Document Type

Dissertation

Degree

Doctor of Business Administration

Major

Business Administration

Date of Defense

10-29-2020

Graduate Advisor

L. Douglas Smith, PhD

Committee

James F. Campbell, PhD

L. Douglas Smith, PhD

Dinesh Mirchandani, PhD

Abstract

The annual average cost of healthcare for services utilization by a Medicare beneficiary is projected to grow from about $10,000 to over $16,000 by 2023. As an ongoing initiative to address this trend, the federal government contracts with private insurance companies and other entities, called Medicare Advantage Organizations (MAOs), to develop and administer alternative health insurance plans designed to contain service utilization and costs. One feature of some Medicare Advantage plans is the presence of risk-bearing contracts with primary care physician organizations that voluntarily accept financial responsibility for the overall cost of care for patients attributed to them. In this arrangement, the MAO delegates medical care, care management oversight, and discretionary spending authority to the physician organization. For services rendered, the physician organization accepts as payment the surplus or deficit derived from annual budgetary results (as negotiated in their contract with the MAO) rather than the traditional per-encounter or service-specific payments associated with fee-for-service payment schemes. This study uses an extensive and novel data set from the Centers for Medicare and Medicaid Services, as well as third-party sources, to examine how Missouri beneficiary’s attributes (age, gender, race, and health status), presumed financial resources and education, access to doctors and hospitals, and Medicare plan choices help to predict services utilization. We use summary statistics, tests of differences in means, CHAID decision trees, and Poisson regression to analyze beneficiaries’ utilization of five service categories (inpatient care, skilled nursing care, outpatient services, home health services, and other provider services, including physicians). The study reveals three critical findings. First, specific beneficiary attributes such as age and race, and beneficiary access to doctors and hospitals, are predictors of one’s chosen Medicare plan. Notably, some Medicare beneficiary groups are more likely to enroll in a Medicare Advantage plan rather than others. Second, beneficiary characteristics, doctor and hospital access, and plan choice collectively have a strong association with service utilization. Those enrolled in Medicare Advantage plans use fewer services than their Traditional Medicare counterparts. Lastly, beneficiaries enrolled in a Medicare Advantage plan that engages risk-bearing primary care physician groups use fewer services than beneficiaries in other plans.

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