Enrollment in Medicare Advantage linked to lower risks of hospitalizations for patients with Alzheimer’s Disease, Dementia

As healthcare costs continue to rise for millions of older Americans living with Alzheimer’s Disease and related Dementia (ADRD), researchers at the University of Michigan have found that individuals enrolled in Medicare Advantage (MA) have a lower risk of hospitalization, as well as all-cause 30-day hospital readmission, in contrast to those who are enrolled in traditional Medicare (TM).

The researchers cite Alzheimer’s Association statistics that as of 2020, more than 6 million Americans aged 65 and older were living with ADRD. The total costs for caring for these patients is much higher than for those without the conditions -- almost $42,000 per person compared with about $14,000 for people without ADRD. The association estimates that approximately 13 million people will be diagnosed with the disease by 2050.

Associate Professor Elham Mahmoudi, Ph.D., a health economist with the Department of Family Medicine, led a team that has published results of a study in the Journals of Gerontology titled, “Racial/Ethnic Disparities in Hospital Readmission and Frequent Hospitalizations Among Medicare Beneficiaries with Alzheimer’s Disease and Related Dementia: Traditional Medicare vs. Medicare Advantage.” Fellow authors are Sara Margosian, MD, and Paul Lin. All three authors are members of U-M’s Institute for Health Policy & Innovation.

Based on information extracted from TM administrative and commercial claims database (OptumInsight), Mahmoudi et al found that those with TM had higher odds of 30-day hospital readmission and frequent hospitalizations compared to individuals with MA. What’s more, Hispanic and Black enrollees in TM had higher odds of frequent hospitalizations compared with Hispanic and Black MA enrollees. MA enrollment was also associated with lower Hispanic-White and Black-White disparities in frequent hospitalizations by 5.8 and 4.4 percentage points, respectively. Mahmoudi et al characterizes these findings as “significant.”

For 30-day readmission, there was no significant difference between Black enrollees in TM and MA, but Hispanic enrollees in TM had higher odds of readmission than Hispanics in MA. Thus, MA was associated with a lower Hispanic-White disparity in readmission by almost two percentage points.

“Medicare Advantage plans have an incentive to provide more preventative care to prevent situations like hospitalizations and emergency room visits,” Mahmoudi said.

Federally-supported TM features a pay-per-service model and is more expensive for enrollees.  While TM offers the opportunity for patients to visit whatever hospital or health provider they want -- as long as the doctor and/or hospital accepts TM – providers in TM  may not be as incentivized to provide services that may prevent hospitalizations and readmissions in the first place.

MA insurance, offered by private insurers, is modeled on a capitated prospective payment system. There are fewer out-of-pocket costs associated with MA and plans use various ways to increase preventative care, including reimbursement incentives to providers for annual visits, mandated primary care physicians, coordinated provider teams, and chronic disease management programs.

MA plans may also offer more services that can help older patients access healthcare, such as transportation to and from office visits; more proactive efforts to get patients to their follow-up appointments; and typically discharges patients from the hospital to home care. Mahmoudi et al argue that these characteristics may account for the lower rates of hospitalizations and readmissions among those who have MA.

“MA plans may use post-discharge care services more efficiently than TM, plausibly by better matching patients’ needs with the type of post-discharge services,” the authors write. “More coordinated outpatient primary care may also help explain more successful home discharges in MA, as timely primary care follow-up has been associated with lower readmission rates.”

Over the last decade, a large swath of the older population has joined MA – about 45% of all Medicare plan beneficiaries – attributed to more Black and Hispanic populations signing up for the plans.

“MA plans have been more successful in urban, populated areas because they have a better network of providers and facilities,” Mahmoudi said. “MA plans make contracts with providers and can make better contracts to keep costs down,” she said. “There is a vast difference between MA plans in metropolitan areas and in rural areas.”

Mahmoudi notes that navigating the choices between MA and TM – and the various supplemental add-ons like drug coverage and eye and dental care -- is often very confusing for older adults. A downside to MA is that plans can change from year to year, especially with drug coverage. Many individuals should – but often don’t -- review their plans from year to year and sometimes end up surprised by the changes.

The current published study has laid the groundwork for Mahmoudi’s current R01 study, which  examines racial and ethnic disparities in health care and the challenges in insurance plan choices among older people with ADRD. Mahmoudi and her team are also gathering qualitative data from people who are currently navigating the Medicare insurance landscape to understand their challenges in choosing the best plan for their needs.

“We know that the rate of adverse health events among people who are Black and Hispanic and among those with lower health literacy is higher,” she said. “How can we simplify insurance plans for (them) to make it easier for them to choose a plan that is right for them? That is the goal of this research.

“There are large variations among different MA plans,” Mahmoudi added. “It is critical to understand which Medicare option is more beneficial for older adults with different health needs and simplifying the decision-making process for them to choose the optimal health plan.”

Article citation: Mahmoudi, E., Margosian, S., & Lin, P. (2024, May 11). Racial/ethnic disparities in hospital readmission and frequent hospitalizations among Medicare beneficiaries with alzheimer’s disease and related dementia: Traditional Medicare vs. Medicare advantage. The Journals of Gerontology Series B. https://academic.oup.com/psychsocgerontology/advance-article-abstract/doi/10.1093/geronb/gbae078/7668625