Medicare Advantage outperforms fee-for-service in cost, care for dual eligibles

Medicare Advantage
Medicare Advantage outperforms fee-for-service in latest Avalere study. (Getty/designer491)

For dually eligible beneficiaries, Medicare Advantage (MA) plans outperform Medicare fee-for-service (FFS) plans, according to a new study from Avalere.

The study compared the costs and outcomes across MA versus FFS plans for dual eligibles with one or more of three chronic conditions: hypertension, hyperlipidemia and/or diabetes. Specifically, the overall cost of care was 16.7% higher for those in traditional Medicare when researchers factored in quality measure outcomes and the use of expensive health services such as emergency department visits.

Christie Teigland, principal at Avalere and co-author of the study, told FierceHealthcare that analysts were surprised to see that MA beneficiaries had virtually the same prevalence of the top 20 chronic conditions as FFS beneficiaries.

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“I think there is a widespread belief that MA members are healthier, but our analysis shows that is not the case,” she said.

The team was also surprised that while MA beneficiaries had more risk factors, they actually had lower costs and utilization of costly services such as hospital stays and emergency room visits.

“They were more likely to be female, minority, disabled, and have mental health issues, alcohol/drug/substance abuse issues and other social risk factors such as living in a high poverty neighborhood, lower education and other social determinants of health. We did not adjust for those factors, so the results underestimate the better performance of MA if anything,” she added.

This trend was driven by higher spending on hospital inpatient and outpatient services among traditional Medicare beneficiaries. However, spending was higher on physician services and tests for MA beneficiaries.

Doctor visits and testing services may have been higher due to the broader use of preventative care among MA beneficiaries. The study shows that dually eligible beneficiaries experienced significantly lower rates of complications, avoidable hospitalizations and readmissions—plus more preventative care—than dual-eligible FFS beneficiaries.

RELATED: MedPAC weighs a Medicare without fee-for-service

Dual-eligible MA beneficiaries received a 17.4% higher rate of LDL testing than those with FFS. And only half of the dually eligible Medicare FFS beneficiaries received preventive breast cancer screenings, versus 73.1% of dual-eligible MA beneficiaries. In addition, dual-eligible MA beneficiaries with diabetes had lower rates of complications, 49% fewer complications overall and 71% fewer more serious complications.

The study also found that 56.2% of dual-eligible MA beneficiaries reported hospitalizations versus 39.2% of FFS dual beneficiaries. Office visits for MA beneficiaries were also slightly higher as well, 7,907 versus 7,076. In addition, MA beneficiaries reported fewer trips to the emergency department, 822 versus 1,419 FFS beneficiaries.

RELATED: Study: CMS may overpay Medicare Advantage plans by billions

The authors of the study conclude that the flexibility and coordinated care of MA results in better outcomes and lower costs for the Medicare recipient and the government as well.

"MA plans spend more on physician services/tests and preventive screenings, but less on emergent care services, resulting in lower costs overall in the most disadvantaged dual-eligible population. If MA is shown to provide better care at a lower cost, it supports the value proposition to further expand MA to serve even more Medicare beneficiaries," Teigland said.

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