Medicare Advantage Value-Based Care: Enhanced Health Outcomes


Alongside its positive impact on health outcomes, the Medicare Advantage value-based care plans implemented by an insurance provider resulted in a significant $8 billion in cost savings throughout 2022. Reports from the payer revealed that Medicare Advantage beneficiaries under value-based care exhibited improved health conditions, marked by reduced inpatient admissions and emergency room visits.

The insurance provider’s annual tenth report on value-based care underscores the substantial enhancements in the healthcare journey for both beneficiaries and providers. According to the Chief Medical Officer at the insurance provider, the effectiveness of value-based care is evident. This innovative healthcare approach not only betters outcomes for Medicare Advantage members but also empowers primary care physicians to elevate their practice and foster deeper connections with patients.

During 2022, an impressive 70% of individual Medicare Advantage plan members were aligned with value-based care providers. This alignment translated to higher rates of preventive screenings among beneficiaries, ranging between 3% and 11% more than those not under such arrangements. Notably, for screenings requiring seamless coordination across providers, the rate was notably elevated, ranging between 8% and 11% higher for those engaged in value-based care models.

Medicare Advantage beneficiaries engaged in value-based care demonstrated higher adherence to medications for conditions such as diabetes and hypertension. Those receiving care through this model reported a more positive experience compared to counterparts in non-value-based care. Providers within value-based systems received a higher CAHPS score of 3.9, suggesting improved patient satisfaction attributed to increased provider-patient interaction and enhanced care coordination.

Moreover, beneficiaries participating in value-based arrangements exhibited a greater likelihood of visiting their primary care physician in 2022, with an 85 percent visitation rate compared to 75 percent among non-value-based beneficiaries. Notably, individuals in value-based care experienced a substantial reduction in inpatient admissions, with 30.1 percent fewer admissions compared to traditional Medicare, resulting in 214,000 saved admissions in 2022. Similarly, when contrasted with non-value-based Medicare Advantage beneficiaries, there were 7.1 percent fewer admissions among those in value-based care.

Further emphasizing the benefits, Medicare Advantage beneficiaries in value-based arrangements had 12.7 percent fewer emergency room visits compared to non-value-based beneficiaries, amounting to 146,000 fewer visits.

Medicare Advantage beneficiaries witnessed reduced instances of low-value care compared to those in traditional Medicare. This included notable decreases in unnecessary surgeries (-30 percent), unnecessary diagnostic and preventive testing (-24 percent), unnecessary imaging (-10 percent), unnecessary pre-operative testing (-6 percent), and unnecessary cardiovascular testing and procedures (-5 percent).

Beyond just enhancing health outcomes, the value-based care plan under Medicare Advantage generated substantial cost savings for the insurance provider. These savings amounted to a significant 23.2 percent in 2022 when contrasted with traditional Medicare, resulting in a substantial $8 billion in cost reduction. The insurer reinvested these savings into member benefits, such as reduced premiums, home care services, prescription delivery, and provision of healthy food cards, as highlighted in the report.

Approximately half of the providers engaged in the insurer’s value-based care plan received shared savings payments in 2022. Moreover, these participating providers received a larger share of the overall healthcare expenditure in medical claims and various payments like capitation, bonuses, and surplus payments compared to non-value-based providers (16 cents versus 6.5 cents).

Providers involved in value-based care earned significantly higher than the Medicare physician fee schedule, with those in more advanced risk stages earning six times the fee schedule amount, marking a substantial advancement.

The impact of value-based care extended to the insurer’s Medicaid plans in Florida, showcasing improved compliance with HEDIS performance measures. This included better management of high blood pressure, hemoglobin A1C control, cervical cancer screenings, and child and adolescent well-care visits. Notably, Medicaid plans with higher penetration of value-based care exhibited lower disparity scores compared to Medicaid fee-for-service plans, indicating improved health equity.

While efforts in value-based care have primarily focused on commercial and Medicare Advantage populations, the report suggested significant potential benefits for underserved and vulnerable beneficiaries within Medicaid.