Insights

How best practices in Medicare Advantage can modernize Medicare

By: 
Doug Holtz-Eakin, PhD

The U.S. Chamber of Commerce recently hosted its 4th Annual Health Care Summit, “Optimizing the Next Generation of Health Care,” to discuss various ways to improve the U.S. health care system. I was honored to participate in a panel discussion on best practices in Medicare Advantage (MA), along with Kevin Cammarata, Executive Director, Benefits, Verizon; Dr. Gary Puckrein, President and CEO, National Minority Quality Forum; and Chester Speed, Vice President, Public Policy, American Medical Group Association. Our discussion, moderated by Lambert Van der Walde, Executive Director of UnitedHealth Group’s Center for Health Reform & Modernization, focused on the aspects of MA that drive efficient, value-based care, improve patient outcomes, and increase quality of care for Medicare beneficiaries.
 
This year, Congress and the administration advanced reforms and initiatives to address traditional Medicare’s flawed, fee-for-service payment system. Fee-for-service does not incentivize better care; it incentives more care. In comparison, Medicare Advantage has a long history of providing beneficiaries with high-quality, high-value, coordinated care. Over 17 million seniors and individuals are currently enrolled in MA plans, and enrollment is expected to reach 22 million by 2020, according to the Congressional Budget Office.[1] During the panel discussion, each speaker shared a “best practice” or lesson from MA for traditional Medicare to consider as it shifts towards a more value-based system.  
 
The American Medical Group Association (AMGA)’s Chet Speed emphasized MA’s alignment of care, quality, and value. Mr. Speed noted that when a beneficiary in MA is discharged from the hospital, he or she is assigned a discharge planner. The planner ensures that each of the patient’s touchpoints after discharge – including pharmacists, primary care physicians or other providers – are aligned with the patient’s unique care management plan. This helps ensure an efficient recovery, avoids the costs and consequences of duplicative care, and prevents future hospital readmission. Mr. Speed also noted that over 25 percent of AMGA’s physician group members contract with MA due to its alignment with high-value, high-quality care.
 
In addition, Verizon’s Kevin Cammarata underscored the higher quality care and satisfaction Verizon retirees experience in Medicare Advantage plans. When Verizon switched from traditional Medicare to MA, the company’s beneficiary population saw an 8 percent reduction in acute hospital readmissions. It also saw greater program engagement and an increased utilization of preventive services by enrollees – 70 percent of company beneficiaries took a health risk assessment after enrolling in MA plans. In fact, Medicare Advantage’s focus on prevention is particularly important for beneficiaries with chronic conditions.
 
By 2020, 81 million seniors are expected to have multiple chronic conditions.[2] As noted by Dr. Gary Puckrein of the National Minority Quality Forum, the “one-size-fits-all” approach of traditional Medicare does not address the complex needs of today’s aging population. Thirty percent of Medicare beneficiaries have diabetes, and among those with diabetes, 60 percent experience a hospital encounter every year in the form of an inpatient stay or emergency room visit.[3] Even though 58 percent of Medicare’s budget is spent on chronic care, traditional, fee-for-service Medicare has no effective program to address chronic conditions.  However, MA plans provide beneficiaries with more coordinated care and chronic disease management programs – like the Diabetes Prevention Program – which are designed specifically for the chronically ill.
 
By 2030, the hospital portion of traditional Medicare is projected to reach financial insolvency without significant reforms to improve patient outcomes and lower costs. That same year, 76 million additional baby boomers will reach age 65.[4] While the program has already taken steps to deliver more value-based care to ensure its sustainable future, there is a need for broader reform. Looking ahead, Medicare Advantage provides an excellent model for traditional Medicare to follow in the transition towards a more value-based health care system.


[1] http://kff.org/medicare/perspective/medicare-advantage-take-another-look/

[2] http://www.bemedicinesmart.org/MCC_Fact_Sheet.pdf

[3] https://www.cms.gov/research-statistics-data-and-systems/statistics-trends-and-reports/chronic-conditions/downloads/2012chartbook.pdf

[4] http://www.gao.gov/new.items/d02544t.pdf

 

Date: 
Thursday, November 12, 2015