Medicare Advantage, Direct Contracting, and the Medicare ‘Money Machine,’ Part 1: The Risk-Score Game
In this two-part post, we will attempt to explain the perverse MA business model that underlies this elevated level of investment, and we will explore its connection to the Direct Contracting model now being tested by CMS. The story is complex, but we think it is worth telling because the stakes for beneficiaries, the public treasury, and our health care system are very high. This business model is distorting health care delivery, creating excessive costs for taxpayers and Medicare beneficiaries, draining the Medicare Trust Fund, obstructing the badly needed value transformation of American health care, and diverting the money needed to fund other social services and goods.
Part one of this post focuses on MA. Part two, to be published tomorrow, will discuss Direct Contracting and suggest some reforms for both MA and Direct Contracting. We also offer a broader reform agenda that calls for expanding the accountable care organization (ACO) model by working directly with providers, rather than investors.
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