Private Medicare Plans and Health Outcomes for Older Adults

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Although enrollment in private Medicare plans has risen from 12.8% in 2004 to 37.5% in 2019, the health consequences of large numbers of older Americans enrolling in these plans are not clear. This is of particular concern for high-risk patients, people with selected chronic conditions that place them at higher risk of adverse outcomes. Private Medicare plans are typically managed care plans that receive a capitated payment for each plan enrollee and therefore face financial incentives to control costs. Although high-risk patients could potentially benefit if some private Medicare plans are able to improve health outcomes through care coordination or by steering patients to high-quality health care providers, they could also be adversely impacted if some private Medicare plans achieve cost savings by reducing provision of necessary or preventive care. This Career Development Award proposal, “Private Medicare Plans and Health Outcomes for Older Adults,” focuses on leveraging new data—from private Medicare encounter claims, a state all-payer claims database, and the private Medicare risk adjustment system—in order to better understand how private Medicare plans impact health outcomes for older adults, particularly among high-risk patients. This work will focus on evaluating the performance of specific private Medicare plans—as opposed to evaluating private Medicare plans as a whole—something made possible by the recent availability of comprehensive health care claims data from private Medicare plans. Examining plan-specific effects will allow for a more complete understanding of whether there are specialized private Medicare plans that can improve health outcomes for high-risk patients. The research aims encompass three areas: 1) estimating plan-specific effects of private Medicare plans on quality of care and patient outcomes, 2) evaluating the performance of private Medicare plans that specialize in improving health outcomes for high-risk patients, and 3) using prediction methods to quantify the potential for favorable selection by private Medicare plans. This work will make use of quasi- experimental methods to estimate whether enrollment in specific private Medicare plans is associated with better health outcomes; for example, by studying patients who transition from an employer- sponsored plan to a private Medicare plan, or patients who switch from traditional Medicare to a private Medicare plan. This award will also support additional training toward three career goals that support the research aims: 1) developing expertise in measurement of health care quality and improvement of patient outcomes, 2) acquiring knowledge of clinical management of high-risk patients, and 3) building skills in statistical methods used for prediction and modeling health outcomes. These goals will be achieved through coursework, mentorship, seminars, and research, among a highly productive group of health economics and health policy scholars at a leading institution.