Medicare

Medicare pays for more health care than any other insurer in the United States. It accounts for roughly 20 percent of all U.S. health care spending.

Over four decades, RAND’s research has shaped and refined Medicare policies. Highlights of this extensive body of work include:

• Evaluating the effect of Medicare's inpatient Provider Payment System on quality of care. Researchers found that overall quality remained the same, but that patients were likely to be discharged in an unstable condition.
• Assessing Medicare’s drug benefit. Analysis revealed flaws in the initial design—the so-called "doughnut hole"—led some seniors to discontinue essential medication. This design flaw was later corrected.
• Assessing the experience of Medicare patients over multiple decades, using the Consumer Assessment Health Provider Services (CAHPS)—surveys that capture the reported experiences of patients in different plans and in different settings, including hospitals, emergency departments, and hospices; and the effects of provider resources, such as nurse staffing levels on patient experience. CAHPS has motivated changes in practice and improvements in patient experience.

In more recent work, RAND researchers:

• Evaluated Medicare’s Value-Based Incentive Design (VBID) model.
• Found that Medicare spending on primary care accounts for between 2 and 5 percent of overall spending, suggesting that Medicare may be underinvesting in beneficiaries’ primary care.
• Determined that Medicare Advantage plans outperformed fee-for-service plans on 16 clinical quality measures in three large states.

RAND developed methods and tools for the Center for Medicare and Medicaid Services (CMS).

• RAND developed a user-friendly tool commissioned by CMS to report on hospital performance in the United States.
• RAND analysis continues to help CMS update Medicare’s Star Ratings program, which measures and reports on provider and hospital Part C and Part D performance across multiple dimensions and settings.