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Hospitals spend less for patients in Medicare Advantage than for patients in fee-for-service Medicare

Research Activities, February 2009, No. 366

Treating a patient enrolled in the Federal Medicare Advantage health insurance program costs hospitals an average of $10,800 compared with an average of $11,100 for those enrolled in Medicare's traditional fee-for-service program, according to data from the Agency for Healthcare Research and Quality (AHRQ). Medicare Advantage, launched in 1997, allows patients to enroll in managed care plans. Nationally, patients enrolled in Medicare Advantage accounted for 14 percent of the 12.2 million Medicare patient stays in 2006.

To explore differences, AHRQ conducted an analysis of 5.7 million hospital stays of patients over age 65 in 13 states in 2006. Findings show that:

  • Patients in Medicare Advantage had shorter stays than their fee-for-service counterparts—5.2 days compared with 5.9 days.
  • In Medicare Advantage, 35.5 percent of patients were categorized as most severely ill, compared with 38.5 percent among fee-for-service Medicare patients.
  • Fifty-two percent of the patients in Medicare Advantage went home after their hospital stay and not to a nursing home or under the care of home health care agency compared with 47 percent of fee-for-service Medicare patients.

For more information, go to Medicare Hospital Stays: Comparisons between the Fee-for-Service Plan and Alternative Plans, 2006 HCUP Statistical Brief #66 (http://www.hcup-us.ahrq.gov/reports/statbriefs/sb66.jsp). The report uses statewide hospital discharge data for 13 States in 2006. The inpatient stays are in short-term, non-Federal hospitals and include all patients over age 65 who were Medicare beneficiaries, with or without other insurance coverage.

Current as of February 2009
Internet Citation: Hospitals spend less for patients in Medicare Advantage than for patients in fee-for-service Medicare: Research Activities, February 2009, No. 366. February 2009. Agency for Healthcare Research and Quality, Rockville, MD. http://archive.ahrq.gov/news/research-activities/feb09/0209RA31.html