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Does the Medicare star rating system affect beneficiary decision making?

Seniors who are eligible for Medicare have choices when it comes to receiving medical services. They can either enroll in a fee for services system or in the Medicare Advantage plan, where a number of private insurers contract with Medicare to deliver health care. A new study examined whether providing a star rating system for the plans was associated with beneficiaries’ decisions about plan enrollment.
(JAMA) -- Seniors who are eligible for Medicare have choices when it comes to receiving medical services. They can either enroll in a fee for services system or in the Medicare Advantage plan, where a number of private insurers contract with Medicare to deliver health care. A new study examined whether providing a star rating system for the plans was associated with beneficiaries’ decisions about plan enrollment.

As Americans become eligible for Medicare, the biggest question becomes who will provide that care. Medicare recently began publically reporting the performance of private insurers involved in the Medicare Advantage program. Patients can sometimes choose from 15 to 17 different depending on where they live.

"Each health plan receives anywhere from one to five stars that captures the quality of care that they deliver to the population of patients that they serve,” explained Dr. William H. Shrank with the Centers for Medicare and Medicaid Services.

This five-star rating system is based on several quality indicators including, preventive care, care delivered for chronic diseases, health outcomes and patient satisfaction with care.

"There had not previously been a study that looked at the relationship between the quality scores that were achieved and the actual enrollment decisions that were made,” Dr. Shrank said.

Dr. William Shrank and colleagues from the Centers for Medicare and Medicaid services examined 2011 enrollment data from Medicare Advantage plans. They studied new enrollees to the plan and those voluntarily switching plans.

"If you look at both of these populations, a one star increase that puts a plan either as the best performer in a market or at least as good as the plan the switcher was previously in, is associated with over a 10 percentage point increase in the likelihood of enrollment,” continued Dr. Shrank. "When quality ratings were made available it looks like somebody must be using it because patients are in large numbers moving toward the higher quality plans."

Dr. Shrank also says the star ratings give beneficiaries an additional voice and choice in the quality of care they receive.

"It allows Medicare beneficiaries to have a greater voice in identifying the best and the weakest plans and educate their fellow beneficiaries to make better decisions moving forward,” said Dr. Shrank.

The rating system also challenges private insurers to continue providing quality care that should translate into greater enrollment and revenues.

Researchers say the choices of low income and some minority beneficiaries, those living in rural areas and in the Midwest had weaker relationships with the Advantage program star ratings.


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