Are Medicare Advantage plans successful at improving care quality? Evidence from hospital readmissions

Background

Both because of policy changes and the incentive to reduce costs in a capitated environment, Medicare Advantage plans and providers have been increasingly focused on the needs of high-risk, high-need individuals through Special Needs Plans, disease management programs, and better care coordination for vulnerable, expensive populations. While improving the delivery of care and better coordinating post-discharge transitions are laudable goals, assessing care quality has proven difficult. Some research suggests MA beneficiaries receive preventative services at higher rates than those in Traditional Medicare (TM) (Ayanian et al, 2013), however less evidence exists about how the quality of care provided to MA and TM beneficiaries might differ in other practice settings.

Objective

We aim to compare relative readmission risks for beneficiaries enrolled in MA and TM and highlight how changes in those measures can serve as evidence of care coordination and changes in practice outcomes. We compare MA patients with those in TM, assessing the risks of 30-day hospital readmissions using multivariate models with selection adjustment including propensity score matching. While many studies find unadjusted readmissions rates are lower for MA than TM enrollees, the evidence is less clear after accounting for the differing health risk of the two groups.

Study Design/Methods:

We use the Agency for Healthcare Research and Quality’s (AHRQ) 2014 HCUP-SID data for 4 states. Hospital discharge data from HCUP is combined with HRSA data to obtain information on patient’s area of residence and with AHA data to obtain hospital characteristics. The outcome of interest is the patient’s risk of 30-day all-cause hospital readmission, defined as the probability of a hospital readmission within 30 days of discharge from an index hospital admission of any type. We use propensity score analysis to address the issue of self-selection, matching enrollees through a large number of patient and area characteristics including an extensive set of secondary comorbidities and selected medical surgical diagnoses.

Findings

Our preliminary findings based on data from 4 states in 2014 indicate that MA enrollees are significantly less likely to be readmitted than TM enrollees. Compared to an average readmission rate of 14.9% for patients in TM, unadjusted probabilities of readmission were 8% less for MA than TM enrollees and selection-adjusted results were very similar (7.5%, p<0.01) . The findings varied across states: adjusted risks of readmissions were 13% and 2.2% lower for MA than TM in California and Florida, respectively.

Conclusion

MA enrollment appears to be associated with significantly lower all-cause readmission risk relative to TM enrollment. Our findings are robust to a variety of alternative methods for controlling for health status. These results challenge the notion that differences in quality measures between MA and TM are due solely to the better health status of MA beneficiaries.

Policy Implications

The study topic is highly relevant in light of the growing importance of MA plans, and the growing debate surrounding MA versus TM delivery systems. Our study provides suggestive evidence regarding the success of MA plans in achieving better care transitions and improving care delivery and practice relative to traditional Medicare.