Mid-summer is a busy time, between barbecues, baseball, the beach and, this year, the Olympics. But there’s always time for our take on the latest health spending research. This month we revisit the performance metrics tied to Medicare Advantage as well as evaluate the power of financial incentives when it comes to encouraging patients to receive needed care and medications.

Digging Deeper

How Advantageous is Medicare Advantage?

Since 2010, Medicare Advantage (MA) enrollment has doubled, and now more than one-third of all Medicare beneficiaries are enrolled in a MA plan. A recent Health Affairs study examines how successful these plans are at lowering spending and reducing hospital visits. After conducting a systematic review of existing evidence, the authors found MA plans did result in more preventive care visits, fewer hospital admissions and shorter hospital and nursing facility length-of-stays. However, other metrics like patient experience, mortality, racial disparities, and most important, readmission rates, did not show a trend of better performance.

Why it Matters:

As we have previously discussed, on the surface, MA plans can seem like a simple solution to curbing low-value care, lowering health spending and reducing hospitalizations. But when we unpack our existing evidence, we find MA plans fall well short of being a magic bullet solution. Given the growth over the last decade, MA plans are likely to remain popular with insurers and beneficiaries. That means we should continue to evaluate the evidence to make sure these plans are serving the needs of patients and eliminating low-value care.

Reprioritizing Patients’ Costs

Reducing overall health system spending is a laudable goal, but we must also keep in mind the specific burden patients face in rising out-of-pocket costs for care and medications. These financial barriers can make it harder for patients to access essential treatments, which means worse individual health outcomes and an increase in overall care costs as patients get sicker. Recently, evidence has shown some interventions can work to mitigate patients’ financial burden. In a study published in the Journal of Managed Care and Specialty Pharmacy, researchers found that financial medication assistance, including patient assistance programs and copay cards, can improve medication adherence.

In a separate literature review, researchers found utilization for preventative services like cancer screenings and contraceptives increased when cost-sharing was reduced for patients. The findings were even more significant in studies that included socioeconomic data, showing that lower-income patients saw substantial increases in high-value primary care when the financial consequences to seeking that care was reduced.

Why it Matters:

We know that the out-of-pocket cost of care impacts patient access and ultimately their health care outcomes. In these studies, when given the means to do so, patients took advantage of financial aid or cost-sharing reductions to access care or medications. These studies illustrate that many patients need financial help with out-of-pocket costs and that financial incentives can steer patients towards high-value care.

What We’re Reading

Barron M, Mishra V, Lloyd S, Augenstein J. How to Measure the Value of Virtual Health Care. Harvard Business Review, June 24, 2021
With the rapid growth in telehealth in the wake of the pandemic, it is important to understand the value that these services provide. The American Medical Association and Manatt Health developed a framework for assessing the value of digitally enabled care, which can be used for payers to inform coverage decisions and policymakers to develop evidence-based regulations. The model accounts for how virtual care programs may increase the overall “return on health” by generating benefits for patients, clinicians, payers and society going forward.

Dialogues on Health Spending

Going Below The Surface Forum partners are leading conversations about health care spending, with some in-person events planned for early fall. Check out the listings below for opportunities to take part in the dialogue.