Objective: Examine whether Medicare Advantage (MA) coverage is associated with more efficient prescribing of Part B drugs than traditional Medicare (TM) coverage.
Data sources: Twenty percent sample of 2016 outpatient and carrier TM claims and MA encounter records and Master Beneficiary Summary File data.
Study design: We analyzed whether MA enrollees compared to TM enrollees more often received the low-cost Part B drug in four clinical scenarios where multiple similarly effective drugs exist: (1) anti-VEGF agents to treat macular degeneration, (2) bone resorption inhibitors for osteoporosis, (3) bone resorption inhibitors for malignant neoplasms, and (4) intravenous iron for iron deficiency anemia. We then estimated differences in spending if TM prescribing aligned with MA prescribing. Finally, using linear probability models, we examined whether differences in MA and TM prescribing patterns were attributable to differences in the hospitals and clinician practices who treat MA and TM enrollees or differences in how these hospitals and clinician practices treat their MA versus TM patients.
Data collection/extraction methods: Not applicable.
Principal findings: In all cases, a larger share of MA enrollees received the low-cost drug compared to TM enrollees, ranging from 8 percentage points higher for anemia to 16 percentage points higher for macular degeneration in the unadjusted analysis. Results were similar in regression analyses controlling for enrollee characteristics and market factors (5-13 percentage points). If TM prescribing matched MA prescribing, we estimated savings ranging from 6% to 20% of TM spending for each scenario. Differences in prescribing patterns were driven both by MA enrollees receiving treatment at more efficient hospitals and clinician practices and hospitals and clinician practices more often prescribing low-cost drugs to their MA patients.
Conclusions: Our findings show MA enrollees were more likely than TM enrollees to receive low-cost Part B drugs in four clinical scenarios where multiple similarly or equally effective treatment options exist.
Keywords: Medicare; Medicare Part B/economics; Medicare Part C; drug costs; prescription drugs; reimbursement mechanisms.
© 2021 Health Research and Educational Trust.