Do Medicare Advantage enrollees tend to be admitted to hospitals with better or worse outcomes compared with fee-for-service enrollees?
- 131 Downloads
The hospitals selected by or for Medicare beneficiaries might depend on whether the patient is enrolled in a Medicare Advantage (MA) plan. A theoretical model of profit maximization by MA plans takes into account the tradeoffs of consumer preferences for annual premium versus outcomes of care in the hospital and other attributes of the plan. Hospital discharge databases for 13 states in 2006, maintained by the Agency for Healthcare Research and Quality, are the main source of data. Risk-adjusted mortality rates are available for all non-maternity adult patients in each of 15 clinical categories in about 1,500 hospitals. All-adult postoperative safety event rates covering 9 categories of events are calculated for surgical cases in about 900 hospitals. Instrumental variables are used to address potential endogeneity of the choice of a MA plan. The key findings are these: enrollees in MA plans tend to be treated in hospitals with lower resource cost and higher risk-adjusted mortality compared to Fee-for-Service (FFS) enrollees. The risk-adjusted mortality measure is about 1.5 percentage points higher for MA plan enrollees than the overall mean of 4%. However, the rate of safety events in surgical patients favors MA plan enrollees—the rate is 1 percentage point below the average of 3.5%. These discrepant results are noteworthy and are plausibly due to greater discretion by the health plan in approving patients for elective surgery and as well as selecting hospitals for surgical patients. Emergency patients are generally excluded for the safety outcome measures. In addition, the current mortality measures may not adequately represent all surgical patients. Such caveats should be prominently highlighted when presenting comparative data. With that proviso, the study justifies informing Medicare beneficiaries about the mortality and safety outcome measures for hospitals being used by a MA plan compared to hospitals used by FFS enrollees.
KeywordsMedicare Advantage Hospital mortality rates Patient safety
JEL ClassificationI11 I18
Unable to display preview. Download preview PDF.
- Agency for Healthcare Research and Quality, US DHHS. (2008). 2007 National Healthcare Quality Report, AHRQ Publication No. 08-0040.Google Scholar
- Averill R. (2000) Development of the All Patient Refined DRGs (APR-DRGs). 3M Inc. HIS Research Report; 8-97: 1–22Google Scholar
- Brenner, M. H. (June 1984). Estimating the effects of economic change on national health and social well-being. Joint economic committee of the US congress. Washington, DC: Government Printing Office.Google Scholar
- Brown R. (1987) Biased selection in the Medicare competition demonstrations, Report prepared for the health care financing administration. Princeton, NJ, athematica Policy ResearchGoogle Scholar
- Eggers P. W., Prihoda R. (1982) Pre-enrollment reimbursement patterns of Medicare beneficiaries enrolled in “at-risk” HMOs. Health Care Financing Review 4: 55–72Google Scholar
- Friedman, B., Jiang, H. J., & Russo, C. A. (2008). Medicare hospital stays: Comparisons between the fee-for-service plan and alternative plans, 2006. HCUP Statistical Brief #66. January 2009. Agency for Healthcare Research and Quality, Rockville, MD. Mhttp://www.hcup-us.ahrq.gov/reports/statbriefs/sb66.pdf. Accessed 15 April 2009.
- Glied S. (2000) Managed care. In: Culyer A., Newhouse J. P. (eds) Handbook of health economics (Vol. 1). Elsevier, New YorkGoogle Scholar
- Greene W. H. (2000) Econometric analysis (Chap. 9.5.2, 4th ed.). Prentice Hall, Upper Saddle River, New JerseyGoogle Scholar
- Hansen L. (1982) Large sample properties of generalized method of moments estimators. Econometrica 70(1): 163–189Google Scholar
- McDonald, K. M., Romano, P. S., Geppert, J., Davies, S., Duncan, B. W., & Shojania, K. G. (2002). Measures of patient safety based on hospital administrative data-the patient safety indicators. Technical Review 5, (Prepared under Contract No. 290-97-0013). AHRQ Publication No. 02-0038.Google Scholar
- US Congressional Budget Office. (2007). Statement of Peter Orszag, Director, before the Senate Finance Committee, published 4/11/2007.Google Scholar