GENERATIONS – Journal of the American Society on Aging

for covered benefits on a fee-for-service basis, with rates set by the federal government. Benefi- ciaries pay a deductible and co-payments, with many also purchasing supplemental coverage for outpatient and physician services. The fee-for-service system created by tradi- tional Medicare is fragmented and ill-suited for today’s needs. While there still are people who will contract acute illnesses and inpatient care is a necessary and important part of all health- care coverage, the field of medicine has become much more complex, with more specialists, treatments, and medications. The result, most significantly, is that more older adults are living longer with chronic conditions that need long- term management. Older adults with chronic conditions are growing in number, as are the quantity of condi- tions they need help managing. They see multi- ple specialists, many of whom do not coordinate with each other. On average, Medicare patients see seven different physicians in four practices (Pham et al., 2007). Three in four adults older than age 65 have multiple chronic conditions (Gerteis, 2014). Seventy-seven percent have at least two conditions, and 14 percent have six or more (National Council on Aging, 2018). Those with multiple conditions account for 93 percent of fee-for-service Medicare costs each year (Gerteis, 2014). These are high-need, high-cost individuals who require ongoing clinical and support services in an integrated care system that can help them to manage their conditions and to live full and healthy lives. An integrated system, in which payments and benefits align to incentivize integrated care that encourages primary care, early intervention, and care management, is a better solution. This alternative exists in Medicare today—it is called Medicare Advantage (MA). The MA system is based on risk-based capitated payments to cover Medicare benefits, offered by private health The importance of integrated, value-based managed care

plans, with accountability for provider adequacy and quality performance. And, it is increasingly the choice for Medicare-eligible beneficiaries. The Centers for Medicare &Medicaid Ser- vices (CMS) projects that the number of individu- als choosingMAwill grow to 22.6 million in 2019, which will account for 36.7 percent of the Medi- care population (CMS, 2018). This represents an 11.5 percent increase from 2018, which had been the largest increase in recent years. Nationally, there are 3,700MA plans, with more than 91 per- cent of beneficiaries having access to ten or more plan options in their region. Most of these plans offer bothMedicare hospital and physician ben- efits, as well as Part D prescription drug cover- age, along with supplemental benefits not covered by traditional Medicare. These benefits typically include dental, hearing, and vision care, wellness programs, and reduced cost-sharing with lower premiums and annual out-of-pocket costs for the beneficiary. MA premiums are low, with 2019 average monthly premiums about $28, and half of enrollees are enrolled in zero premium plans. The risk-based capitated system of financ- ing healthcare in MA has led to a transforma- tion in care delivery, enabling providers to offer person-centered care that focuses on primary care teams. According to recent report by the Health Care Payment Learning & Action Net- work, nearly 50 percent of providers under con- tract to MA plans are in alternative payment arrangements, with providers assuming some level of financial risk (Health Care Payment Learning & Action Network, 2018). This is sig- nificantly higher than traditional Medicare, and much higher than in commercial insurance. These plans and providers work together to address shortfalls in care and build innovative ways to offer care that are improving outcomes—at the same or lower cost than traditional Medicare. MA’s Innovations in Care Delivery Three approaches described below illustrate the care delivery innovations underway in MA. First is the focus on primary care, early intervention,

20 | Spring 2019

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