Medicare Advantage Must Boost Health – and Fiscal Responsibility

Medicare Advantage Must Boost Health – and Fiscal Responsibility
Medicare Advantage Must Boost Health – and Fiscal Responsibility


Medicare Advantage has been getting a bad rap in Washington lately, but the program offers the best chance to rein in runaway spending in an industry that has focused too much on sick care instead of true health care.

This spring the Biden administration set off one of the fiercest lobbying campaigns in years by proposing an overhaul to Medicare Advantage programs that now cover about half of all seniors — more than 30 million Americans – at an annual cost of $427 billion. By 2032, the Congressional Budget Office projects the percentage of seniors in Medicare Advantage will rise to 61 percent.

Much recent political interest honed in on a Health and Human Services report that found as much as $15 billion a year of overpayments to Medicare Advantage providers. Audits found many cases of apparent upcoding – billing for illnesses or conditions that the plan providers’ medical records could not support.

Let there be no doubt – paperwork mistakes and billing abuses harm the integrity of the healthcare system and should be dealt with swiftly and decisively. The hustlers who maximize payment through coding, without improving service and results for patients, should be ashamed – and punished.

At the same time, though, it would be a costly mistake to hamstring the whole Medicare Advantage system because of problems caused by a few.

It’s key to remember why so many consumers, businesses, and policy leaders favor Medicare Advantage in the first place: This is one of the first major programs that offers financial incentives for customer wellness instead of sickness.

For too long we have relied on a system that is hospital-centric and reactive to health problems. Medical providers are rewarded for patient volume, not patient outcomes. Keep the heads in beds, churn the tests, and reward providers for procedures – that’s how to make money in the medical business.

That’s also how our country spends an exorbitant 18 percent of our GDP on medical care. We spend nearly twice as much on healthcare as other advanced countries and get worse results.

Our runaway medical spending is not good for patients or taxpayers. And it’s not sustainable.

Done properly, Medicare Advantage should produce lower costs to taxpayers and better outcomes for patients. It forces providers to put their own skin in the game – they are on the hook for the overall health of the customer. So the financial incentive is to invest in the wellness and preventive care that keeps people healthy, as opposed to the traditional churn of tests and surgeries and reactive treatments that currently pay the bills of so many providers.

There should be no controversy here: It’s always cheaper and more effective to pay for smoking cessation and anti-obesity programs than for lung cancer surgeries and heart attack emergency care.

Unfortunately, the economic incentives of our current healthcare system reward medical procedures over prevention. We all know the priorities are backward, but entrenched economic interests have been blocking real and needed policy change.

By forcing providers to coordinate and take responsibility for the overall health of customers, Medicare Advantage can promote the healthcare change we need. It’s a philosophical shift that makes providers think more like insurers and less like businesses that are rewarded for volume, not results.

Our own Minnesota senior care company is proof that it can work. Since our shift to value-based healthcare, we’ve seen a 43 percent reduction in hospital admissions for our members and a 24 percent reduction in emergency room visits. Admissions to skilled nursing facilities have been cut almost in half. At the same time, our net promoter score, which measures customer satisfaction, stands at 93 out of 100 — nearly triple the overall healthcare industry score of 38.

There’s evidence that Medicare Advantage is working elsewhere, too. A national health study that compared results from 1.5 million Medicare Advantage beneficiaries against 1.2 million traditional fee-for-service Medicare patients found that Medicare Advantage patients had 23% fewer inpatient stays and 33% fewer emergency room visits. It also found MA beneficiaries “received more preventive physician tests and services, while FFS Medicare beneficiaries had more inpatient stays and outpatient/emergency care services.”

Nobody is claiming that Medicare Advantage can perform miracles of either health or economics. But it does provide the incentives to move us in the right direction. Consumers typically get more benefits, such as included dental and vision care, and lower out-of-pocket costs. Taxpayers get more accountability and fiscal responsibility from providers. And medical businesses get incentives to keep customers healthy and happy.

It’s time for health systems to view customers holistically as people, not as a collection of medical procedures with potentially lucrative bills attached. Medicare Advantage should push us to look at health, not just sickness, and the result should certainly be an improvement over what we have now.



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