Should-Read: Joseph P. Newhouse, Mary Beth Landrum, Mary Price, J. Michael McWilliams, John Hsu, and Thomas McGuire: The Comparative Advantage of Medicare Advantage

Should-Read: Where is the advantage—if any—of Medicare Advantage as opposed to Traditional Medicare coming from? Could it be that some aspects of the promise of HMOs are finally being realized—that there is somebody monitoring and tracking and thus disposed to deal with the health problems of beneficiaries, as evidence by their having HCC codes?: Joseph P. Newhouse, Mary Beth Landrum, Mary Price, J. Michael McWilliams, John Hsu, and Thomas McGuire: The Comparative Advantage of Medicare Advantage: “We find differences in the distribution of beneficiaries across H[ierarchal ]C[ondition ]C[ategories]’s between TM and MA, principally in the smaller share of MA enrollees with no coded HCC, consistent with greater coding intensity in MA…

…Among those with an HCC code, absolute differences between MA and TM shares of beneficiaries are small, consistent with little service-level selection. Variation in HCC margins does not predict differences between an HCC’s share of MA and TM enrollees, although one cannot a priori sign a relationship between margin and service-level selection. Margins are negatively associated with the importance of post-acute care in the HCC. Margins among common chronic disease classes amenable to medical management and typically managed by primary care physicians are larger than among diseases typically managed by specialists. These margin differences by disease are robust against a test for coding effects and suggest that the average technical efficiency of MA relative to TM may vary by diagnosis. If so, service-level selection on the basis of relative technical efficiency could be welfare enhancing…