Evaluation of Potentially Avoidable Acute Care Utilization Among Patients Insured by Medicare Advantage vs Traditional Medicare

IMPORTANCE: Medicare Advantage plans have strong incentives to reduce potentially wasteful health care, including costly acute care visits for ambulatory care−sensitive conditions (ACSCs). However, it remains unknown whether Medicare Advantage plans lower acute care use compared with traditional Medicare, or if it shifts patients from hospitalization to observation stays and emergency department (ED) direct discharges. OBJECTIVE: To determine whether Medicare Advantage is associated with differential utilization of hospitalizations, observations, and ED direct discharges for ACSCs compared with traditional Medicare. DESIGN, SETTING, AND PARTICIPANTS: Cross-sectional study of US Medicare Advantage vs traditional Medicare beneficiaries from January 1 to December 31, 2018. Poisson regression models were used to compare risk-adjusted rates of Medicare Advantage vs traditional Medicare, controlling for patient demographic characteristics and clinical risk and including county fixed-effects. Data were analyzed between April 2021 and November 2022. MAIN OUTCOMES AND MEASURES: Hospitalizations, observation stays, and ED direct discharges for ACSCs. RESULTS: The study sample comprised 2 665 340 Medicare Advantage patients (mean [SD] age, 72.7 [9.8] years; 1 504 519 [56.4%] women; 1 859 067 [69.7%] White individuals) and 7 981 547 traditional Medicare patients (mean [SD] age, 71.2 [11.8] years; 4 232 201 [53.0%] women; 6 176 239 [77.4%] White individuals). Medicare Advantage patients had lower risk of hospitalization for ACSCs compared with traditional Medicare patients (relative risk [RR], 0.94; 95% CI, 0.93-0.95), primarily owing to fewer hospitalizations for acute conditions (eg, pneumonia). Medicare Advantage patients had a higher risk of ED direct discharges (RR, 1.44; 95% CI, 1.43-1.45) and observation stays (RR, 2.38; 95% CI, 2.34-2.41) for ACSCs vs traditional Medicare patients. Overall, Medicare Advantage patients were at higher risk of needing care for an ACSC (hospitalization, ED direct discharge, or observation stay) than traditional Medicare patients (RR, 1.30; 95% CI, 1.30-1.31). Within the Medicare Advantage population, patients in health maintenance organizations (HMOs) were at lower risk of ACSC-related hospitalization compared with patients in its preferred provider organizations (RR, 0.96; 95% CI, 0.95-0.98); however, those in the HMOs had a higher risk of ED direct discharge (RR, 1.08; 95% CI, 1.07-1.09) and observation stay (overall RR, 1.10; 95% CI, 1.02-1.12). CONCLUSIONS AND RELEVANCE: The findings of this cross-sectional study of Medicare Advantage and traditional Medicare patients with ACSCs indicate that apparent gains in lowering rates of potentially avoidable acute care have been associated with shifting inpatient care to settings such as ED direct discharges and observation stays.