Managed Medicare and Health Care Quality: Does Enrollment in Medicare Advantage Reduce Potentially Avoidable Hospitalization for Dual Eligible Beneficiaries?

Abstract

Medicare-Medicaid enrollees, or dual eligibles, face significant barriers to care due to their low socioeconomic status. Dual eligibles account for a disproportionate share of Medicare spending but experience worse health outcomes than non-dual Medicare beneficiaries. Policymakers have prioritized value-based care, such as managed Medicare, to contain Medicare costs and improve quality. Since the early 2000s, key policies have incentivized managed Medicare, known as Medicare Advantage (MA), to enhance plan generosity and benefits relative to fee-for-service (FFS) Traditional Medicare (TM). From 2007-2022, non-dual and dual enrollment in MA grew by 150 and 500 percent. Yet, few studies have investigated whether Medicare beneficiaries have better quality outcomes in MA versus TM. My study explores this question by evaluating a key quality measure for outpatient care: potentially avoidable hospitalization (PAH) due to acute and chronic ambulatory care sensitive conditions (ACSC). Duals have consistently high PAH rates, suggesting reduced access to high-quality outpatient care. Utilizing data from the 2017-2019 Medical Expenditure Panel Survey, I do not observe significant differences between MA and TM beneficiaries for PAHs attributed to all ACSCs and chronic ACSCs. MA appears to reduce PAHs due to acute ACSC hospitalizations for duals; the likelihood for acute ACSC hospitalization is 12.5 percentage points lower for duals in MA versus TM. However, in select subgroup analyses, MA duals exhibit higher likelihood for chronic ACSC hospitalizations than TM duals. Overall, PAH differences between MA and TM vary by dual eligibility, race, and health status.