Medicare Advantage Associated With More Racial Disparity Than Traditional Medicare For Hospital Readmissions

By Yue Li, Xi Cen, Xueya Cai, Caroline P. Thirukumaran, Jie Zhou and Laurent G. Glance
Health Affairs, July 2017

Abstract

We compared racial disparities in thirty-day readmissions between traditional Medicare and Medicare Advantage beneficiaries who underwent one of six major surgeries in New York State in 2013. We found that Medicare Advantage was associated with greater racial disparity, compared to traditional Medicare. After controlling for patient, hospital, and geographic characteristics in a propensity score based approach, we found that in traditional Medicare, black patients were 33 percent more likely than white patients to be readmitted, whereas in Medicare Advantage, black patients were 64 percent more likely than white patients to be readmitted. Our findings suggest that the risk-reduction strategies adopted by Medicare Advantage plans have not been successful in lowering the markedly higher rate of readmission among black patients, compared to white patients.

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There are many reasons for racial disparities in health care, and they are all bad, but some are worse than others.

In this study hospital readmissions within thirty days of undergoing any one of six major surgeries were greater in black Medicare patients than in white patients. However, the disparities were much higher in privately insured Medicare Advantage patients than they were in patients enrolled in the traditional Medicare program. Efforts must be directed to identifying and correcting the reasons for these disparities in all Medicare patients, but special attention should be given to those in the private Medicare Advantage plans, especially considering the greater prevalence of the problem.

Taxpayers are paying more for patient care in the private Medicare Advantage plans than they are for patients in the traditional Medicare program. The private insurance industry claims that they are providing greater value for that spending through higher quality care that is better coordinated, including better post-discharge followup care. However, this study shows that black patients are receiving worse followup care, resulting in higher readmission rates.

This particular disparity in care seems to be one of the worst since it combines the problematic background of disparities in care with the somewhat nefarious managed care techniques of the private insurance industry that are based more on greater profits (greed) than on their professed higher quality care. The private insurers are providing lower quality care at a higher cost – the exact opposite of what they claim.

The authors of this report conclude, “Further research is needed to understand whether newer health care delivery models, such as accountable care organizations, will help narrow the gap in readmission outcomes between black and white patients.” No. With this and a multitude of other studies, we have enough data already to warrant dismissing the private Medicare Advantage plans. Instead, we need to fix the traditional Medicare program, converting it into a model that would be ideal to expand to include everyone. That fix certainly should include addressing all of the reasons for racial disparities in care.

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