Source: AHIP
Medicare Advantage (MA) delivers superior value for the more than 35 million seniors and people with disabilities who choose it over fee-for-service Medicare (FFS). A new peer-reviewed study shows that MA’s positive impact extends even further, helping lower costs for FFS Medicare.
- A new study in the Journal of Health Politics, Policy and Law finds that increased MA enrollment is associated with statistically significant lower spending in FFS — a spillover effect that can help strengthen Medicare’s long-term sustainability.
This new peer-reviewed study finds MA generates broader Medicare savings primarily through reduced use of potentially unnecessary outpatient services, tests, imaging, procedures, durable medical equipment and ambulance services without impacts to inpatient care. The authors note that outpatient spending “has exhibited substantial growth in [FFS Medicare] over the 2014 to 2022 period and is likely a main area where effective care management practices could reduce spending.” The findings reinforce the importance of effective MA practices that produce efficiencies and reduce wasteful and low value services.
By The Numbers:
The study found a 10-percentage-point increase in county Medicare Advantage enrollment was associated with reduced spending of $132 per beneficiary or 1.3% – 2.0% after adjusting for local prices and beneficiary risk. This shows cost savings attributable to reduced utilization as providers adopt practices in FFS that they use in MA.
