How do the experiences of Medicare beneficiary subgroups differ between managed care and original Medicare

The Institute of Medicine and the National Academy of Sciences have identified the reduction of disparities in health care quality by race, ethnicity, and socioeconomic status as an important priority of U.S. Health Policy (Institute of Medicine 2002; National Research Council 2004;). Seniors and the disabled have high health care needs and may be particularly susceptible to low-quality health care, so examination of disparities among Medicare beneficiaries is of particular interest. Medicare beneficiaries can choose the fee-for-service (FFS) program, in which a majority of beneficiaries are enrolled, either with or without a freestanding prescription drug plan (Part D). Alternatively, beneficiaries can enroll in a Medicare Advantage (MA) plan, the managed care form of Medicare whereby several hundred managed care plans are under contract with Centers for Medicare and Medicaid Services, with or without a prescription drug option. These various Medicare options have basic structural differences that could result in quite different experiences for beneficiaries obtaining care within each option. For example, in FFS Medicare, beneficiaries are free to choose their own physicians and other providers, but they also are solely responsible for navigating the health care system. Enrollees in the MA plans may have broader benefits at lower costs, but they may be constrained in their provider choices and health care options. Further, given the diversity of the MA plan offerings, beneficiaries may have quite different experiences depending on the plans they choose. In what follows, we use “FFS” to refer to those beneficiaries not enrolled in an MA plan, irrespective of whether they belong to a freestanding prescription drug plan. Characteristics such as lower socioeconomic status (including income and educational attainment), poor health status, older age, black race, and Hispanic ethnicity have been associated with problems related to health care insurance and access (Shi 2000), and as such they can be considered “vulnerable” (Blumenthal et al. 1995). In this study we analyze these characteristics, as well as gender, and assess the extent to which they are associated with relatively more negative experiences in MA relative to FFS. Evidence of disparities in both clinical process and patient experiences of care are well documented in the Medicare population (Morales et al. 2001; Institute of Medicine 2002; Lurie et al. 2003; Weech-Maldonado et al. 2003; Trivedi et al. 2005; Trivedi et al. 2006; Fongwa et al. 2008; Weech-Maldonado et al. 2008; Goldstein et al. 2010;). There is evidence that disparities in health care for Medicare beneficiaries may vary by plan and coverage type. For example, 2002–2004 black versus white disparities in HEDIS measures have been shown to vary by MA plan (Trivedi et al. 2006). Analyses of data from the Medicare Consumer Assessment of Health Care Providers and Systems (CAHPS) survey have found more negative patient experience reports in MA plans than in FFS Medicare (Landon et al. 2004), especially for unhealthy beneficiaries (Keenan et al. 2009). These findings raise the question of whether there may systematically be greater disparities in care in MA than FFS across a range of other beneficiary characteristics indicating potential vulnerability. Findings regarding differential disparities in access to care are mixed; Balsa et al. (2007) found few differences in black–white disparities in access for Medicare beneficiaries in 1996–2001 data between managed care and FFS, but they found evidence of smaller Hispanic-white disparities in access in managed care. In the present manuscript we explore the extent to which disparities differ between MA and FFS coverage across a broader set of beneficiary characteristics. We also propose two hypotheses for why there might be greater health care disparities in MA than in FFS, and we use varying predictions across beneficiary characteristics to evaluate these hypotheses. The financial incentive hypothesis holds that managed care plans, financially incentivized to recruit less costly beneficiaries, create environments that provide relatively positive experiences for lower-costs groups, and relatively less positive experiences for high-costs groups when compared with FFS. Frank et al. (2000) and Keenan et al. (2010) describe possible managed care responses to these financial incentives in terms of underprovision of care to avoid “bad risk,” for example, sicker patients, and overprovision of services used to treat the less-seriously ill, thereby attracting “good risk.” Accordingly, MA plans may emphasize preventative or active wellness programs that may be more appealing to healthy beneficiaries. Managed care plans might also emphasize lower-cost services, such as physical therapy, and promote access to nutritionists and pharmacists rather than physicians. While these might be effective approaches for those in good health, they may not satisfy the needs of sicker patients. This hypothesis would predict larger disparities in MA than FFS for subgroups with higher expected average costs, such as older beneficiaries, less healthy beneficiaries, and women (Woolhandler and Himmelstein 2007; Owens 2008;). The health literacy hypothesis holds that care within MA varies more across the identified subgroups than it does in FFS because on average, more negotiation is required in MA than FFS for patients to obtain services. That is, even when there are standard procedures for obtaining services for all patients, following those procedures and/or obtaining exemptions to restrictions may require more skill in MA than FFS. We posit that such skills are related to literacy and patient activation, which vary with characteristics such as age, education, race/ethnicity, and English fluency, and which have been strongly linked to patient experience (Heller et al. 2009; Martin et al. 2009;). Thus, there should be more variability across groups in MA than in FFS. Under this hypothesis we would expect to see greater health disparities for groups with lower average health literacy, groups with lower educational attainment, lower income, blacks, and Hispanics. Because women typically have higher health literacy and patient activation than men (Heller et al. 2009; Martin et al. 2009;), this hypothesis predicts relatively better experiences for women than men within MA than within FFS, unlike the financial incentive hypothesis. In this study, we investigate disparities in beneficiary assessments of their health care using data from a recent (2007) CAHPS survey of Medicare beneficiaries. The Medicare CAHPS survey is the primary means of assessing care experiences of the 44 million Medicare beneficiaries (Goldstein et al. 2001). The 2007 data include measures of beneficiary experiences with their general health care and health insurance (Medicare Part C) as well as measures of beneficiary experiences with prescription drug coverage (Medicare Part D). We assess the extent to which the earlier finding of greater disparities by health status in MA than in FFS persists and whether there are similar patterns for other groups of potentially vulnerable beneficiaries defined by characteristics such as age, gender, race, and socioeconomic status.