Evaluating Quality and Cost Between Medicare Advantage & Traditional Medicare

By | March 24, 2023

With enrollment in the Medicare Advantage (MA) program continuing to rise and nearly 50% of all Medicare eligible beneficiaries participating in an MA product, now is the time to evaluate the program’s benefits and possible unintended consequences.


A recent study by Landon et al., published in the Journal of the American Medical Association, compared the two programs concerning 30-day mortality among patients with Acute Myocardial Infarction.  And their finding is compelling. They evaluated the different outcomes that occurred based on insurance plan design. Interestingly, they discovered that over ten years, the rates of 30-day mortality between the programs were the same at the end of the ten years.

These results are significant since the MA patients’ treatment occurred less resource-intensively, with a lower likelihood of being admitted to the intensive care unit, fewer hospital transfers, and a higher probability of being discharged home than to a post-acute care facility. The nature of this retrospective study leads to more questions but knowing that the mortality rates were the same is significant.

One of the benefits of this information is helping to identify not only what is beneficial, but also what types of services aren’t? We also need to continuously evaluate the impact of care to determine what is clinically most beneficial and the implications on cost. Cost is an essential component in the context of a fixed amount of spending that can occur without causing other issues within the financial health of our society.

Interestingly, though the quality of care is seemingly equal between the two groups, the level of services was different. In this case, how are these savings passed through to the payers, the tax-paying citizens? For our learnings to be genuinely beneficial for the overall financial and clinical health of all, we must find ways to decrease costs while simultaneously improving care in a manner that the average citizen feels. Otherwise, we merely move the dollars around without impacting the Medicare Trust Fund.

The good news, however is that MA is a model that delivers services that consumers desire, resulting in similar quality outcomes in a manner that utilizes fewer services. Now we need to identify ways these factors translate into a lower cost for those saddled with the payments as we witness the total cost of care decrease for the MA beneficiaries. If it becomes less expensive for the individual member but the cost increases for the program overall, we must run the math to see if this distribution of costs is better or worse from a financial perspective.

Understanding the complexity of both cost and care and the relationships between them is paramount for us on our continued journey of healthcare reform.