Rx for Medicare

SOCIAL SECURITY reform will dominate politics and be the subject of much debate for months to come. However, failure to address rising healthcare costs, by changing the way Medicaid and Medicare-funded care is delivered, could undermine efforts to ensure financial security for many retirees.

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Over the next 75 years, the government is expected to pay more than $27 trillion in healthcare benefits promised to seniors -- seven times its Social Security obligations for that period. Further, a recent analysis by Urban Institute researchers suggests that by 2040, typical seniors might have to spend approximately one-fifth of their Social Security benefits on Medicare premiums.

Simply cutting funds for federal healthcare programs would be shortsighted and potentially devastating to millions of older Americans, including more than 960,000 in Massachusetts. A better way to control costs while improving the quality of healthcare is to rethink the traditional models for delivering care.

Chronically ill patients with five or more medical conditions made up only 20 percent of all Medicare beneficiaries in 2004 but accounted for more than two-thirds of the program's $302 billion in costs. In any single year, such patients are likely to fill up to 20 separate prescriptions, visit emergency rooms a dozen times or more, and require hospitalization at least five times. Too often these patients must make sense of an array of confusing, even conflicting, information. This fragmentation of care can lead to poor health outcomes that are unnecessarily costly and draining for patients and physicians alike. We can reduce this burden by organizing our resources more efficiently and effectively.

The traditional Medicare and Medicaid fee-for-service systems are structured primarily to provide acute care, not to meet the needs of the chronically ill. These latter patients require comprehensive management of their health, emphasizing coordination of multiple treatments, health maintenance, and prevention of disease. While there has not been any effort to implement a care model of this kind on a national scale, many smaller programs have already demonstrated this approach's value in reducing costs and improving care.

For example, On Lok SeniorHealth, a community-based organization in San Francisco, provides seniors with a complete program of health services -- preventive, acute, and rehabilitative care -- along with home healthcare, social services, and such personal assistance as meal delivery, transportation, and help with prescriptions. On Lok's patients report better overall health and fewer acute-care needs and hospitalizations than comparable groups of Medicare beneficiaries.

I have also seen the impact of this care model at my own company. Our Evercare plans identify the most costly, at-risk patients and deliver care within a system of careful monitoring and management. At the heart of this system are practitioners who coordinate multiple services, facilitate communication between providers and patients, and ensure integration of treatments.

Evercare is also working with Massachusetts to ensure this kind of care is brought to seniors living in nursing homes, as well as to home-based elderly and disabled. The Massachusetts Senior Care Options program provides enrollees with hands-on medical care coordination as well as home care support services, such as outfitting the home for special needs, housekeeping, transportation to physicians' offices, and meals.

Again, there is evidence that the model can reduce costly, redundant services while improving patient care. Federally commissioned studies of Evercare programs in several states showed that they slashed hospitalizations in half while gaining a 97 percent satisfaction rating from participating families. The Centers for Medicare and Medicaid Services point to Evercare as the model for the Special Needs Plans included in the Medicare Modernization Act of 2003. In Texas, another program using this model saved more than $100 million in two years and improved seniors' access to services.

The long-term survival of Medicaid and Medicare may depend on the wide adoption of this approach, whether it is offered by private companies such as Ovations or not-for-profit programs like On Lok. We have an opportunity to do so for the chronically ill within the framework of the Medicare Modernization Act's Special Needs plans. However, both the public and private sectors need to do a much better job of analyzing the effectiveness of alternative-care models and applying evidence-based lessons on a nationwide basis.

By working together, public and private leaders have the opportunity to improve the quality of life for more than 41 million older Americans and conserve Medicare resources. This issue also affects younger generations, who must have the security of knowing that their parents, and then they themselves, will be well cared for as they age. But we need to move quickly, beginning this year. If we wait until Washington deals with Social Security and other issues on its agenda, we may simply run out of time.

Lois Quam is chief executive officer of Ovations, the division of UnitedHealth Group that focuses on the healthcare needs of the over-50 population.