Medicare Advantage Has Lower Healthcare Use, Higher Clinical Quality

April 04, 2023 - Healthcare utilization was lower in Medicare Advantage compared to traditional Medicare, but clinical quality performance was higher in the private program, a study published in Health Affairs found.

Researchers used data from 2010 to 2017 to compare quality and utilization measures in Medicare Advantage and traditional Medicare. The data came from CMS Healthcare Effectiveness Data and Information Set (HEDIS) measures, Medicare Parts A and B claims, the Medicare Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey, and the Medicare Beneficiary Summary File.

From 2010 to 2017, the number of Medicare Advantage health maintenance organizations (HMOs) fell from 279 to 261. However, the number of beneficiaries enrolled in HMOs rose from 5.1 million in 2010 to 8.3 million in 2017. The number of Medicare Advantage preferred provider organizations (PPOs) decreased from 123 in 2010 to 93 in 2017, but enrollment increased from 1.2 million to 3.3 million beneficiaries.

Performance on HEDIS clinical quality metrics was better in Medicare Advantage HMOs compared to traditional Medicare for all nine measures in both years, except for osteoporosis management in 2010.

Compared to 2010, the difference in quality between Medicare Advantage HMOs and traditional Medicare stayed the same or increased for seven measures in 2017.

For example, the performance difference between HMOs and traditional Medicare for breast cancer screening grew from 13.8 percentage points to 17.2 percentage points. The difference for diabetes retinal screening widened from 11.6 percentage points to 31.8 percentage points. Additionally, the difference in preventive care visits grew from 4.4 percentage points in 2010 to 6.2 percentage points in 2017.

Medicare Advantage PPO clinical quality performance was also better than traditional Medicare, but the differences were narrower than the differences between HMOs and traditional Medicare, the study noted.

Based on patient-reported measures, Medicare Advantage HMO performance improved from 2010 to 2017. Traditional Medicare performed better than HMOs on five of the seven measures in 2010, but HMOs outperformed traditional Medicare on these measures by 2017.

In 2010 and 2017, Medicare Advantage PPOs had equal or better performance on almost all patient-reported measures compared with traditional Medicare. In 2017, PPOs performed better on three of seven measures, while traditional Medicare performed better on one. There was no difference among the three remaining measures.

A larger share of traditional Medicare beneficiaries reported receiving influenza vaccinations in 2010 than Medicare Advantage beneficiaries, but this trend reversed in 2017.

Personal physician ratings were similar or higher for Medicare Advantage beneficiaries compared to traditional Medicare beneficiaries in both years, while specialist ratings were lower among HMO enrollees in both years and lower among PPO enrollees in 2017.

While clinical quality was typically higher in Medicare Advantage, the study found there was less healthcare utilization in the private program compared to traditional Medicare. However, there was slight variation.

In 2010, relative rates of cardiac catheterization were around 30 to 40 percent lower for Medicare Advantage beneficiaries than for traditional Medicare beneficiaries. These rates remained stable over time.

Similarly, the relative rates of elective hip and knee replacements (10 percent) and back surgery (30 percent) were lower in HMOs than in traditional Medicare in 2010, with the differences increasing over time.

Meanwhile, rates of coronary artery bypass grafting (CABG) surgery and percutaneous coronary intervention (PCI) were higher for Medicare Advantage beneficiaries compared to those in traditional Medicare in 2010. This difference narrowed over the study period, with PCI being more common in traditional Medicare than in HMOs by 2017.

Emergency department visits in 2010 were around 40 percent and 30 percent lower in Medicare Advantage HMOs and PPOs compared to traditional Medicare, with the differences narrowing over time. In both 2010 and 2017, outpatient and inpatient visits were lower in Medicare Advantage than in traditional Medicare.

The findings suggest that Medicare Advantage has succeeded with its payment system that incentivizes limited use of discretionary services, better patient experiences, and high-quality care.

Despite the benefits of this high-quality care, the Medicare Advantage program has a problem with overpayments, the study noted.

“As policymakers consider alternatives to address potential overpayments in Medicare Advantage, they should also consider the evidence that MA plans provide fewer services while also achieving equal or better quality performance relative to traditional Medicare on a broad array of measures,” the researchers concluded.