Recently, the Center for Innovation in Medicare Advantage paid Avalere Health to analyze the outcomes of care under Medicare Advantage plans compared to traditional Medicare. While the self-published report boasts many improvements in preventive and wellness care associated with Medicare Advantage plans, the picture of access to post-acute care and avoiding the ER may be less complimentary.

What is Medicare Advantage?

Most Americans have a choice between two models of Medicare benefits: traditional Medicare or Medicare Advantage plans. Medicare Advantage plans replace traditional Medicare benefits. These plans largely consist of health maintenance organizations (HMOs) and preferred provider organizations (PPOs) that restrict a consumer’s choice in healthcare providers and typically feature a more intensive pre-authorization process. They have become an important part of the Medicare landscape. The Congressional Budget Office forecasts 51% of all Medicare enrollees will be under Medicare Advantage plans by year 2030.

Past Reports on Coverage and Quality of Care Under Medicare Advantage Plans

These plans are much more available in urban and suburban areas, leaving traditional Medicare to cover rural America and territories. They also do not cover hospice care, but automatically transfer patients to traditional Medicare during this important period. They are connected with higher overhead and less revenue going to actual patient care. In university-based studies published in peer-reviewed journals, Medicare Advantage has been connected with lower home health availability (especially during cancer), less access to post-acute care such as skilled nursing facilities, lower quality home health and nursing home care, and less access to specialists.

On the other hand, many seniors prefer Medicare Advantage plans. A primary marketing strength of these plans is that they repackage benefits in ways that can save seniors in day-to-day costs. They also have the marketing advantage of spending money on advertising to win converts, while traditional Medicare does little in the way of marketing its advantages over Medicare Advantage plans.    

Medicare Advantage Beneficiaries Get More Wellness and Preventive Care

The recent report financed by the Center for Innovation in Medicare Advantage and conducted by Avalere Health shows a number of positive outcomes in terms of wellness and preventive medicine. Their study risk adjusted and compared the data of 1.5 million Medicare Advantage customers to 8 million traditional Medicare beneficiaries. Medicare Advantage customers proved far more likely to get pneumonia vaccinations, diabetes screenings during eye exams, depression screenings, and more outpatient visits in general.

Medicare Beneficiaries Get Less Post-Acute Care

The current report shows Medicare Advantage beneficiaries get 29% less skilled nursing facility care and 19% less home health. They receive 21% less inpatient rehabilitation. Most strikingly, Medicare Advantage customers get 49% less long-term acute care hospital days. On the other hand, Medicare Advantage spends 27% more on durable medical equipment per patient.

Outcomes of Medicare Advantage Care Versus Traditional Medicare

The current report may be the first of its kind to measure outcomes among matched cohorts comparing Medicare Advantage to Traditional Medicare. Outcome measures reported are avoidable hospitalization rates, rehospitalization rates, and emergency department (ED) visit rates.

Avoidable Hospitalizations

The report highlights that Medicare Advantage plans are associated with a dramatic decrease in avoidable hospitalizations – 51% by one measure. However, the categorization of “avoidable” may leave room for some subjectivity, and other data in the report undermines the avoidable hospitalization observation. For instance, Medicare Advantage customers are only 10% less likely to be hospitalized. Furthermore, hospitalization rates may be affected by preapproval processes from the insurance companies, and, therefore, may be one of the less comparable outcome measures offered.

Readmission Rates

Readmission rates refer to the likelihood a patient will have to go back to the hospital and be readmitted within 30 days of a hospital discharge. Authorities consider lower readmission rates to signify higher quality care. The report touts lower readmission rates associated with Medicare Advantage plans, an overall 5% difference. However, the between-group rates did not show large differences:

• Disabled <65 : 11.8% vs 12.0%
• Frail Elderly: 12.3% vs 12.6%
• Major Complex Chronic: 7.7% vs 8.8%

This advantage is also further undermined by the dramatic difference in observation stays. This is where the patient stays at the hospital for observation (sometimes for days) but is not technically readmitted, thusly managing the readmission rate. Observation stays have been criticized for creating additional out-of-pocket expenses for Medicare beneficiaries. The practice lowers coverage for certain medications, makes Medicare beneficiaries ineligible for subsequent nursing home care, and reduces coverage while increasing out-of-pocket costs in other ways. Medicare Advantage customers prove 21% more likely to find themselves in observation stays rather than just being admitted the to hospital.

Emergency Room Visits

Emergency room visits are considered an outcome measure in elderly healthcare because excellent healthcare tends to reduce the need for emergency departments. Overall, Medicare Advantage customers prove marginally more likely to end up in the ED. The risk is strikingly different among the subset of Medicare beneficiaries who are frail elderly. Among frail elderly patients, Medicare Advantage customers need the ED 40% more often. Also, spending during such visits reflects the seriousness of care. Among all groups, the Medicare Advantage patients had 26% higher costs, suggesting more severe emergencies.

Conclusion

The Avalere Health study, “Positive Outcomes for High-Need, High-Cost Beneficiaries in Medicare Advantage Compared to Traditional Fee-For-Service Medicare” is a valuable addition to the ongoing conversation about the differences between Medicare Advantage and traditional Medicare. It seems to be the first serious study to compare outcomes of care. The process measures for improved wellness care and access to outpatient care seem to fall strongly in the favor of Medicare Advantage. Unfortunately, the outcome measures seem more blurry, with subjectivity in the avoidable hospitalization rates, and questions surrounding the rehospitalization rates. Traditional Medicare seems to provide increased access to most post-acute care such as home health and seems to do a better job of keeping frail elderly patients out of the emergency department. Additional studies that are university-based and published in peer review journals would be a welcome addition to this data.