Report

Medicare Advantage Achieves Better Outcomes Than Traditional Medicare

Overview

Medicare is the largest payer of healthcare in the United States. Medicare Advantage, the private Medicare health plan option available to beneficiaries, now provides coverage for more than one-third of all people with Medicare. As policymakers look to encourage value-driven, high-quality, and cost-effective care delivery models, there is growing interest in directly comparing traditional Fee-for-Service (FFS) Medicare and Medicare Advantage. The clinical characteristics and care needs of older adults are changing over time. More than half of the Medicare population has 4 or more chronic conditions. Effectively managing the delivery of care for Medicare beneficiaries with multiple chronic conditions has the potential to improve the quality of life for these beneficiaries while reducing Medicare spending. To date, there is little comprehensive information on the performance and value of Medicare Advantage compared to FFS Medicare, due in part to a lack of access to Medicare Advantage data comparable to that available for FFS Medicare. The objective of this study is to compare demographic and clinical characteristics, overall healthcare utilization, cost of care, and related clinical quality outcomes in 2 large national samples of Medicare Advantage and FFS Medicare beneficiaries enrolled for the full year of 2015. Avalere selected beneficiaries with 1 or more of 3 of the top-5 most prevalent chronic conditions in the Medicare population: hypertension, hyperlipidemia, and diabetes. This descriptive study lays the groundwork for further exploration into the significant differences observed in the utilization patterns, cost of care, and quality outcomes between the 2 chronically ill populations.

Key Findings:

• Medicare Advantage has a higher proportion of patients with clinical and social risk factors shown to affect health outcomes and cost than FFS Medicare.

• Despite a higher proportion of clinical and social risk factors, Medicare Advantage beneficiaries with chronic conditions experience lower utilization of high-cost services, comparable average costs, and better outcomes.

• Health outcomes and cost savings are significantly better for Medicare Advantage beneficiaries with diabetes—the most clinically complex cohort in which more than 75% of beneficiaries had all 3 chronic conditions in both populations—than for FFS Medicare beneficiaries with diabetes.

• Dual eligible/low-income subsidy Medicare Advantage beneficiaries with chronic conditions experience significantly better patient outcomes and lower costs savings compared to similar beneficiaries in FFS Medicare.

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