Medicare Advantage: Value-Based Care Reduces Hospitalizations, Study

Excerpts from a study.


Humana’s Chief Medical Officer, William Shrank, MD, MSHS, co-wrote a study in March (published by JAMA)  titled “Analysis of Value-Based Payment and Acute Care Use Among Medicare Advantage Beneficiaries.” (Gondi S, Li Y, Drzayich Antol D, Boudreau E, Shrank WH, Powers BW. Analysis of Value-Based Payment and Acute Care Use Among Medicare Advantage Beneficiaries. JAMA Netw Open. 2022;5(3):e222916. doi:10.1001/jamanetworkopen.2022.2916)


Analysis of Value-Based Payment and Acute Care Use Among Medicare Advantage Beneficiaries - gondi_2022

It is a very quick read, but here’s the highlight reel:


Downside Risk vs. Fee For Service

“Compared with FFS, beneficiaries cared for under 2-sided risk models had lower rates of hospitalizations, observation stays, and ED visits.”


“Compared with FFS, 2-sided risk models were associated with a 15.6% (95% CI, 14.2%-17.0%) relative reduction in avoidable hospitalizations, compared with 4.2% (3.4%-4.9%) for all-cause hospitalizations (Figure).”


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Upside Risk vs. Fee For Service

“For all outcomes, there was no significant difference in acute care use between beneficiaries cared for under upside-only risk models and FFS.”


Further Discussion

“In this study of MA beneficiaries, advanced value-based payment arrangements (ie, 2-sided risk models) were associated with lower rates of acute care use, especially those events that are potentially avoidable. These findings are consistent with evaluations of value-based payment in traditional Medicare and serve to expand the evidence base around value-based payment models in Medicare Advantage.1 The lack of significant differences between FFS and upside-only risk models suggests that downside financial risk may play a key role in effective value-based payment arrangements.”


This study had limitations. 

Stephen Kemble, MD (Queen’s Medical Center, Honolulu) and Gordon Moore, MD, MPH (Professor of Population Medicine, Harvard Medical School, Boston, MA) both brought up valid concerns in the comments section, calling out the potential for selection bias, and even asserting that the study does not answer the question it purports to address.


Obviously, there is more to learn. But what do you think? Is the data telling you that downside risk decreases avoidable hospitalizations? Or is something else at play? And if so, what do you think it is?

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