The persistence of medicare advantage spillovers in the post‐Affordable Care Act era

Abstract

Spillovers can arise in markets with multiple purchasers relying on shared producers. Prior studies have found such spillovers in health care, from managed care to nonmanaged care populations—reducing spending and utilization, and improving outcomes, including in Medicare. This study provides the first plausibly causal estimates of such spillovers from Medicare Advantage (MA) to Traditional Medicare (TM) in the post‐Affordable Care Act era using an instrumental variables approach. Controlling for health status and other potential confounders, we estimate that a one percentage point increase in county‐level MA penetration results in a $64 (95% CI: $18 to $110) (0.7%) reduction in standardized per‐enrollee TM spending. We find evidence for reductions in utilization both on the intensive and extensive margins, across a number of health care services. Our results complement and extend prior work that found spillovers from MA to TM in earlier years and under different payment policies than are in place today.

Association of Race and Ethnicity and Medicare Program Type With Ambulatory Care Access and Quality Measures

“…Third, Medicare Advantage plans selectively enter local markets based on favorable conditions related to population health and health services supply, 34 and Medicare Advantage has a restraining effect on health services use that may spill over to the traditional Medicare program in local areas. 35 The use of HRR fixed effects to control for local market differences and adjustment for county-level Medicare Advantage penetration controlled for this, but it does not rule out confounding due to other unobserved factors, and therefore the observed estimates may not imply causal relationships. Fourth, both Medicare Advantage and traditional Medicare are heterogeneous programs.…”

Comparison of Ambulatory Care Access and Quality for Beneficiaries With Disabilities Covered by Medicare Advantage vs Traditional Medicare Insurance

“…The comparisons between MA and TM may be influenced by unobserved variables associated with plan or program enrollment. In comparative studies of MA vs TM, the confounding issues of primary concern include administrative coding bias due to diagnosis upcoding in MA, spillover effects of MA onto TM practice patterns within local areas, strategic MA plan entry and exit in local markets, beneficiary selection into MA vs TM based on health status, availability of other supplemental health insurance, and other factors . In this study, rich patient-reported data supplemented by administrative data were used to control for administrative coding bias (via patient-reported health instead of coded diagnoses), spillover effects (via adjustment for county MA penetration rates), regional differences (via state and hospital market fixed effects), and other beneficiary health insurance, including Medicaid, private insurance, and Part D, that may influence MA vs TM enrollment decisions.…”

Measuring the Scope of Prior Authorization Policies

“…Finally, fee-for-service Medicare was not entirely insulated from prior authorization policies during the study period. Private insurers’ prior authorization policies may have caused spillover effects in fee-for-service Medicare, 33 , 34 , 35 which would have led us to underestimate the scope of these policies. In addition, prior authorization policies were not entirely absent from fee-for-service Medicare during the study period.…”