Study Finds Reasons for Differences in Cost and Savings in Medicare Programs Not Yet Defined

A recent study published in the Journal of the American Medical Association Network Open explored differences in spending among Medicare Advantage (MA) and Medicare Shared Savings Program (MSSP) participants. This was a retrospective study of data from MA and MSSP beneficiaries at Ochsner Health, co-authored by Eboni Price-Haywood, MD, System Medical Director – Healthy State, Ochsner Health and Medical Director, Ochsner Xavier Institute for Health Equity & Research.

The objective of the study was to examine the difference in spending and utilization between the two Medicare programs and determine if increased spend could be attributed to measurable factors. It has long been acknowledged that differences likely exist; however, the root cause of the variance has yet to be identified.

“The unproven explanation for probable spending variances between the two Medicare plans for years has been demographic and clinical differences,” says Dr. Price-Haywood. “For this study, we worked with a group of economic analysists to develop a plan to review potential cost and savings differences between the two types of populations and determine if these differences can be measured and explained.”

Medicare claims and electronic health record (EHR) data from Ochsner Health between January 2014 to December 2018 were analyzed. In total, 15,763 data records were examined, including 12,720 MA and 3,043 MSSP beneficiaries. The study design identified beneficiaries with similar clinical characteristics and created four cohorts based on common, high-cost diseases – hypertension, diabetes, congestive heart failure, and chronic kidney disease. The study also examined practice patterns and quality of care to ensure consistency across both plans, as well as reviewed demographic characteristics, clinical variables, and socioeconomic variables.

After analyzing data between January 2015 and May 2022, the study authors concluded that MA and MSSP beneficiaries in all four cohorts differed in several areas. MA beneficiaries were more likely to be older, white males, and were less likely than MSSP beneficiaries to be disabled, qualify for Medicaid, and live in a low-income zip code. As well, outpatient hospital spending contributed significantly to the higher MSSP spend and inpatient spending in all four cohorts was higher for MSSP. Additionally, primary care spending was significantly lower for MSSP beneficiaries in three of the four cohorts.

Overall, the study found that the average per member per year (PMPY) spending was 22% to 26% higher for MSSP beneficiaries compared to MA beneficiaries. This difference was largely attributed to hospital outpatient spending for MSSP beneficiaries. Practice patterns and quality of care were similar across both groups, and clinical and socioeconomic factors were well accounted for. Despite properly addressing all potential variances, the study was not able to explain the root cause for greater spending among MSSP beneficiaries.

“I think many lessons are learned from this study of data. We must look at how to equalize the design of both programs so that regardless of which plan a beneficiary chooses, the level and quality of care is the same, and we’re meeting the needs of all patients,” said Dr. Price-Haywood. “More work needs to be done to measure and explain the behavior pattern differences seen between these two population groups. Some may be related to demographic or social determinants of health.”