Best Bets for Reducing Medicare Costs for Dual Eligible Beneficiaries: Assessing the Evidence

With pressure mounting to slow the growth in federal health care spending, policymakers are exploring ways to reform the way care is delivered to the 9 million low-income Medicare beneficiaries who also receive Medicaid – a group that on average is sicker and frailer than other Medicare beneficiaries, and therefore receive significantly more care at greater cost. Major efforts are underway at the federal and state level to better coordinate care for this population and lower health care costs – with some estimates projecting hundreds of billions of dollars in savings over the next decade.

This study reviews prior pilot projects and demonstrations and finds support for modest Medicare savings through well-targeted interventions. Authored by Randall Brown and David R. Mann of Mathematica Policy Research, the authors point to a small number of fully integrated, capitated managed care programs and fee-for-service based interventions for dual eligible beneficiaries that succeeded in reducing hospitalizations, although few of these programs were able to demonstrate net savings for Medicare.

The study neither examines the potential for federal and state Medicaid savings nor analyzes whether the new initiatives just getting underway could achieve Medicare savings, but provides a synthesis of earlier evidence that could inform those efforts.

Issue Brief (.pdf)