BETTER

Research shows that this type of active care management is not only less costly than traditional fee-for-service medicine, but it also improves patient health.

The Boston Consulting Group confirmed this in 2013 when my colleague Daniel Gorlin and I did a detailed comparison of claims data for some 3 million Medicare patients.

What we found was that patients in the more managed programs, such as Medicare Advantage HMOs, had lower mortality rates and enjoyed better health and fewer complications than traditional fee-for-service patients.

Single-year mortality rates, for example, fell from 6.8 percent in the feefor-service sample to 1.8 percent in the managed care models. These death rates declined quickly, within the first year of enrollment.

The lowest mortality rates and the best performance overall were seen in “capitated” HMO plans, where the HMO receives a flat fee for each patient and is then responsible for all of the patient’s medical needs.

Our research also showed that the Medicare Advantage patients averaged shorter hospital stays and fewer readmissions. Compared to the fee-for-service sample, the capitated HMO sample had hospital stays that were on average 19 percent shorter.

The big insurers have continued to learn from their experience with Medicare Advantage.

One company’s chronic care program, for example, developed in 2012, reduced hospital admissions among the 235,000 participants by some 45 percent.

The big merger story isn’t so much about who buys whom. It’s what the newly consolidated companies do with their newfound scale, market position and, above all, expertise.

In recent years the large health insurers have learned a lot about patient health, managing care and the role incentives play. The mergers should enhance their capabilities, leading to additional reforms and better health care for all of us.

Jon Kaplan is a Chicago-based senior partner at the Boston Consulting Group and leader of its health care payers and services team in the Americas. Readers may write him at BCG, 300 N. LaSalle, Chicago, IL 60654.