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Medicare managed care plan performance: a comparison across hospitalization types
Jayasree Basu1, Lee Rivers Mobley2
1U.S. Department of Health and Human Services, Agency for Healthcare Research and Quality.
Objective:
The study evaluates the performance of Medicare managed care (Medicare Advantage [MA]) Plans in comparison to Medicare fee-for-service (FFS) Plans in three states with historically high Medicare managed care penetration (New York, California, Florida), in terms of lowering the risks of preventable or ambulatory care sensitive conditions (ACSC) hospital admissions and providing increased referrals for admissions for specialty procedures.
Study Design/Methods:
Using 2004 hospital discharge files from the Healthcare Cost and Utilization Project (HCUP-SID) of the Agency for Healthcare Research and Quality, ACSC admissions are compared with 'marker' admissions and 'referral-sensitive' admissions, using a multinomial logistic regression approach. The year 2004 represents a strategic time to test the impact of MA on preventable hospitalizations, because the HMOs dominated the market composition in that time period.
Findings:
MA enrollees in California experienced 22% lower relative risk (RRR= 0.78, p<0.01), those in Florida experienced 16% lower relative risk (RRR= 0.84, p<0.01), while those in New York experienced 9% lower relative risk (RRR=0.91, p<0.01) of preventable (versus marker) admissions compared to their FFS counterparts. MA enrollees in New York experienced 37% higher relative risk (RRR=1.37, p<0.01) and those in Florida had 41% higher relative risk (RRR=1.41, p<0.01)-while MA enrollees in California had 13% lower relative risk (RRR=0.87, p<0.01)-of referral-sensitive (versus marker) admissions compared to their FFS counterparts.
Conclusion:
While MA plans were associated with reductions in preventable hospitalizations in all three states, the effects on referral-sensitive admissions varied, with California experiencing lower relative risk of referral-sensitive admissions for MA plan enrollees. The lower relative risk of preventable admissions for MA plan enrollees in New York and Florida became more pronounced after accounting for selection bias.
Insights
Medicare Advantage (MA) plans reduced preventable hospitalizations across New York, Florida, and California. However, referral-sensitive admissions varied by state, with California showing a decrease for MA enrollees.
Area of Science:
- Health Services Research
- Public Health Policy
- Comparative Effectiveness Research
Background:
- Medicare Advantage (MA) enrollment has grown significantly, necessitating an evaluation of its performance relative to traditional Medicare fee-for-service (FFS).
- Understanding the impact of MA on hospital admissions for Ambulatory Care Sensitive Conditions (ACSC) is crucial for assessing healthcare quality and efficiency.
- Three states with high MA penetration (California, Florida, New York) provide a robust setting to examine these comparative outcomes.
Purpose of the Study:
- To compare the performance of Medicare Advantage (MA) plans versus Medicare fee-for-service (FFS) in three high-penetration states.
- To evaluate the impact of MA on reducing hospital admissions for preventable, ambulatory care sensitive conditions (ACSC).
- To assess whether MA plans influence referrals for specialty procedures.
Main Methods:
- Utilized 2004 hospital discharge data from the Healthcare Cost and Utilization Project (HCUP-SID).
- Employed a multinomial logistic regression model to compare ACSC admissions against 'marker' and 'referral-sensitive' admissions.
- Focused on 2004 to capture a period of significant Health Maintenance Organization (HMO) market dominance within MA plans.
Main Results:
- MA enrollees showed significantly lower relative risk for preventable admissions in California (22%), Florida (16%), and New York (9%) compared to FFS.
- Relative risk for referral-sensitive admissions varied: California saw a 13% decrease, while New York (37% increase) and Florida (41% increase) experienced higher risks for MA enrollees versus FFS.
- These findings highlight state-specific differences in MA plan performance regarding different types of hospital admissions.
Conclusions:
- MA plans were associated with reduced preventable hospitalizations in all three studied states.
- The impact of MA on referral-sensitive admissions differed across states, with California demonstrating a lower relative risk.
- Accounting for selection bias further strengthened the observed reductions in preventable admissions for MA enrollees in New York and Florida.
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