Association of daily copayments with use of hospital care among medicare advantage enrollees

Background While the traditional Medicare program imposes a deductible for hospital admissions, many Medicare Advantage plans have instituted per-diem copayments for hospital care. Little evidence exists about the effects of changes in cost-sharing for hospital care among the elderly. Changing inpatient benefits from a deductible to a per diem may benefit enrollees with shorter lengths of stay, but adversely affect the out-of-pocket burden for hospitalized enrollees with longer lengths of stay. Methods We used a quasi-experimental difference-in-differences study to compare longitudinal changes in proportion hospitalized, inpatient admissions and days per 100 enrollees, and hospital length of stay between enrollees in MA plans that changed inpatient benefit from deductible at admission to per diem, intervention plans, and enrollees in matched control plans - similar plans that maintained inpatient deductibles. The study population included 423,634 unique beneficiaries enrolled in 23 intervention plans and 36 matched control plans in the 2007-2010 period. Results The imposition of per-diem copayments were associated with adjusted declines of 1.3 admissions/100 enrollees (95% CI - 1.8 to - 0.9), 6.9 inpatient days/100 enrollees (95% CI - 10.1 to - 3.8) and 0.7 percentage points in the probability of hospital admission (95% CI - 1.0 to - 0.4), with no significant change in adjusted length of stay in intervention plans relative to control plans. For persons with 2 or more hospitalizations in the year prior to the cost-sharing change, adjusted declines were 3.5 admissions/100 (95% CI - 8.4 to 1.4), 31.1 days/100 (95% CI - 75.2 to 13.0) and 2.2 percentage points in the probability of hospitalization (95% CI - 3.8 to - 0.6) in intervention plans relative to control plans. Conclusions Instituting per-diem copayments was associated with reductions in number of admissions and hospital stays, but not length of stay once admitted. Effects of inpatient cost-sharing changes were magnified for persons with greater baseline use of hospital care.