongside tradeoffs in care quality.The findings of this study add to a growing body of literature that evaluates utilization and quality-of-care between Medicare Advantage and traditional Medicare patients. Other prior work6,[9][10][11] has also found fewer hospitalizations for ACSCs in the Medicare Advantage program. Our study findings broaden the literature by observing greater use of ED direct discharges and observation stays for the same ACSCs among Medicare Advantage vs traditional Medicare patients at a national level, which may be the principal reason for lower use of hospitalizations with Medicare Advantage.…”

“…2 However, it is unclear whether there are fewer potentially avoidable hospitalizations associated with Medicare Advantage compared with traditional Medicare. Prior studies have had mixed results 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 or have been limited by narrow geographic scopes 7 , 10 and have relied on data collected before the release of Medicare Advantage encounter data. 7 , 8 , 9 , 10 , 11 , 12…”

“…2 However, it is unclear whether there are fewer potentially avoidable hospitalizations associated with Medicare Advantage compared with traditional Medicare. Prior studies have had mixed results [3][4][5][6][7][8][9][10][11][12] or have been limited by narrow geographic scopes 7,10 and have relied on data collected before the release of Medicare Advantage encounter data. [7][8][9][10][11][12] Furthermore, emerging evidence has raised concerns that a reduction in hospitalizations may be an artifact of shifting sites of acute care (eg, observation stays, direct discharges from the emergency department [ED]), rather than an advantage of delivering better care in the ambulatory setting.…”

Comparison of Care Quality Metrics in 2-Sided Risk Medicare Advantage vs Fee-for-Service Medicare Programs

“…A chief criticism was that the Medicare Advantage risk-adjusted coding system results in significant overpayment because of risk score inflation. 2 To study whether or not the improved care efficiency under Medicare Advantage is an artifact of the risk adjustment model, a retrospective study 9 looked at 2 populations of beneficiaries, 1 enrolled in Medicare Advantage and 1 in FFS Medicare, 1 year before and 1 year after they transitioned from commercial to Medicare enrollment in the 2020-2021 calendar years. The effect of coding intensity in the Medicare Advantage population was eliminated by using the diagnosis codes available for both cohorts while they were enrolled in commercial health plans.…”