The Medicare Advantage (MA) program, which allows Medicare beneficiaries to voluntarily enroll in a private plan that administers health benefits, was established by the Balanced Budget Act (BBA) of 1997 as a vehicle to bring private-sector competition and innovation to Medicare beneficiaries. When the program was announced, the goal was to create greater competition on benefits, care management, and costs, and to offer greater choice and consumer-centricity to America’s seniors.
At the time, value-based care, where providers are reimbursed for the health outcomes of their patients as opposed to the volume of services provided, was not yet the rallying cry of a health system in need of transformation. The impact of private competition on value-based care likely was not even contemplated at the time the legislation was passed. A closer look at the evolution of MA demonstrates that the private sector has proven to be a remarkable laboratory for innovation and progress in our health system’s core evolution—to align the payment and care delivery system with value and the outcomes we care about most for America’s seniors.