June 15, 2009 01:00 AM

Policy distinctions

Medicare Advantage works for urban seniors

Martin Hauser

As the president of a healthcare plan in Ohio, I am used to answering for the shortcomings of our industry. When neighbors vent to me at the grocery store that medical bills are driving them to the poorhouse, it never seems to matter that our plan, SummaCare, has been named one of the nation’s top health plans, or that our 120,000 members consistently give us high marks for service. I’m painted with the same brush as the worst actors in our industry. I understand. It comes with the territory.

But when that same broad brush is applied by policymakers, the results can be counterproductive. All health plans are not created equal. A case in point is the Medicare Advantage program, which a recent cover story (April 13, p. 6) described accurately as a favorite target of both Congress and the Obama administration. At SummaCare, we believe that competitive bidding, if done right, can weed out bad actors and benefit seniors in a way that is sustainable for the Medicare program. (And by “done right,” I mean not like the recent CMS adventure over its new competitive bidding program for durable medical equipment, which drove 90% of small firms out of the process.)

In our view, however, it is not in anybody’s interest to eliminate the program altogether. Doing so would be the ultimate example of throwing the baby out with the bath water for more than 10 million seniors. There are three reasons why:

First, Medicare Advantage is still the only alternative for seniors who need more coverage than regular Medicare provides but who cannot afford the price of supplemental insurance. While regular Medicare has been a financial lifesaver for millions, its benefits are severely limited, and it leaves seniors responsible for either a 20% copayment or supplemental insurance that costs as much as $500 a month. Medicare Advantage offers additional coverage to seniors at a more affordable rate.

Second, many Medicare Advantage plans are performing exactly as Congress intended: offering much better coverage at roughly the same cost as original Medicare. It is true that some plans cost more than regular Medicare. That’s because Congress had to offer insurers enhanced rates to entice them to offer coverage in rural areas, where it is more costly to coordinate care. The vast majority of urban plans such as SummaCare are still constrained to produce better value at roughly the same cost as regular Medicare—and we are.

Third, cutting the Medicare Advantage program entirely would mean eliminating the one place in our system where care for older Americans is being coordinated every day—something that everyone agrees is an essential element to getting health costs under control. The fundamental difference between regular Medicare and Medicare Advantage is that Medicare is a payment system, while Medicare Advantage is a health delivery system that actively manages the care of our seniors. Seniors with chronic conditions in our SummaCare plan are assigned a care manager who guides them through the system, ensuring that their doctors communicate, and that they don’t receive conflicting medication or treatment. This coordination leads to markedly better outcomes.

At SummaCare, our readmission rates for hospitals are 50% better than regular Medicare. Why is this important? Because as President Barack Obama has said for more than a year: “Reducing readmission rates can save taxpayers billions of dollars.”

As I’m often reminded at the grocery store, private health plans are an easy mark. We should welcome change—and competitive bidding will bring change. But we should resist cutting Medicare Advantage plans outright.

If it were to happen, our seniors will have just two choices: either the limited coverage of regular Medicare, or the often unaffordable coverage of supplemental insurance, all at a time when unmanaged chronic care among seniors is the primary cause of rising health costs. That would bring about a medical procedure no health plan would recommend: cutting off our nose to spite our face.

Martin Hauser is president of SummaCare, Akron, Ohio.

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