There is considerable controversy over the use of private insurers to deliver public health insurance benefits. We investigate the consequences of patients enrolling in Medicare Advantage (MA), privately managed care organizations that compete with the traditional fee-for-service Medicare program. We use exogenous shocks to MA enrollment arising from plan exits from New York counties in the early 2000s and utilize unique data that links hospital inpatient utilization to Medicare enrollment records. We find that individuals who were forced out of MA plans due to plan exit saw very large increases in hospital utilization. These increases appear to arise through plans both limiting access to nearby hospitals and reducing elective admissions, yet they are not associated with any measurable reduction in hospital quality or patient mortality. (JEL G22, I11, I12, I13, I18)
People with severe persistent mental illness pose a significant challenge to managed care organizations and society in general. The financial costs are staggering as is the community impact including homelessness and incarceration. This population also has a high incident of chronic comorbid disorders that not only drives up healthcare costs but also significantly shortens longevity. Traditional case management approaches are not always able to provide the intense and direct interventions required to adequately address the psychiatric, medical and social needs of this unique population. This article describes a Medicare Advantage Chronic Special Needs Program that provides a Medical Home, Active Community Treatment, and Integrated Care. A comparison of utilization and patient outcome measures of this program with fee for service Medicare found significant reduction in utilization and costs, as well as increased adherence to the management of chronic medical conditions and preventative services.
This study assessed the odds of dying in hospital associated with enrollment in Medicare Advantage (M-A) versus conventional Medicare Fee-for-Service (M-FFS). Data were derived from the 2008 and 2010 waves of the Health and Retirement Study ( n = 1,030). The sample consisted of elderly Medicare beneficiaries who died in 2008–2010 (34% died in hospital, and 66% died at home, in long-term senior care, a hospice facility, or other setting). Logistic regression estimated the odds of dying in hospital for those continuously enrolled in M-A from 2008 until death compared to those continuously enrolled in M-FFS and those switching between the two plans. Results indicate that decedents continuously enrolled in M-A had 43% lower odds of dying in hospital compared to those continuously enrolled in M-FFS. Financial incentives in M-A contracts may reduce the odds of dying in hospital.
The Consequences of Health Care Privatization: Evidence from Medicare Advantage Exits