Health Policy$ense

Costs and Outcomes for Patients with Dementia in Medicare Advantage Plans

New Studies Fill in the Gaps

How do patients with Alzheimer's disease and related dementias (ADRD) fare in capitated Medicare Advantage (MA) managed care plans, compared to their peers in traditional Medicare (TM)? This question is increasingly important, as nearly one-third of beneficiaries now choose MA, and the human and financial cost of living with ADRD is substantial.

Norma Coe, PhD, at the Leonard Davis Institute of Health Economics
Norma B. Coe, PhD, is an LDI Senior Fellow and Associate Professor of Medical Ethics and Health Policy at the Perelman School of Medicine.

Until recently, we knew little about costs, health care utilization, and outcomes for patients with ADRD in MA plans. We also had little evidence to help us navigate between competing visions of MA plans as providing cost-effective, coordinated care, and MA plans as reducing care and avoiding the highest cost, most complex patients. Recent studies by Norma Coe and colleagues are filling in these gaps—and the results look positive for MA plans.

In one descriptive analysis, Coe’s team tracked the “switching” behavior of Medicare beneficiaries after a new ADRD diagnosis. In this small study, TM beneficiaries were more likely to switch to MA plans in the subsequent 2-3 years, while MA beneficiaries were more likely to stay in MA plans. This suggests that patients with ADRD and their families are voting with their feet…away from traditional Medicare and toward managed care plans.

The team then conducted a longitudinal study of 47,000 patients with ADRD from 2010-2016, comparing MA and TM beneficiaries in terms of utilization and outcomes. Even after accounting for potential differences in people who enroll in MA vs. TM, MA beneficiaries had lower utilization across the board, including an average of 22.3 fewer medical practitioner visits, 2.3 fewer outpatient hospital visits, and fewer inpatient hospital and long-term care admissions. The study detected no or negligible differences in satisfaction with care or self-reported health status. These findings suggest that MA plans may be delivering health care more efficiently than TM, possibly through better coordination of care for beneficiaries with ADRD.

TM beneficiaries may benefit from MA even without enrolling in them directly. In a recent study, Coe and colleagues found that the growth in MA plan penetration is associated with lower per-capita spending in TM, especially among individuals with a high comorbidity burden, including beneficiaries with ADRD.

In terms of costs for these beneficiaries, we know about the trajectory of spending for patients with traditional Medicare; in a previous study, Coe and colleagues estimated five-year incremental costs of $15,704 attributable to ADRD. How does this compare to spending for patients with ADRD in MA plans? We don’t yet know, but stay tuned… that is the next project on the horizon.