Medicare Spending, Disparities, and Returns to Healthy Behaviors

The researchers examined persistently low cost Medicare beneficiaries and determined the extent to which health behavior, preventive services, race and socioeconomic status (SES) are related to low spending. Specifically, the researchers (1) estimated cost savings in traditional Medicare spending associated with persistently good health behavior and preventive measures; (2) identified population characteristics that can be used to optimally target preventive interventions; and (3) developed simulation models to show how selectively reducing beneficiary cost sharing for primary and secondary preventive measures can achieve significant costs offsets in reduced spending on traditional Medicare services – this mechanism is referred to as “value-based insurance design.” The objective of the proposed project was to identify which disease states and beneficiary segments show the greatest promise for improved compliance and persistency in use of preventive therapies.