Alliance for Health Reform/Kaiser Family FoundationWashington, DCJuly 16, 2007

Medicare Advantage:Restructure Payments for Results

Joseph Antos, Ph.D.

Wilson H. Taylor Scholar in Health Care

and Retirement Policy

American Enterprise Institute

2

Key MA payment principles

Capitation

Risk adjustment

Competitive bidding

3

Why is there a problem?

Aftermath of BBA97

Regional politics

Flawed bidding system

Incomplete competition

4

Current rhetoric focuses on “pay-fors”

Willie Sutton was right—

Go where the money is!

1653.9

581.9

328.7

0200400600800

10001200140016001800

$ billions

FFSMedicare -

A & B

MA - A & B Part D

5

Broader policy objectives

Better value—from FFS and MA

Innovation in health care delivery

More sensible benefit structures

Fiscal restraint

Options for consumers

6

Treat the cause, not the symptoms

Take a lesson from Part D Plans bid against each other, not

against benchmarks

Transition to full competition Remember “comparative cost

adjustment”? FFS and MA should be on an equal

footing on all dimensions, not only payment

Hold FFS and MA accountable for improving care delivery

Requires major FFS reform