Priority Medicare plans fare well

September 5, 2009
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A coordinated approach to Medicare patient care post-hospitalization can play a significant role in keeping patients from being re-admitted within a month, according to a study from Johns Hopkins University and the Alliance of Community Health Plans.

“I think it’s very important from the standpoint of providing optimal clinical care and taking better care of our patients,” said Dr. Jim Byrne, medical director at Priority Health, the health plan owned by Spectrum Health and one of 16 members of the ACHP.

“It’s also very relevant in today’s debate about health reform,” he said.

The study compared re-admissions, preventable admissions and emergency room visits between patients enrolled in traditional Medicare and those in 13 privately run Medicare Advantage plans, such as those sold by Priority Health. The plans studied are ACHP members. Medicare Advantage plans often roll in Part D prescription coverage and offer other features for those 65 and older.

Johns Hopkins found that in 2007, the re-admission rate for traditional fee-for-service Medicare was 18.6 percent, compared to an average rate of 13.6 percent for the private health plans in the study.

The private plans use a combination of services in the week following discharge to keep patients mending at home, Byrne said.

For example, Priority Health employs four nurses who call patients in the week following discharge to review medications, whether an appointment has been scheduled with the primary care doctor, and to make arrangements for additional supportive services, he said.

The study found that Priority Health’s readmission rate for Medicare Advantage patients was 6.94 percent.

“There is a subset of Medicare Advantage health plans that are able to provide care coordination and drive significant improvements in quality and in savings,” Byrne said.

Medicare Advantage has been a fast-growing program for several health insurers in Michigan, such as Humana on the commercial side. Priority Health has about 17,000 Medicare Advantage members and expects to expand the counties where it offers the policies this fall. Some 10.2 million of the 45 million Medicare-eligible Americans have Medicare Advantage programs, according to the Kaiser Family Foundation.

While Medicare recipients have been able to choose private plans since the 1970s, in 2003 the Bush Administration put into place incentives for insurers to offer them. Medicare Advantage plans quickly came under fire after MedPAC revealed that the federal government pays them about 14 percent more than it pays for traditional fee for service Medicare programs. Plans are in place to check the increases Medicare Advantage plans would get in 2010.

But Byrne said he thinks the ability of Medicare Advantage plans to provide those post-hospitalization services — which the study estimated saved $5 billion — proves their success.

“We must improve the delivery system and provide the coordinated care described in this article,” he said. “The point is, this group of plans has been historically able to provide this kind of change.”

The study also showed that:

For preventable hospital admissions, the traditional Medicare rate was 19 per 100 beneficiary months; 13 for Medicare Advantage members of the ACHP insurers; and 1.07 for Priority Health. If traditional Medicare had the same average as the ACHP organizations, the savings would be $4.5 billion.

For emergency room visits, traditional Medicare logged 15.5 visits per 100 beneficiary months; ACHP Medicare Advantage members, 2.2; and Priority Health, 1.07. If traditional Medicare had the same average as ACHP insurers, the savings would amount to $900 million.

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