Potential Role of Cost and Quality of Life in Treatment Decisions for Arthritis-Related Knee Pain in African American and Latina Women.

OBJECTIVE: The present study was undertaken to investigate whether Latina and African American women with arthritis-related knee pain and primary care providers who treat them believe their treatment decisions would benefit from having more information about the impact of treatment on their quality of life, medical care costs, and work productivity. METHODS: We conducted 4 focus groups of Latina and African American women over age 45 years who had knee pain. We also conducted 2 focus groups with primary care providers who treated Latina and African American women for knee pain. The participants were recruited from the community. They were asked their opinions about a decision tool that presented information on a range of treatment options and their impacts on quality of life, medical care costs, and work productivity. They were asked whether providing this information would help them make better treatment decisions. We analyzed the focus group transcripts using ATLAS.ti. RESULTS: We found that minority women and primary care providers endorsed the use of a decision-making tool that provided information of the impact of treatment on quality of life, medical care costs, and work productivity. Providers felt that patients would benefit from having the additional information but were concerned about its complexity and some patients' ability to comprehend the information. CONCLUSION: Latina and African American women could make more informed treatment decisions for their knee pain using a decision-making tool that provides them with significant information about how various treatment options may impact their quality of life, medical care costs, and workforce productivity.

Does Medicare Advantage Cost Less Than Traditional Medicare?

The costs of providing benefits to enrollees in private Medicare Advantage (MA) plans are slightly less, on average, than what traditional Medicare spends per beneficiary in the same county. However, MA plans that are able to keep their costs comparatively low are concen­trated in a fairly small number of U.S. counties. In the 25 counties where the cost differences between MA plans and traditional Medicare are largest, MA plans spent a total of $5.2 billion less than what traditional Medicare would have been expected to spend on the same benefi­ciaries, with health maintenance organizations (HMOs) accounting for all of that difference. In the rest of the country, MA plans spent $4.8 billion above the expected costs under tradi­tional Medicare. Broad determinations about the relative efficiency of MA plans and traditional Medicare can therefore be misleading, as they fail to take into account local conditions and individual plans' performance.

Competition Among Medicare's Private Health Plans: Does It Really Exist?

Competition among private Medicare Advantage (MA) plans is seen by some as leading to lower premiums and expanded benefits. But how much competition exists in MA markets? Using a standard measure of market competition, our analysis finds that 97 percent of markets in U.S. counties are highly concentrated and therefore lacking in significant MA plan competition. Competition is considerably lower in rural counties than in urban ones. Even among the 100 counties with the greatest numbers of Medicare beneficiaries, 81 percent do not have competitive MA markets. Market power is concentrated among three nationwide insurance organizations in nearly two-thirds of those 100 counties.

Variations in county-level costs between traditional medicare and medicare advantage have implications for premium support.

Concern about the future growth of Medicare spending has led some in Congress and elsewhere to promote converting Medicare to a "premium support" system. Under premium support, Medicare would provide a "defined contribution" to each Medicare beneficiary to purchase either a Medicare Advantage (MA)-type private health plan or the traditional Medicare public plan. To better understand the implications of such a shift, we compared the average costs per beneficiary of providing Medicare benefits at the county level for traditional Medicare and four types of MA plans. We found that the relative costs of Medicare Advantage and traditional Medicare varied greatly by MA plan type and by geographic location. The costs of health maintenance organization-type plans averaged 7 percent less than those of traditional Medicare, but the costs of the more loosely structured preferred provider organization and private fee-for-service plans averaged 12-18 percent more than those of traditional Medicare. In some counties MA plan costs averaged 28 percent less than costs in traditional Medicare, while in other counties MA plan costs averaged 26 percent more than traditional Medicare costs. Enactment of a Medicare premium-support proposal could trigger cost increases for beneficiaries participating in Medicare Advantage as well as those in traditional Medicare.

The impact of health reform on the Medicare Advantage program: realigning payment with performance.

The Affordable Care Act enacts a new payment system for private health plans available to Medicare beneficiaries through the Medicare Advantage (MA) program. The system, which is being phased in through 2017, aims to (1) reduce the excess pay­ments received by private plans relative to per capita spending in traditional Medicare, and (2) reward plans that earn high performance ratings. Using 2009 data, this issue brief pres­ents analysis of the distributional impact on MA plan payments of these new policies as if they had been fully implemented in that year. We find that, when the polices [sic] are in place, they will bring overall MA plan payments nationwide down from 114 percent to 102 per­cent of what spending would have been for the same enrollees if they had been enrolled in traditional Medicare. While payments will vary across the nation, high-performing MA plans stand to benefit from this new arrangement.