Savings from Medicare Advantage Are Reaching Far and Wide

Savings from Medicare Advantage Are Reaching Far and Wide

Medicare Advantage is proving to be as cost-effective and effective on the healthcare system as it was originally intended to be.

Tailored care coordination, comprehensive benefits, disease management programs, market competition–these are pieces of the overall puzzle that make Medicare Advantage the foundation for care delivery innovations across the whole health system. Medicare Advantage is implementing certain practices like increasing provider efficiency in the delivery of clinical care and cost-effective practices, and reducing spending in the free-for-service Medicare program.

Growth in the proportion of Medicare beneficiaries that are also enrolled in Medicare Advantage, also known as the “penetration,” is correlated with a slowdown in Medicare free-for-service spending growth.  In countries where the penetration is highest, a 10 percent point increase in Medicare Advantage penetration is associated with a $154 drop in annual per capita costs for regular Medicare. It’s the implementation of best practices and care guidelines with their contracted network providers that change practice patterns not just for the members of the Advantage, but for all patients that are taken care of by these providers, including those that are enrolled for traditional Medicare.

The spillover effect is an economics theory that states that once a certain, usually more expensive fund is filled, the remaining capital will overflow into the next round and so on, in essence giving the underprivileged a way to live. (Whether or not it works in the real world is another story.) The spillover effect, the study found, is significant enough that it actually makes Medicare Advantage cost less than traditional Medicare on average, and has contributed to the recent downward trend in fee-for-service spending.

Having the right healthcare plan is important for your life because medical bills can be extremely expensive. You can buy that peace of mind! For your all-encompassing insurance in Carlisle, Pennsylvania, contact Miller Insurance Associates today!