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Study shows better outcomes and lower costs for Medicare Advantage beneficiaries

Jul 27 2018
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A new study from health research and consulting firm Avalere Health finds that individuals with certain chronic conditions enrolled in Medicare Advantage (MA) – 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 MA outperforms FFS Medicare on the following: higher rates of preventive screenings, fewer avoidable hospitalizations, and fewer emergency room visits.

Avalere compared demographic, clinical, utilization, quality and cost metrics of MA and FFS Medicare beneficiaries with one or more of three chronic conditions: hypertension, hyperlipidemia, and diabetes.  MA beneficiaries had 23% fewer inpatient stays and 33 percent fewer emergency room visits than FFS Medicare beneficiaries. Dual eligible MA beneficiaries with chronic conditions in particular experience significantly better patient outcomes and lower costs savings, according to the study.

MA beneficiaries also received more preventive physician tests and services, while FFS Medicare beneficiaries had more inpatient stays and outpatient/emergency care services.

These findings, and the additional benefits MA provides to beneficiaries, help explain why MA enrollment is projected to rise from 20 million today to more than 30 million by the end of 2027.

The study was funded by Better Medicare Alliance (BMA), a Washington-based nonprofit organization that advocates for Medicare Advantage. Among BMA’s more than 100 allies are advocacy, research, provider, beneficiary and community organizations, as well Aetna and other plans.