Medicare Advantage Plans Help Keep Patients out of Hospital

Marcia Frellick

March 22, 2016

Medicare Advantage (MA) patients are 10% less likely to have avoidable hospitalizations than traditional fee-for-service Medicare (TM) enrollees, a new 12-state study shows.

That finding held steady, even after controlling for age, sex, race or ethnicity, region, severity of illness, and other health-related factors, report Stephen Petterson, PhD, and colleagues at the Robert Graham Center in Washington, DC, who performed on behalf of the Better Medicare Alliance.

"Under [MA], the emphasis on primary care, care coordination, disease management, and supportive services pays real dividends," Allyson Y. Schwartz, president and chief executive officer of the Better Medicare Alliance, said in a news release. "In the effort to reform Medicare, [MA] is moving us in the right direction."

In unadjusted analysis, "[f]or the 12 study states combined, there are 243.2 hospitalizations per 1,000 TM beneficiaries, which is 31% higher than the rate for MA beneficiaries (185.4 per 1,000); TM hospitalizations for marker conditions are 27% higher than those for MA beneficiaries," the authors write. "To the extent that the presence of marker conditions reflects the underlying health of TM and MA beneficiaries, these results are consistent with previous studies showing that MA beneficiaries are healthier than TM beneficiaries. At the same time, the difference in avoidable hospitalization rates is 40.2%, which is 9% higher than the difference in overall hospitalization rates and 13% higher than the difference in marker condition hospitalization rates."

In multivariate models, in which the analysis was restricted to marker and avoidable hospitalizations, the researchers estimate that MA enrollees have a 10% reduction in hospitalization risk (odd ratio [OR], 0.90; 95% confidence interval [CI], 0.89 - 0.92), compared with TM enrollees. In contrast, MA enrollees were more likely to have referral-sensitive hospitalizations, which is seen as an indicator of better outpatient care, compared with TM enrollees (OR, 1.06; 95% CI, 1.05 - 1.08).

Mixed Results From Previous Studies

The new findings are in agreement with previous studies, but the reasons for the apparent success of the MA plans has been debated. Proponents argue that there are fewer hospitalizations because of the focus on prevention, primary care, and good care management, and critics contend that it is a result of selection bias toward healthier individuals who need fewer services.

The authors acknowledge the previous evidence has been mixed: "A large study comparing MA enrollees and TM beneficiaries found that MA enrollment was concentrated in subpopulations with poorer health," they write. "Compared with TM beneficiaries, MA enrollees had lower education levels, were more likely to be African American or Hispanic, and had lower incomes. On the other hand, they reported better self-perceived health status, which may imply that they were generally healthier than TM beneficiaries." Other studies have had mixed results as well.

This study has several advantages, the authors say. One is that researchers divided the inpatient care into three groups. In addition to avoidable hospitalizations, which could have been prevented by better outpatient care, they looked at marker condition hospitalizations, which are for conditions such as appendicitis, hip fractures, or heart attack that better outpatient care would not have prevented, and referral-sensitive hospitalizations, which are planned to prevent worse outcomes.

One finding that argues against the criticism of selection bias is that the states studied had varied results, and several (Rhode Island, Oregon, and Massachusetts) stand out as having higher rates of avoidable hospitalizations for MA enrollees than for TM beneficiaries. In each of these states, other types of hospitalizations, including those for unavoidable conditions, are also more common among MA enrollees.

"This suggests that MA plans attract less healthy patients in these states," the authors write.

The researchers also used more recent Healthcare Cost and Utilization Project data from a greater number of states to estimate differences. The 12 states all had data that differentiated MA from TM and were "fairly representative of all 50 states and the District of Columbia," the researchers note.

MA was also linked with a positive "spillover effect" on TM beneficiaries, meaning counties with more MA penetration had fewer avoidable hospitalizations for both MA enrollees and TM beneficiaries, even after controlling for other factors.

The findings are particularly important in light of recent growth projections. The Congressional Budget Office last year predicted that "enrollment in MA and other group health plans will grow each year over the next decade and could reach 30 million patients — roughly 40% of Medicare beneficiaries — by 2025," the authors note.

Support for the research was provided by Better Medicare Alliance. Two of the authors are employees of the Robert Graham Center.

"Understanding the Impact of Medicare Advantage on Hospitalization Rates: A 12-State Study." Robert Graham Center. Published online March 15, 2016. Full text

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