Study: Value-Based Medicare Advantage Plans Deliver Better Care at a Lower Cost

• by Christian Worstell
• July 17, 2023

A new study shows that Humana’s shift from a fee-for-service to a value-based care model for its Medicare Advantage plans is paying off.

The internal study concluded that the shift to focusing on value over volume is responsible for reducing costs for Humana’s Medicare Advantage members and improving the quality of care they receive.

For seniors enrolled in Humana Medicare Advantage plans, medical costs were found to be nearly 16 percent lower for members of value-based plans as opposed to members of fee-for-service models.

Value-based care vs. fee-for-service

The fee-for-service model has been a health insurance standard practice for years. In a fee-for-service model, patient bills are unbundled so that each item, test or service they receive is billed separately as an individual charge.

A value-based care model, which is gaining popularity, ties payments to the quality of care given and rewards health care providers for efficiency and effectiveness. Under the value-based model, health care providers can be reimbursed for additional pay if they meet certain quality measures, control costs and improve the health of their patients.

The study published by Humana examined approximately 1.5 million beneficiaries of Humana’s value-based Medicare Advantage plans alongside around 146,000 members of Humana’s traditional fee-for-service plans.

Not only were overall health care costs lower for beneficiaries in Humana value-based plans, but members of value-based care plans also experienced 7 percent fewer visits to the emergency room and 5 percent fewer hospital admissions.

Medicare Advantage plans and the value-based care model

Medicare Advantage plans (Medicare Part C) are an alternative way to receive Original Medicare benefits (Medicare Part A and Part B) under one privately-sold plan. One of the benefits of Medicare Advantage plans is that many plans may offer coverage not offered by Original Medicare.

According to the Kaiser Family Foundation, there are around 3,700 Medicare Advantage plans available for sale in 2019, up nearly 20 percent from 2018.

When Medicare Advantage plans began to rise in popularity in the mid-2000’s, they generally followed the same fee-for-service model used by Original Medicare. But in recent years, many plans have moved towards a value-based care model.

Read additional medicare costs guides to learn more about Medicare costs and how they will affect you.

About the author

Christian Worstell is a senior Medicare and health insurance writer with MedicareAdvantage.com. He is also a licensed health insurance agent. Christian is well-known in the insurance industry for the thousands of educational articles he’s written, helping Americans better understand their health insurance and Medicare coverage.

Christian’s work as a Medicare expert has appeared in several top-tier and trade news outlets including Forbes, MarketWatch, WebMD and Yahoo! Finance.

Christian has written hundreds of articles for MedicareAvantage.com that teach Medicare beneficiaries the best practices for navigating Medicare. His articles are read by thousands of older Americans each month. By better understanding their health care coverage, readers may hopefully learn how to limit their out-of-pocket Medicare spending and access quality medical care.

Christian’s passion for his role stems from his desire to make a difference in the senior community. He strongly believes that the more beneficiaries know about their Medicare coverage, the better their overall health and wellness is as a result.

A current resident of Raleigh, Christian is a graduate of Shippensburg University with a bachelor’s degree in journalism.

If you’re a member of the media looking to connect with Christian, please don’t hesitate to email our public relations team at Mike@tzhealthmedia.com.

 

 

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