How a Growing, Changing Medicare Population Will Impact Payers

February 9, 2023 | Written by: Health Payer Intelligence

The demand for post-acute and long-term care is increasing dramatically and will continue to do so in the decades ahead. The Medicare population continues to expand and is set for rapid growth as the last of the Baby Boomer generation joins the federal program. Numbering more than 70 million, the group that makes up one-quarter of the total population in the United States will be over 65 and part of Medicare by the close of the decade.

This phenomenon will have serious implications for payers serving this demographic under Medicare Advantage plans, as more than 60 percent of Baby Boomers are expected to enroll in Medicare Part C by 2023.

Less than a decade ago, adults aged 65 and older comprised 16% of the US population but accounted for 36% of total healthcare spending. Not only does this group have higher rates of hospital and emergency department utilization compared to others, but they also share similarities that will impact their future quality of life:

  • 80% have one chronic condition
  • 77% have two chronic conditions
  • 75% will require long-term care
  • 40% will require care in a skilled nursing facility

What’s more, the health needs of individuals over 65 are not being met today. According to multiple studies, more than half of older Americans are not receiving at-home assistance, even for those with paid in-home caregivers.

These demographics should come as a warning to health plans serving Medicare beneficiaries to develop provider networks that will meet the evolving needs of Baby Boomers.

“Most who fit that category are relatively healthy now. But as people start hitting their seventies, eighties, and even nineties, that big boom is likely to change in which they’ll wind up frailer and less able to function independently as we continue to age,” says Real Time Medical Systems Chief Medical Officer Steven Stein, a board-certified geriatrician and fellow Baby Boomer.

“We’re living longer with chronic conditions — diabetes, kidney disease, congestive heart failure, dementia — that will create the need for caregivers, and more people will need skilled nursing facilities in the future,” he continues. “As payers begin to think about that change, they want to be prepared for that time when people are more dependent on others to stay healthy and prevent hospitalizations.”

Meeting Expectations

After decades in the workforce and receiving health coverage through employer-sponsored health plans, the incoming wave of Medicare beneficiaries will have certain expectations from their healthcare experience, especially those enrolled in Medicare Advantage.

“There is a need for payers to be that much more informed about the present state of any place in their network, not only for their benefit but also to satisfy the member,” Stein emphasizes. “Payers have old information, and Baby Boomers will not want to go blindly into that next level of care. They are already fearful about it and going to want information about the here and now.”

According to Stein, the decision to use a nursing home is often thrust upon older adults following an unexpected hospitalization or sudden decline in health and is likely not well informed from the point-of-view of patients and family members. The latter will expect payers to help guide them to make the best choices based on reliable information.

In the context of Medicare Advantage, this has tangible consequences.

“Members will want to know that if they join this health plan, they are going to the best nursing homes, the best home care agencies, and the best docs, knowing that they are choosing a small group of outstanding providers,” Stein maintains.

“A good Medicare Advantage program will not only want to lower the cost and improve quality, but it will also want the member to be satisfied because all of those — cost, quality, and satisfaction — have a financial impact on that health plan.”

Payers need better data and ways to inform action to meet changing expectations.

The Value of Data

High-quality data forms the basis for effective planning and decision-making. While nursing homes have adopted electronic medical records that can positively impact care coordination and communication between providers and care settings, their data can present unique challenges.

“Simply accessing an electronic medical record in a nursing home can result in frustration because the information is all over the place,” Stein warns. “What’s needed is an aggregator to pull together the most important information so that staff is acting on the most current information and intelligence. On the one hand, better data allows a health plan to engage the patient, family, and care team. On the other, this information enables clear communication across levels of care to provide an excellent experience.”

The timeliness of this data is proving to be a key differentiator for successful health plans. Real-time information improves time to decision and the effectiveness of decisions.

“Being able to customize care around an individual is much easier to do in 2023 than it was a decade ago,” Stein explains. “Having real-time data and visibility into what’s happening in the facility allows for meaningful conversations at the patient or population level for trends.”

The ability to recognize patterns in care and identify providers who deliver the best care paves the way for payers to improve care, matching the specific needs of individuals with the most qualified sites of care.

With quality having an outsize impact on revenue for payers serving Medicare beneficiaries, health plans cannot afford to ignore data and their ability to analyze information to yield improved outcomes for aging adults.

To learn more about how solutions like Real Time can help, contact us today.

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