Medicare Advantage: The High Value Choice for Seniors

Across the country, the overriding goal of doctors, hospitals and health insurers has become to provide “high value” healthcare to patients. In other words, we want to produce the best health outcomes for patients using the best treatment at the best (though not always lowest) price. For those of us in the healthcare arena we hear this message every day– we need to move from volume to value. In the private and government sectors CAPG members are implementing multiple delivery system reform concepts that seek to transform the healthcare system from the current fee-for-service model to one that rewards quality and efficiency. While we all have the same goal of producing high value healthcare, what is often left out of the discussion is the fact that we already have a program that has begun delivering on this goal – Medicare Advantage. It would be a mistake therefore, not to incorporate the successes achieved in Medicare Advantage into our broader healthcare system reforms, which means if we wish to truly bring “high value” healthcare to the entire healthcare delivery system, we must do all we can to preserve and protect this driver of innovation in healthcare.

Within Medicare Advantage, physician groups are paid a specific amount of money to manage the health of a defined patient group. This model appropriately lines up efficiency with the goal of keeping patients healthy. In the traditional fee-for-service model, the incentives are just the opposite. Individual physicians are paid after the fact for each service provided, with no emphasis on preventing disease and the good health of the individual. This model creates a reverse incentive to provide more services that might not be necessary.

When a physician organization works within a defined budget, the incentives align to provide value to patients. For example, CAPG physician organizations intensely focuses on providing primary care, preventive screenings and vaccinations, all with an eye toward fostering a healthier population. Physician organizations have the flexibility to use their payment to employ or contract with care teams containing a mix of professionals, including nurses, pharmacists, nutritionists, mental health professionals, case managers and social workers. Each team member is encouraged to practice at the top of his or her license to maximize efficiency in the practice of medicine. This model allows physicians to do the work for which they were trained and other professionals to maximize their expertise as well. Finally, physicians in the Medicare Advantage model are able to address the various behavioral, social and environmental factors that affect a patient’s well-being. These additional services are generally unavailable in fee-for-service Medicare (if they are, it is the patient’s responsibility to engage these services, not the primary care physicians, thus creating yet another inefficiency) and yet are incredibly valuable to the elderly beneficiaries.

But perhaps the most significant aspect of the value equation in Medicare Advantage’s capitated payment model is innovation. Many of the best care management programs available today were born in Medicare Advantage. Among CAPG members, there are countless examples: programs that provide a better healthcare experience in the last year of life; programs to keep patients out of the hospital when an admission is avoidable; programs to ensure the safe use of prescription medication; and the list goes on and on. Medicare Advantage provides the opportunity for physician organizations to develop unique solutions to prevent and treat illness in their patient populations. Essentially, it allows healthcare professionals to practice medicine the way they want, finding new ways to keep patients healthy and improving quality of life for the sickest patients. What all of this innovation really means is a better, higher quality healthcare experience for patients coupled with significantly better quality of life due to the better care they are receiving. Patients are recognizing this value proposition – and I believe that is why they are signing up for Medicare Advantage in record numbers.

To foster and expand value in healthcare, we have to first ensure that Medicare Advantage and its capitated payments to physician groups are preserved. That means ensuring that adequate resources are available to continue to allow physicians in the program to innovate on behalf of their patients.

Next week, physicians from across the country will come to Washington, D.C. to discuss the value of this program at the first annual CAPG Colloquium on Physician Groups in Medicare Advantage. Policy experts, physician group executives, and practicing physicians will gather to discuss the clinical programs made possible by Medicare Advantage and the future of the program from a policy perspective. Chief among the discussion topics at this event will be how to ensure that the Medicare Advantage coordinated care model is maintained as a strong foundation for driving and expanding value in healthcare delivery – in Medicare and across the entire healthcare system. I encourage each of you to attend this event to learn more about what physician groups are doing to provide high value care to Medicare Advantage patients.

Donald H. Crane is the President & CEO of CAPG, a professional association representing over 160 physician organizations across 25 states practicing coordinated care. To learn more about CAPG’s Colloquium on Physician Groups in Medicare Advantage or to register visit


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