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Hospitals Spend Less for Patients in Medicare Advantage than for Patients in Fee-For-Service Medicare

AHRQ News and Numbers, January 14, 2009

AHRQ News and Numbers provides statistical highlights on the use and cost of health services and health insurance in the United States.

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 the latest News and Numbers 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. This compares to 47 percent of fee-for-service Medicare patients.

This AHRQ News and Numbers is based on Medicare Hospital Stays: Comparisons between the Fee-for-Service Plan and Alternative Plans, 2006. 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.

For other information, or to speak with an AHRQ data expert, please contact Bob Isquith at or call (301) 427-1539.

Current as of January 2009
Internet Citation: Hospitals Spend Less for Patients in Medicare Advantage than for Patients in Fee-For-Service Medicare: AHRQ News and Numbers, January 14, 2009. January 2009. Agency for Healthcare Research and Quality, Rockville, MD.


The information on this page is archived and provided for reference purposes only.


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