Healthcare Spending Lower in MA for Beneficiaries with Chronic Conditions

Medicare Advantage beneficiaries with chronic conditions had lower healthcare spending and fewer emergency room visits than fee-for-service (FFS) beneficiaries, according to a report from Avalere Health commissioned by Better Medicare Alliance.

The report updates a previous Avalere analysis from 2018 that compared clinical outcomes between Medicare Advantage and FFS beneficiaries. The analysis was based on 2015 data and looked at beneficiaries with hypertension, hyperlipidemia, and/or diabetes.

The updated study assessed beneficiaries enrolled in Medicare Advantage or FFS in 2019 with one or more of the three chronic conditions.

The presence of hypertension, hyperlipidemia, diabetes, and combinations of the conditions were similar between Medicare Advantage and FFS beneficiaries. A larger share of Medicare Advantage beneficiaries had all three conditions (28.8 percent versus 23.7 percent).

Medicare Advantage beneficiaries had lower utilization of acute care compared to FFS beneficiaries, the study found.

For example, Medicare Advantage beneficiaries had fewer inpatient stays across all chronic condition subgroups. The annual rates per 1,000 beneficiaries were 365 versus 375 for those with hypertension, 355 versus 378 for those with hyperlipidemia, and 427 versus 435 for beneficiaries with diabetes.

Similarly, Medicare Advantage beneficiaries had fewer emergency room visits than beneficiaries with FFS. The rate among Medicare Advantage beneficiaries ranged from 442 to 511 visits per 1,000 beneficiaries, while the rate for those in FFS ranged from 573 to 665 visits per 1,000 beneficiaries.

On the other hand, Medicare Advantage beneficiaries had higher rates of physician office visits, with a range of 11 to 12 visits per year compared to 10.1 to 10.5 visits per year for FFS beneficiaries.

In addition to healthcare use, the report assessed spending on acute inpatient care, ambulatory outpatient care, prescription drugs, and other medical costs.

Total per member per month (PMPM) spending across all chronic condition groups and all spending categories was lower for Medicare Advantage beneficiaries.

The higher utilization of outpatient services and lower use of inpatient services among Medicare Advantage beneficiaries may have contributed to lower overall spending, as physician visits are less expensive on a PMPM basis compared to inpatient hospitalizations.

Total spending was highest for beneficiaries with diabetes in Medicare Advantage ($1,532) and FFS ($2,204). Meanwhile, spending was lowest for those with hyperlipidemia in both Medicare Advantage ($1,276) and FFS ($1,834).

Among beneficiaries with hypertension, total spending ranged from $1,296 for Medicare Advantage beneficiaries to $1,837 for FFS beneficiaries.

The report used Healthcare Effectiveness Data and Information Set (HEDIS) measures to compare the health outcomes of the two beneficiary groups, including plan all-cause 30-day readmissions, medication adherence measures, and comprehensive diabetes care.

Health outcomes were similar for Medicare Advantage and FFS beneficiaries across the three chronic conditions.

Plan all-cause 30-day readmissions were slightly higher in Medicare Advantage for those with hypertension and hyperlipidemia and somewhat lower for beneficiaries with diabetes. Cholesterol medication adherence rates and comprehensive diabetes care were slightly higher among FFS beneficiaries.

As Medicare Advantage enrollment grows, the study findings help highlight how the program manages healthcare costs and improves health outcomes compared to the FFS alternative.