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Medicare Advantage HMO enrollees appear to use fewer services

Medicare Advantage (MA) HMO plans may be offering more efficient care than Medicare Part A and B plans, a study published in the journal Health Affairs has found. According to researchers, MA HMO enrollees have fewer hip and knee replacements and use fewer benefits for outpatient surgeries and procedures, inpatient stays and emergency department visits. 

Based on a national comparison of data from MA HMO and traditional Medicare plans from 2003 to 2009, the researchers found that utilization rates in some areas — like ER and ambulatory surgery — were around 20 percent lower in MA HMO plans. MA HMO enrollees also received about 10 percent fewer hip and knee replacements and initially had lower rates of ambulatory visits and hospitalizations.

[See also: Medicare Advantage plans expected to increase by 7 percent in 2013]

The research team included four Harvard policy and medical professors, a researcher from the National Committee for Quality Assurance and L. Gregory Pawlson, executive director for quality innovation at the Blue Cross Blue Shield Foundation.

Overall, the authors wrote, the findings suggest that MA HMOs “may be able to treat a given patient with greater efficiency while attaining equal or superior quality through their flexibility in enrollee benefits, network contracting and coordination of care.”

About a quarter of all Medicare beneficiaries, or 12.8 million, are enrolled in MA plans, up from 4.6 million a decade earlier, and as the program has grown, HMOs have come to account for 65 percent of MA enrollment.

Now about 15 years old, the MA supplemental insurance program was given new life in 2003, when the Medicare Modernization Act increased payments to participating plans. That, the authors wrote, “made the program more attractive to beneficiaries because competition among plans and regulations led plans to pass along most of the extra payments to beneficiaries in the form of enhanced benefits or lower premiums.”

The researchers, led by Harvard Medical School professor Bruce Landon, used effectiveness and utilization data submitted to the Centers for Medicare & Medicaid Services (CMS) by MA health plans, as well as CMS’ consumer satisfaction surveys. The sample sizes grew from 3.1 million MA HMO enrollees in 2003 to 5.7 million in 2009 and included data from 280 health plans by 2009.

The authors studied rates of medical and surgical hospitalizations, outpatient visits, ambulatory procedures, emergency department visits and twelve specific surgical procedures, and compared MA HMO plans to CMS enrollment and claims data from a random sample of traditional Medicare beneficiaries, adjusted for demographic factors.

They found MA HMO enrollees had 25 to 35 percent fewer emergency department visits, compared to traditional Medicare enrollees, and had 20 to 25 percent fewer inpatient medical days. MA HMO plans also had fewer ambulatory surgeries and procedures than in traditional Medicare, with ambulatory utilization 25 percent lower in 2003, before narrowing to 7 percent by 2008.

Inpatient surgical days initially were lower in MA HMOs, but by 2007 started to mirror traditional Medicare rates. HMO outpatient visit rates were also about 10 percent lower in the mid-2000s, before converging by 2009.

Rates of elective knee and hip replacements were about 10 percent lower in Medicare Advantage HMOs for existing plans and were almost 20 percent lower for new plans after 2007.

The study comes with some limitations, the authors say. It wasn’t designed to determine management features of health plans, and the authors lacked data on diagnoses of MA HMO enrollees, which meant they could not calculate a risk adjustment score, like CMS uses for health plan payments.

Those limitations aside, the authors wrote, the integrated approach of MA HMOs “appears to be successfully controlling the use of the most discretionary services, such as hip and knee replacement and outpatient surgery or procedures, while maintaining the use of nondiscretionary services such as the reduction of femur fractures.”

Apparently the first national analysis of MA HMO plans, the study comes amid booming enrollment in Medicare, an increase in Medicare Advantage enrollment and also concern for keeping fixing Medicare’s cost and spending problems.

The Department of Health and Human Services recently announced MA plans are projected to increase enrollment by 11 percent in 2013 and that average premium prices will remain unchanged. Since 2010, MA premiums have decreased an average of 10 percent and enrollment in these plans has increased 28 percent.


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