Medicare Social HMOs Could Prove ‘Best Model’ for Medicare Reform, Christian Science Monitor Reports

The nation's four Medicare social HMOs have "quietly produced a record of achievement that many health policy analysts believe provides the best model for overall reform of the nation's ailing health care system for the elderly," the Christian Science Monitor reports (Marks, Christian Science Monitor, 5/1). A long-running experiment by Medicare, the four social HMOs were created in 1985 in an effort to keep seniors out of nursing homes by offering extra lifestyle services (Kaiser Daily Health Policy Report, 4/30). In contrast to traditional HMOs' focus on medicine, social HMOs aim to keep people healthy and living independently longer by providing social services, the Monitor reports. Besides paying for beneficiaries' health care needs, social HMOs pay for seniors' "home care," which could include transportation to a doctor or grocery shopping. With such services, many "fragile" seniors are able to remain at home and cost taxpayers no more "than the average Medicare recipient." Nearly 20% of Long Beach, Calif.-based Senior Care Action Network's 44,000 beneficiaries meet criteria for nursing-home admission, yet more than 95% are able to live at home. Eli Feldman, president and CEO of Elderplan, a social home available to 6,000 Brooklyn, N.Y., seniors, said, "It's much cheaper to provide the necessary supports to keep a chronically ill and disabled senior in the community, regardless of his or her medical condition." And the plans are popular with seniors: In surveys, 96% of beneficiaries say "they'd never leave the plan," and 98% say they would recommend the plan to a friend.

Financially Stable
Unlike many Medicare+Choice plans that have cut back services or exited entire markets to stay afloat financially, the four social HMOs are operating in the black or are just breaking even. Social HMOs also have "more financial flexibility" than traditional HMOs because Medicare pays them a "slightly higher fee for frail elderly" beneficiaries and less for healthier beneficiaries. Some critics say that social HMOs' success cannot be replicated on a larger scale because seniors would "come out of the wood work" seeking help, which would "break the Medicare bank," the Monitor reports. But social HMO advocates say keeping seniors out of nursing homes can save "millions of dollars," noting that the Census Bureau estimates 55% of nursing home residents "spend down all of their money within a year," then turn to Medicaid (Christian Science Monitor, 5/1).