Medicare Advantage Quality of Care Surpasses Traditional Medicare

December 10, 2020 - Medicare Advantage quality of care exceeded traditional Medicare, particularly in preventive care, a recent Better Medicare Alliance study revealed.

“The hallmark features of Medicare Advantage—risk-adjusted capitated payment, strong value-based performance incentives, and flexibility in benefit design—enable health plans to offer care management interventions that meet complex care needs of vulnerable beneficiaries in ways that produce robust positive outcomes and greater value for high need, high cost beneficiaries,” the report stated.

The researchers analyzed encounter data along with Medicare Part A and Part B claims and Part D drug event data for almost 1.5 million Medicare Advantage beneficiaries and over 7.9 million traditional FFS Medicare beneficiaries. The time period for the data was 2015 to 2017.

Specifically, the report compared six categories of traditional Medicare and Medicare Advantage beneficiaries: those with major complex chronic conditions, the frail elderly, those under 65 with disabilities including end-stage renal disease, those with minor complex chronic conditions, those with simple chronic conditions, and those who are healthy.

Researchers discovered gaps between Medicare Advantage quality of care and traditional Medicare quality of care and attributed Medicare Advantage’s success to superior care management.

Quality of care

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The report observed 22 clinical quality of care measures to compare outcomes between Medicare Advantage and fee-for-service Medicare.

For 77 percent of the clinical quality of care measures (17 of the 22 measures), Medicare Advantage populations achieved better results.

Medicare Advantage populations were more likely to use preventive care services such as vaccinations and mental health screenings.

For example, almost three-quarters of Medicare Advantage beneficiaries with major complex chronic conditions (74 percent) and 71 percent of the frail elderly Medicare Advantage beneficiaries got their pneumonia vaccine. Traditional Medicare beneficiaries lagged behind by over 20 percentage points (49 percent and 48 percent, respectively).

Medicare Advantage beneficiaries were also more likely to receive influenza vaccinations, screenings for depression, substance abuse care, and prostate cancer or mammogram screenings.

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For some measures, Medicare Advantage and Medicare beneficiaries saw similar results, specifically colonoscopies, cholesterol screenings, and disease-modifying antirheumatic drug therapies.

And on one measure, Medicare Advantage beneficiaries were less likely to receive preventive care: statin therapy for those with cardiovascular disease.

However, preventive care is just one measure of quality of care. The report also observed hospitalizations, follow-up care, and prescription drug management. In most of these measures, Medicare Advantage populations emerged with better quality of care.

For example, Medicare Advantage members were less likely than traditional Medicare beneficiaries to receive a prescription for a high-risk drug. They were also less likely to go to the hospital unnecessarily due to preventable complications and more likely to visit with a physician within two weeks of discharge.

Healthcare spending, utilization

Healthcare spending was often lower in Medicare Advantage than in traditional Medicare.

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This is partially driven by lower hospitalization rates. For certain beneficiary populations, the inpatient healthcare spending for Medicare Advantage could be as much as 23 percent lower than costs for traditional Medicare.

This syncs with previous research, which has revealed that Medicare Advantage beneficiaries pay one-seventh of what traditional Medicare beneficiaries pay for hospital stays.

However, Medicare Advantage did not perform as well as traditional Medicare when it came to hospital outpatient costs, with healthcare spending as much as 14 percent higher than traditional Medicare.

"Lower hospital inpatient costs more than offset higher hospital outpatient costs in Medicare Advantage, resulting in combined Medicare Advantage costs being lower compared to traditional FFS Medicare for all high-need, high-cost populations,” the researchers found.

When it came to emergency room utilization, results were split.

While Medicare Advantage beneficiaries under the age of 65 and those with major complex chance conditions had similar utilization rates as traditional Medicare beneficiaries, Medicare Advantage frail elderly members had 40 percent higher emergency room utilization than traditional Medicare beneficiaries.

Emergency room costs were higher for Medicare Advantage beneficiaries—from 11 to 36 percent higher. This was not a result of utilization, since overall Medicare Advantage beneficiaries only use the emergency room four percent more often than traditional Medicare beneficiaries.

“Medicare Advantage costs for primary care (physician services and lab tests) were substantially higher than traditional FFS Medicare for high-need, high-cost beneficiaries,” the report added.

Medicare Advantage members with major complex chronic conditions faced 41 percent higher costs compared to their traditional Medicare counterparts.

However, costs for specialty care were 10 percent lower in Medicare Advantage overall and 19 percent lower for Medicare Advantage beneficiaries with major complex chronic conditions as opposed to traditional Medicare beneficiaries with similar conditions.

In post-acute care, costs tended to align with utilization, leaving traditional Medicare beneficiaries with generally higher healthcare spending in this area.

Meanwhile, for skilled nursing facilities, Medicare Advantage populations overall accrued 17 percent higher healthcare spending for skilled nursing care than traditional Medicare.

Past research has identified that Medicare Advantage members tend to have lower quality skilled nursing facilities, which may also contribute to discrepancies in home healthcare quality.

“Rates of facility-based care vary greatly in traditional FFS Medicare and do not necessarily translate to better outcomes,” the report noted.

“The lower rates of post-acute care observed in this study suggest that care management techniques in Medicare Advantage may have shifted care patterns of high-need high-cost beneficiaries toward primary care – a pattern that research shows improves quality of care and cost outcomes.”

When it came to prescription drug utilization, Medicare Advantage and traditional Medicare beneficiaries tended to have the same utilization levels. Prescription drug coverage is one of the drivers for why Medicare-eligible beneficiaries select Medicare Advantage health plans, a recent survey discovered.

Durable medical equipment costs for high-cost, high need beneficiaries varied based on the beneficiaries’ population. The frail elderly Medicare Advantage beneficiaries saw the highest healthcare spending. They spent 69 percent more than their traditional Medicare counterparts.

In the overall matched population, spending on durable medical equipment was 27 percent higher in Medicare Advantage than in traditional Medicare.

The results indicated that while Medicare Advantage plans are performing strongly on quality of care and preventive care for high-need, high-cost populations, they could improve costs and utilization for some of their beneficiary populations. Medicare Advantage care management strategies appear to be effective at controlling healthcare spending for high-cost populations.