Why primary care may cost less in Medicare Advantage

Selective contracting with primary care physicians may be one factor behind lower per-patient expenses in Medicare Advantage, a study published in the March edition of Health Affairs found. 

The study examined 4,456,037 traditional Medicare patients who visited 151,679 primary care physicians. The physicians who participated in Medicare Advantage networks had $433 lower costs per patient than the regional average of physicians. 

The quality measures for physicians participating in Medicare Advantage were similar to the regional average, the study found. 

Physicians who did not participate in any MA networks cost $1,617 more per patient per year than those participating in MA networks, and they had lower quality measures. 

The findings suggest that "managed care tools, particularly selective contracting with primary care physicians" contribute to lower costs in Medicare Advantage, the authors concluded. Though the differences in cost are most likely attributable to differences in practice style, that could also serve as a mechanism for plans to select healthier patients, the authors wrote. 

"When evaluating MA networks, regulators could scrutinize efforts by MA plans to select healthier patients through selective contracting with physicians," the authors wrote. 

The study was conducted by researchers at Harvard Medical School and the Harvard T.H. Chan School of Public Health in Boston, the Hebrew University of Jerusalem, the University of Pittsburgh, the University of Michigan in Ann Arbor and Vanderbilt University in Nashville, Tenn. 

Read the full study here. 

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