Medicare Advantage patients have fewer hospitalizations but more ED visits for potentially avoidable conditions, study finds

March 3, 2023 – Patients insured by Medicare Advantage (MA) had fewer hospitalizations for potentially avoidable conditions—such as dehydration, bacterial pneumonia, or urinary tract infection—compared to patients insured by traditional Medicare, according to a new study. Overall, however, patients with Medicare Advantage were more likely than patients with traditional Medicare to require some form of acute care for these same conditions, such as an emergency department (ED) visit or an outpatient hospital stay, also known as an observation stay.

These findings raise the possibility that a reduction in hospitalizations in Medicare Advantage may be related to shifting patients with the same medical conditions to cheaper sites of care, rather than higher-quality preventive care avoiding those conditions entirely, according to the study’s lead author, Adam Beckman, a graduating MD, MBA student at Harvard Medical School and Harvard Business School. Co-authors of the study included Harvard T.H. Chan School of Public Health’s Austin Frakt, Ciara Duggan, Jie Zheng, E. John Orav, Thomas Tsai, and Jose Figueroa.

The study, published February 24 in JAMA Health Forum, looked at data from 2018 from more than 10 million Medicare beneficiaries. The researchers compared information on hospitalizations among people on traditional Medicare with that of people on MA—plans that are offered through Medicare-approved private companies and that may include additional benefits but also may limit service providers.

The study comes at a moment of national dialogue about the MA program, as the federal Centers for Medicare & Medicaid Services recently released a final rule that would affect future MA payments.

Researchers found that apparent decreases in the number of potentially avoidable hospitalizations among MA patients coincided with more direct discharges from EDs and more observation stays in EDs—in which a patient is cared for longer but is not admitted to the hospital.

This study cannot determine what’s causing these trends, but one possible explanation is that MA is more aggressive in using tools like prior authorizations to manage utilization, Beckman said in a social media post and a February 28 Fierce Healthcare article.

Beckman and Figueroa said that it is not clear how these trends ultimately affect patients. On one hand, more cost-effective care can be beneficial. On the other hand, if that efficiency comes with tradeoffs in quality, patient outcomes, or patient finances, these trends would be concerning, they said. They emphasized the need for future research into those questions.

Read the Fierce Healthcare article: Medicare Advantage patients account for fewer avoidable hospitalizations. Here’s why

Read the study: Evaluation of Potentially Avoidable Acute Care Utilization Among Patients Insured by Medicare Advantage vs Traditional Medicare