Traditional Medicare not only doesn’t measure up to Medicare Advantage (MA) when it comes to cutting back on utilization, it also falls short in many ways compared to commercial insurance for those under 65, according to a new analysis.
A white paper by Harvard Medical School and Inovalon Harvard Medical School and Inovalon, which provides cloud-based healthcare data aggregation services, looks at enrollment data from 2015 through 2019. Researchers found that MA enrollees have more than 50% fewer inpatient hospital stays than fee-for-service Medicare enrollees.
In addition, MA members visited emergency departments 22% fewer times than those enrolled in traditional Medicare.
While people who enrolled in MA plans saw stable utilization in the first two years, those who enrolled in fee-for-service Medicare instead saw utilization increase by 35%, according to the report.
Describing fee-for-service Medicare as a “glaring outlier,” the white paper also said that “while patients generally use more care as they age, it is unlikely that the sudden spike in costs reflects FFS beneficiaries suddenly getting dramatically sicker following their 65th birthday. It is also unlikely that the spike reflects strategic delays to care, given that this would produce a transient spike, rather than the sustained and growing one we see.”
The higher utilization among fee-for-service beneficiaries seems to be caused largely by inpatient care, which doubles as patients switch from commercial plans to traditional Medicare coverage. Compared to traditional Medicare, MA provides comparable primary and routine care with 7% fewer visits to a primary care provider, according to the report.
Prescription drug use is similar, but overall costs for MA beneficiaries are 12% lower than fee-for-service beneficiaries with similar ailments even after adjusting for socioeconomic, beneficiary and clinical differences.
The white paper said that “FFS lacks basic and valuable features common to most private health plans, such as active patient management and care coordination. While there have been efforts to introduce more cost and quality incentives into FFS, such as the rollout of accountable care organizations (ACOs), our findings suggest that these efforts did not go far enough and that additional reforms are needed.”
Boris Vabson, Ph.D., health economist at Harvard Medical School and a lead researcher on the project, said in a press release accompanying the white paper that “our research credibly and definitively measures the efficacy of MA relative to FFS and indicates that the MA program is making healthcare more efficient without sacrificing quality of care for patients.”
Researchers used Inovalon’s data set, which covers about 30% of the insured population in any given year and includes pharmacy and medical claims for MA plans, traditional Medicare, Managed Medicaid, Affordable Care Act plans and employer-sponsored health insurance plans.
Christie Teigland, Ph.D., vice president of research science and advanced analytics at Inovalon, said in the press release that “our study demonstrates how active care management and preventive care offered under MA is helping beneficiaries better manage their health in cost-effective ways. This data and other insights from our findings offer the industry a glimpse into the strategies that are working to meaningfully improve healthcare, including the health of the most disadvantaged elderly beneficiaries.”