Robert Graham Center Research

Avoidable Hospital Admissions Drop With Medicare Advantage

May 17, 2016 02:02 pm Michael Laff Washington, D.C. –

Medicare Advantage enrollees have a 10 percent lower rate of avoidable hospitalizations compared with traditional fee-for-service Medicare beneficiaries, according to a study published by the Robert Graham Center for Policy Studies in Family Medicine and Primary Care that focused squarely on patients age 65 and older who reported traditional Medicare or Medicare Advantage as their primary insurer.

[Physician With Nurse Talking To Senior Female Patient In Hospital Bed]

The research, "Understanding the Impact of Medicare Advantage on Hospitalization Rates: A 12-State Study," used data from the dozen states that specifically identify whether a patient's primary payer is Medicare Advantage; most states do not make this distinction, reporting only that the primary payer is Medicare. Still, said the authors, the 12 states included appear to be representative of all states in terms of race, ethnicity, poverty rates and physician workforce.

The lower rate of avoidable hospitalizations persisted after researchers controlled for age, gender, race/ethnicity, region and "various proxies for health," they wrote.

Medicare Advantage costs are market-sensitive, and some analysts question whether CMS should be paying private insurers a higher premium to care for Medicare patients. In some states, such as Oregon, Medicare Advantage plans are much more expensive than traditional fee-for-service Medicare.

Andrew Bazemore, M.D., M.P.H., director of the Graham Center, was one of the authors of the study.

"Using a larger study area and more contemporary data and methods, this work confirms previous evidence showing that you tend to find fewer avoidable hospitalizations in areas with high penetration of Medicare Advantage and among individual beneficiaries using these plans compared to traditional Medicare," Bazemore told AAFP News.

Graham Center researchers went a step beyond previous studies by also measuring hospitalizations that are planned in an effort to prevent worse outcomes, such as a patient receiving a new pacemaker. These "referral-sensitive" admissions increase the overall hospitalization rate, but they indicate patients are receiving better care. Medicare Advantage patients were more likely to have referral-sensitive hospitalizations.

Researchers said Medicare Advantage also could have "spillover effects" that positively affect the care of others. An example they cited suggests that an increase in the number of Medicare Advantage patients could lead to fewer MRI machines in an area, which could result in fewer MRI scans overall.

"Particularly in areas where providers are receiving some form of comprehensive payment for Medicare Advantage patients, the effect may result from enabling better primary care, as we found in a previous study of the WellMed health system in Texas,"(11 page PDF) Bazemore said. "In that study, we revealed how a primary care-driven accountable care organization used effective primary care to reduce mortality and improve outcomes in a Medicare Advantage population."

He was quick to add that positive trends cannot be applied across the board. WellMed demonstrated early success but has struggled to replicate the model outside its principal territory.

A steady rise in the volume of Medicare Advantage combined with more capitation payments can allow physicians to make practice changes that enable more comprehensive care while they closely monitor chronic care patients.

There were some exceptions in hospital data by state. Rhode Island, Oregon and Massachusetts reported higher rates of avoidable hospitalizations for Medicare Advantage enrollees compared with traditional Medicare beneficiaries, which the researchers said suggests that Medicare Advantage attracts less healthy patients in these states. On the other hand, Medicare Advantage patients in Arizona, Maryland, Michigan and New Jersey reported substantially lower hospitalization rates compared to traditional Medicare patients.

"Medicare Advantage is merely a payment mechanism, and a heterogeneous one at that," Bazemore said. "It may enable the primary care function in certain markets and conditions, but we can't assume similar effects in all situations and markets."

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