Study Finds Medicare Advantage Plan Enrollees Have Fewer Avoidable Hospitalizations Compared to Traditional Medicare Beneficiaries

FOR IMMEDIATE RELEASE: Tuesday, March 15, 2016


Leslie Champlin
Senior Public Relations Strategist
(800) 274-2237, Ext. 5224

WASHINGTON, DC — Research by the Robert Graham Center on behalf of the Better Medicare Alliance may help settle the debate over the impact of Medicare Advantage plans on reducing avoidable hospitalizations among beneficiaries.

The research, “Understanding the Impact of Medicare Advantage on Hospitalization Rates: A 12-state Study( page PDF),” found that Medicare Advantage patients were 10 percent less likely to have avoidable hospitalizations than traditional fee-for-service Medicare enrollees.

“We looked at the rates of three types of inpatient care,” said Graham Center Research Director Stephen Petterson, PhD. “The three were avoidable hospitalizations, which could have been prevented by better outpatient care; marker condition hospitalizations, which are for conditions such as appendicitis or heart attack that would not be prevented by better outpatient care; and referral-sensitive hospitalizations, which are planned in an effort to prevent worse outcomes. We compared the rates for Medicare Advantage beneficiaries and traditional Medicare enrollees.”

The analysis found that Medicare Advantage enrollees were less likely than traditional Medicare beneficiaries to have an avoidable hospitalization, a finding that is consistent with other research results. It also showed a greater number of referral-sensitive hospitalization rates — which are a marker for better outpatient care — for Medicare Advantage patients.

Moreover, the study found a “spill-over” effect occurred among traditional Medicare patients who lived in counties with a greater number of beneficiaries enrolled in Medicare Advantage plans.

“At the physician level, having an increasing proportion of one’s panel covered under a different payment model such as MA would plausibly influence a physician’s practice style and in turn, affect all patients treated by that physician,” said Andrew Bazemore MD, MPH, director of the Graham Center. “Finally, at the ecologic level, entry of a managed care plan into an area could lead to more competition, which could drive down prices.”

In lieu of enrolling in traditional Medicare, beneficiaries can enroll in any of several Medicare Advantage plans offered by private insurers who receive a risk-adjusted per-person, per-month payment. Medicare Advantage proponents say plan enrollees have fewer avoidable hospitalizations because the plans successfully manage chronic conditions and focus on preventive and primary care services. Opponents say these outcomes reflect enrollment of people who are healthier at the outset and thus require fewer services.

Petterson, Bazemore and their colleagues set out to shed additional light on the discussion by updating previous analyses of the impact of Medicare Advantage plans on avoidable hospitalizations. They gathered the most recently available hospitalization data from the Healthcare Cost and Utilization Project for the 12 states from which complete data were available. They then compared avoidable hospitalization rates and marker hospitalization rates of Medicare Advantage and traditional Medicare enrollees.

Their finding that Medicare Advantage enrollees were significantly less likely than traditional Medicare beneficiaries to have avoidable hospitalization rates held steady, even after controlling for age, gender, race or ethnicity, region, severity of illness and other factors related to health. The study helped resolve questions over whether the impact of Medicare Advantage plans reflected self-selection of healthy enrollees or whether it reflected successful care management, a focus on preventive services and primary care among plan users.

“Under Medicare Advantage, the emphasis on primary care, care coordination, disease management, and supportive services pays real dividends,” said Allyson Y. Schwartz, president and CEO of the Better Medicare Alliance. “In the effort to reform Medicare, Medicare Advantage is moving us in the right direction.”


About the Robert Graham Center

The Robert Graham Center for Policy Studies in Family Medicine and Primary Care works to improve individual and population health by enhancing the delivery of primary care. The Center staff generates and analyzes evidence that brings a family medicine and primary care perspective to health policy deliberations at local, state, and national levels.

Founded in 1999, the Robert Graham Center is an independent research unit affiliated with the American Academy of Family Physicians (AAFP). The information and opinions contained in research from the Center do not necessarily reflect the views or policy of the AAFP.