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New Research From Inovalon and Harvard Uncovers Utilization and Cost Differences Between Medicare Advantage and Traditional Medicare
By: GlobeNewswire - 20 Sep 2023Back to overview list

Data Shows Medicare Advantage is Substantially Reducing Costs and Hospitalizations Without Sacrificing Access to Care Relative to Traditional Fee-for-Service Medicare

BOWIE, Md., Sept. 20, 2023 (GLOBE NEWSWIRE) -- Inovalon, a leading provider of cloud-based software solutions empowering data-driven healthcare, today released the latest findings from a first-of-its-kind study designed and conducted in collaboration with Harvard Medical School researchers. The research utilizes a large, unique and nationally representative Medicare population to shed light on how healthcare utilization and expenditures differ between Medicare Advantage (MA) and traditional Fee-for-Service (FFS) Medicare beneficiaries. The study finds that MA significantly reduces hospitalizations and expenditures compared to FFS, while providing comparable access to high quality primary care. Insights from this research can drive policy actions and lead to meaningful cost and quality improvements for millions of Medicare beneficiaries.

The research is published in the white paper “Utilization and Efficiency Under Medicare Advantage vs. Traditional Fee-for-Service,” and is the second in an ongoing series of studies led by Inovalon and Harvard researchers. The study adjusts for differences in who enrolls in each program more effectively than past work by bringing in member characteristics from enrollee information collected prior to Medicare enrollment and a carefully designed statistical methodology to assure apples-to-apples comparisons. With MA now covering over half of all Medicare beneficiaries and accounting for more than $350 billion in annual expenditures, the program is immensely consequential but the lack of sufficient data on the program has been a major hindrance to key stakeholders. Inovalon’s unique data is helping fill this information void so this study can enable key stakeholders to close critical knowledge gaps around program effectiveness and support health plans in benchmarking their utilization and costs to drive improved outcomes and economic efficiencies.

Specific findings from the research include:

  • MA enrollees have more than 50% fewer inpatient hospital stays and 22% fewer emergency department visits than those enrolled in FFS.
  • MA provides comparable primary and routine care with only 7% fewer primary care provider visits and similar prescription drug use compared to FFS beneficiaries. 
  • Overall healthcare costs for MA are 12% lower than for similar FFS beneficiaries using Medicare price-normalized expenditures and adjusting for differences in beneficiary demographic, clinical, and socioeconomic characteristics.
  • Medicare beneficiaries who enroll in FFS at age 65 have a 35% higher healthcare utilization in the two years following enrollment relative to the two years before they were enrolled in commercial insurance coverage. In contrast, utilization among those who enrolled in MA is relatively stable.

“Our research credibly and definitively measures the efficacy of MA relative to FFS and indicates that the MA program is making healthcare more efficient without sacrificing quality of care for patients,” said Boris Vabson, PhD, health economist at Harvard Medical School, and a lead researcher on the project. “This study would not be possible with conventionally available data sources. Inovalon’s data provided us with unique visibility into the inner workings of Medicare, for a large and nationally representative population, and allowed us to follow individuals as they transitioned from commercial to Medicare coverage."

“The importance of assessing MA’s effectiveness has never been greater as the program continues to rapidly grow in terms of lives covered and dollars spent,” said Christie Teigland, PhD, Vice President of Research Science and Advanced Analytics at Inovalon. “Our study demonstrates how active care management and preventive care offered under MA is helping beneficiaries better manage their health in cost-effective ways. This data and other insights from our findings offer the industry a glimpse into the strategies that are working to meaningfully improve healthcare, including the health of the most disadvantaged elderly beneficiaries.”

The research findings are made credible and definitive by virtue of the breadth and depth of the data powering it, as well as the study’s rigorous and carefully designed statistical methodology and advanced statistical techniques. The study utilized Inovalon’s MORE2 Registry®, the nation’s largest healthcare dataset originating from longitudinally matched, primary source data encompassing more than 78 billion medical events, social determinants of health (SDOH), clinical, and administrative data on 372 million unique patients across commercial, Medicare, and Medicaid insurance, including over 30% of all privately insured lives and 100% of the U.S. Medicare FFS program data accessed through a Centers for Medicare & Medicaid Services Research Data Use Agreement. Additionally, Inovalon and Harvard deployed comprehensive patient-matching and statistical approaches that ensure comparisons solely capture the impact of each program, including matching based on propensity scores and a difference-in-differences research design. This rigorous design ensured the results capture actual differences between the two programs and not differences in who enrolls in them.

To download the white paper and learn more about the research, please visit: Harvard & Inovalon Medicare Research Collaboration.

About Inovalon
Inovalon is a leading provider of cloud-based software solutions empowering data-driven healthcare. The Inovalon ONE® Platform brings together national-scale connectivity, real-time primary source data access, and advanced analytics into a sophisticated cloud-based platform empowering improved outcomes and economics across the healthcare ecosystem. The company’s analytics and capabilities are used by more than 20,000 customers and are informed by the primary source data of more than 78 billion medical events across one million physicians, 640,000 clinical settings, and 372 million unique patients. For more information, visit

Glen Brandow
Sr. Director, Corporate Communications, Inovalon

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