Skip to main content
NCBI home page
Missouri Medicine logoLink to Missouri Medicine
letter
. 2014 May-Jun;111(3):185–186.

Medicare Advantage: Blame the Physicians, and then Fire Them

Paul B Vatterott Jr 1
PMCID: PMC6179570  PMID: 25011331

The recent Perspective on Medicare Advantage (MA) by Arthur Gale, MD, (The Medicare Advantage Debacle, March/April 2014) reflects outdated information on the current nature of MA insurance. As a participating physician since 1991 in Medicare Advantage and its predecessors, MC+ and Medicare HMO, I have seen changes which have improved my capacity to deliver quality care to this portion of my patient population.

In the early days, the Center for Medicare Ser vice (CMS) formula favored the enrollment of the well patient and the avoidance of the sick. Over the years, the formula for payment of these plans has evolved to favor the enrollment of the chronically-ill elderly patient. CMS incentivizes insurance companies by attaching additional monthly revenue to various high cost illnesses such as cancer, AIDS, COPD, congestive heart failure, etc. These incentives have resulted in the selection of a sicker and therefore more expensive population of patients. The average medical costs per MA patient are greater than the average cost of traditional Medicare patients.

A well-designed MA plan attracts patients of limited financial means who have experienced high-cost medical care. Such a plan, in order to be financially successful, must encourage its participating physicians, particularly the PCP, to do aggressive, comprehensive care of these patients. If the patient’s health is maintained at the highest possible level, the result is lower costs primarily by reduced hospitalization and institutionalization.

MA plans currently enroll about 28% of Missouri Medicare beneficiaries. In my practice these patients are generally satisfied with their insurance and the care they receive.

Mo Med. 2014 May-Jun;111(3):185–186.

In Reply

Arthur Gale 1

I am happy to hear that Dr. Vatterott is able to render quality care to his Medicare Advantage patients. I’m sure that if you asked the 1,200 faculty physicians at the Yale Medical Group, the well-respected physicians at the Moffitt Cancer Center in Tampa, Florida, most of the orthopedic surgeons in Dayton Ohio, the only hand specialists and a large GI group in the Cincinnati if they were able to render quality care to their patients in Medicare Advantage they too would answer yes - that is until they were suddenly terminated.

The main problem with Medicare Advantage is that it costs Medicare 12% more than standard Fee-For-Service (FFS). As I pointed out in my article, this amounted to $14 billion more in 2009. The current growth rate of Medicare expenditures is unsustainable. The Medicare Payment Advisory Commission (MedPAC) which advises Congress on how to reduce Medicare costs has recommended that Medicare Advantage payments be brought down to equal the payments made to Fee For Service Medicare. That is the crux of the problem.

Dr. Vatterott states that Medicare Advantage is now treating sicker and more expensive patients than in the past. This may be true. But there is no proof that these patients are sicker and more expensive than patients enrolled in standard Fee-For-Service Medicare. Medicare Advantage is unable to lower costs to the level of Fee For Service so in sheer desperation they blame and then fire physicians.

Articles from Missouri Medicine are provided here courtesy of Missouri State Medical Association

RESOURCES