Integrating Medicare and Medicaid Healthcare Delivery and Reimbursement Policies for Dual Eligible Beneficiaries: A Cost-Efficiency Analysis of Managed Care

Abstract

This paper examines the role of Managed Care in reducing inefficiencies in the provision of healthcare for Medicare-Medicaid dual eligible patients, and more generally, for elderly Medicare-only beneficiaries. The dataset used in the analyses of this study is the patient hospital discharge data from California between years 2006 and 2010 (inclusive). More specifically, only records for elderly patients (age 65+) whose payer categories are Medicare or Medicaid were utilized. A series of different regression models were run on this dataset, as well as subsets of this data, and all consistently showed managed care enrollment to reduce utilization rates as well as costs of inpatient hospital services. Using the regression results obtained, annual cost savings from inpatient services that can be achieved by enrolling all California non managed care dual eligibles and Medicare beneficiaries into such organizations is estimated to be approximately $1.42 billion. This is equivalent to 10.39% of total Medicare spending on hospitalizations in California each year.