I’m grateful for being able to work on this paper with such a fantastic team: Tim Anderson, John Ayanian, Vilsa Curto, John Graves, Laura Hatfield, Jeff Souza, and Alan Zaslavsky

Thanks also to the NIA for their support!

11/11

Our findings highlight how MA insurers may use selective contracting and narrow networks to reduce costs

The results do suggest that through PCP selection, insurers may also select more profitable enrollees, though this seems to be a more minor part of the story

10/11

Summing up, the chart shows PCPs’ costliness (x-axis) and quality (y-axis), relative to the region average

PCPs excluded from MA networks (grey circles) are more costly and have lower quality than the average, while PCPs included in MA (other colors) are less costly

9/11

Turning to the group of PCPs excluded from all MA networks – they are much more costly than the average in their region, adding 14% to baseline costs ($1,617)

These PCPs also have lower quality

8/11

But, the differences are there!

We find that the average PCP in MA networks is $433 less costly per patient compared with the regional average (saving 2.9% of baseline costs) without a difference in quality

In general, less costly PCPs are included in more MA networks

7/11

Now that we ranked PCPs by costliness and quality, we examine if those in MA networks are better than the regional average

If there is no selective contracting and insurers select PCPs randomly, we shouldn’t observe any differences

6/11

We also assess PCP quality using HEDIS quality measures, that assess adherence to clinical guidelines

For example, one HEDIS measure calculates the share of the PCP’s diabetes patients who receive the recommended biennial eye-exam

5/11

How do we measure PCP costliness?

PCPs are more costly if the costs of their patients in traditional Medicare are higher than what we predict based on their risk score

Basically, a costly PCP would have generated lower profits or higher losses for insurers

4/11

Why focus on PCPs?

They oversee patient care, influencing costs also through referrals to particular specialists and hospitals

Insurers may also exclude PCPs from networks to avoid costly patients (e.g. in a poor neighborhood)

3/11

Selective contracting with providers is a classic tool for managed care insurers

We show that insurers in Medicare Advantage (MA) leverage selective contracting with less costly primary care physicians (PCPs) to cut costs, mostly without hurting quality

2/11