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NEW REPORT: MEDICARE ADVANTAGE OUTPERFORMS TRADITIONAL MEDICARE FOR CHRONICALLY ILL

Washington, DC – A new report released today by Avalere Health, a leading health research and consulting firm, finds that individuals with certain chronic conditions enrolled in Medicare Advantage - the managed-care option in Medicare – experience better health outcomes and similar or lower costs compared to those enrolled in Traditional Fee-for-Service (FFS) Medicare.

The report entitled “Medicare Advantage Achieves Better Health Outcomes and Lower Costs for Beneficiaries with Chronic Conditions Compared to Fee-for-Service Medicare” finds that Medicare Advantage outperforms traditional Medicare on the following: higher rates of preventive screenings, fewer avoidable hospitalizations, and fewer emergency room visits.

The study was funded by Better Medicare Alliance (BMA), a Washington- based nonprofit organization that advocates for Medicare Advantage.

“This study adds to the growing body of evidence showing the ability of Medicare Advantage to align incentives to better manage the care for a high- need population with multiple chronic conditions,” said Allyson Y. Schwartz, BMA President and CEO. “Policymakers should recognize the role that Medicare Advantage plays in managing care for the highest-cost, highest- need individuals and ensure it remains a strong and viable option for Medicare beneficiaries, particularly for those with multiple chronic conditions. We are excited about these findings as strong evidence of Medicare Advantage’s performance and the value it offers for beneficiaries with chronic conditions.”

Avalere compared demographic, clinical, utilization, quality and cost metrics of Medicare Advantage and FFS Medicare beneficiaries with one or more of three chronic conditions: hypertension, hyperlipidemia, and diabetes. Medicare Advantage beneficiaries in Avalere’s study had 23% fewer inpatient stays and 33% fewer emergency room visits than FFS Medicare beneficiaries. Medicare Advantage beneficiaries also received more preventive physician tests and services, while FFS Medicare beneficiaries had more inpatient stays and outpatient/emergency care services.

“Medicare Advantage beneficiaries with chronic conditions experienced better quality of care than similar FFS Medicare beneficiaries,” said Dan Mendelson, founder of Avalere. “Our findings present new evidence for Medicare Advantage’s value proposition, especially for high-need beneficiaries.”

 

KEY FINDINGS

Medicare Advantage Has More Beneficiaries with Significant Clinical and Social Risk Factors

While the Medicare Advantage and FFS Medicare study populations had similar demographic profiles, Medicare Advantage had a higher proportion of beneficiaries with clinical and social risk factors shown to affect outcomes and cost than FFS Medicare.

Compared to FFS Medicare, Medicare Advantage beneficiaries had:

64% 15% 57% 16%

Higher likelihood of enrolling in Medicare due to disability

Higher likelihood of being dual-eligible/low-income Higher rate of serious mental illness

Higher rate of alcohol/drug/substance abuse

 

Medicare Advantage Chronically Ill Beneficiaries Experience Better Health Outcomes

Despite a higher proportion of risk factors, Medicare Advantage beneficiaries with chronic conditions experienced lower utilization of high-cost services, higher rates of preventive tests and screenings, and better outcomes.

Compared to FFS Medicare, Medicare Advantage achieved:

23% 33% 29% 13% 5%
Fewer inpatient hospital stays Fewer emergency room visits Lower rate of potentially avoidable hospitalizations Higher rate of LDL testing Higher rate of breast cancer screening

 

Methodology

A descriptive cross-sectional cohort design was used to analyze a sample of 1,581,822 MA beneficiaries extracted from Inovalon’s proprietary MORE2 Registry® and a sample of 1,212,698 FFS beneficiaries extracted from Medicare Standard Analytical Files enrolled for the full year in 2015. Costs were calculated using published Medicare standard rates to enable direct comparison of spending by expenditure category in MA and FFS Medicare.

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