It’s no surprise that health plans and health systems are entering the Medicare Advantage (MA) market as 10,000 people become eligible every day. There has been a rise in enrollment and it continues to grow. In fact, CMS officials say they expect MA enrollment to jump to nearly 23 million people in 2019, which is a 12% increase. MA is not only growing, it’s also performing well. According to a new study, MA has surpassed Medicare Fee-for-Service (FFS) in developing positive member healthcare outcomes and reducing care costs.

The study, led by Better Medicare Alliance, analyzed two large national samples of MA and FFS Medicare beneficiaries who were enrolled throughout 2015, MA beneficiaries get better care at a lower cost than those enrolled in FFS. Lower costs of care equate to more savings for the plan.

Here are five important statistics from the study that demonstrate the key differences in overall healthcare utilization, cost of care, and clinical quality outcomes between MA and FFS Medicare.

  1. Medicare Advantage achieved 21% lower average per beneficiary costs than FFS Medicare for dual eligible patients in the clinically complex diabetes cohort.
  2. Medicare Advantage, on average, has superior performance relative to FFS Medicare on Medicare Healthcare Effectiveness Data and Information Set (HEDIS) indicators pertaining to the use of preventative care services.
  3. Medicare Advantage outperformed FFS Medicare with nearly 30% lower rates of potentially avoidable hospitalizations, higher rates of preventative screenings/tests, such as LDL cholesterol testing and breast cancer screening, and significantly lower rates of complications in patients with diabetes.
  4. Medicare Advantage beneficiaries had 23.1% fewer inpatient stays (249 versus 324 per 1,000 beneficiaries in FFS Medicare)
  5. Total cost of care for dual eligible beneficiaries was 16.7% higher in FFS Medicare compared to Medicare Advantage ($13,398 versus $11,159 in Medicare Advantage), driven by higher spending on hospital inpatient and outpatient services in FFS Medicare

MA plans manage the full spectrum of risk for a population of enrolled Medicare beneficiaries. The MA program is designed in a capitated structure which creates incentives to manage and coordinate care for beneficiaries. Additionally, the program’s rules allow health plans to offer additional benefits that are not covered by FFS Medicare. Likewise, since MA plans focus on coordinated care and preventive services, the results are lower utilization of high-cost healthcare services, lower overall costs for high-need beneficiaries, and consistently better quality outcomes for similar groups of Medicare beneficiaries, including dual eligible and clinically complex beneficiaries, according to the report.

Click the following link to read the full report by Better Medicare Alliance:

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