Impact of Pre-dialysis Quality of Care and Dialysis Coinsurance on Disenrollment of Patients with Incident End-stage Renal Disease from Medicare Advantage Plans and Subsequent Patient Outcomes

Li, Qijuan

Abstract

In the U.S., end-stage renal disease (ESRD) patients, who constitute less than 1% of the Medicare beneficiary population, account for 6.4% of all Medicare expenditures. Medicare spending on ESRD patients has exploded in the past decade, leading to intense policy interest in strategies to reduce costs. Most beneficiaries with ESRD are served by Medicare Fee-for-service (FFS) plans and Medicare Advantage (MA) plans. The monthly capitation payment that MA plans receive from the government - designed to cover all of an individual's care - incentivize these plans to select individuals they expect to be low cost and to shirk covering individuals who are chronically ill. This is often called risk selection. Although beneficiaries may remain in MA plans if they were enrolled prior to developing ESRD, many switch to Medicare FFS plans. It is unclear whether this disenrollment is due to ESRD patients' unfettered choice or indicative of MA plans' risk selection strategies. The disenrollment of ESRD patients from MA plans due to risk selection would not only result in government overpayment to private plans but also discontinuity of care, worse health outcomes, and higher costs for ESRD patients. This project will assess the impact of increasing dialysis coinsurance, one possible risk selection strategy, on ESRD patients' disenrollment from MA plans and associated health outcomes using three quasi-experimental research designs based on seven national databases. The study's hypotheses are that increasing dialysis coinsurance will drive significant numbers of ESRD patients from MA plans to Medicare FFS plans and that this disenrollment will result in higher hospitalization rates and poorer hemoglobin management. For chronically ill patients, financial resources and quality of care of providers often play primary roles in their plan choice. This study will examine the relationship between pre-dialysis quality o care and ESRD patients' disenrollment from MA plans using a multinomial logit model. It will also employ a difference-in-difference model to compare disenrollment status change before and after the dialysis coinsurance increase in the treatment and control groups. The intervention group includes MA plan contracts that increased dialysis coinsurance from 0% to 20% between 2008 and 2009; the control group consists of MA plans that maintained no cost sharing over this time period. An innovative economic analysis will assess the impact of disenrollment of ESRD patients from MA plans on health outcomes due to risk selection using dialysis coinsurance increase as an instrument. This study will contribute to understanding the effect of cost sharing on ESRD patients' plan choice and health outcomes. The study results will inform policymakers about optimal Medicare benefit and payment policies that reduce health expenditures and promote better health outcomes, while minimizing negative, unintended consequences for frail ESRD patients. Moreover, these research findings will also significantly contribute to enhancing risk mitigation strategies in the Affordable Care Act (ACA), which similarly provides a greater number and variety of plan choices to beneficiaries as a way of promoting market competition.

Public Health Relevance

This study will assess the impact of pre-dialysis quality of care and dialysis coinsurance increase on end-stage renal disease (ESRD) patients' disenrollment from MA plans and associated health outcomes. The study results will inform policymakers about optimal Medicare benefit and payment policies that reduce health expenditures and promote better health outcomes, while minimizing negative, unintended consequences for frail ESRD patients. Moreover, research findings will significantly contribute to enhancing risk mitigation strategies in the Affordable Care Act (ACA), which similarly provides a greater number and variety of plan choices to beneficiaries as a way of promoting market competition.