Medicare Advantage patients see lower perioperative costs than traditional Medicare peers

Editor's Note

Surgical episodes for Medicare Advantage (MA) patients cost less and used fewer resources than those for traditional Medicare (TM) beneficiaries, according to a JAMA Health Forum study published August 1. Researchers analyzed 1.18 million procedures performed on 1.11 million beneficiaries and found 30-day episode costs were 3.1% lower for MA patients compared with similar TM patients.

As detailed in the article, lower costs were linked to greater use of outpatient settings, shorter hospital stays, higher rates of discharge home, and reduced reliance on postacute care. Readmissions were also less frequent among MA patients, while 30-day mortality rates remained comparable across both groups.

The analysis found MA patients underwent fewer surgical procedures overall, with utilization rates 4.4% lower than TM peers. The reduction was concentrated in high-volume categories such as knee arthroplasty, spinal operations, and shoulder arthroplasty, while MA patients had higher rates of procedures tied to cancer treatment, including thyroidectomy, prostatectomy, mastectomy, and hysterectomy. Researchers suggested these differences may reflect both utilization management policies and preventive care practices within MA.

On average, costs for MA surgical episodes were $671 lower than for TM, with differences consistent across all 11 surgical categories examined. Roughly 14% of the savings appeared to stem from selective contracting and steering patients to particular facilities, as MA patients traveled farther on average for surgery. The rest of the savings were tied to within-facility differences, including higher use of minimally invasive approaches and greater cost efficiency.

The outlet reports lower surgical utilization rates accounted for an additional 6.3% cost savings across MA beneficiaries. Importantly, the researchers noted these reductions were not accompanied by worse quality indicators, reinforcing that efficiencies likely came from site-of-care shifts and management strategies rather than compromised care.

The study authors concluded the combination of lower utilization, shorter stays, and strategic steering to outpatient or lower-cost facilities contributes significantly to MA’s overall savings compared with TM.