Study Cites Medicare Advantage Plans Outperform Medicare Fee-For-Service Plans

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Lower Rates of Avoidable Hospitalizations Seen as Key to Ensuring Quality and Controlling Costs in Health Care Reform

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There is a broadly shared concern that hospitalization rates are too high and that a lack of coordination is the cause. Our goal for this report is to provide guideposts for Congress as they write health reform legislation, and to work in partnership to establish sensible market incentives that will lead to coordinated, integrated care as well as continuous patient engagement.

A recent study released by John Hopkins University and commissioned by the Alliance of Community Health Plans (ACHP) found that Medicare Advantage (MA) plans score better than traditional Medicare fee-for-service (FFS) plans in key quality criteria. As an ACHP member plan, CDPHP Medicare Choices exemplifies this recent finding with significantly lower rates of avoidable hospital readmissions, preventable admissions, and emergency department visits than traditional Medicare. Based on 2007 data, the analysis showed that CDPHP Medicare Choices' hospital readmission rate (13.87 percent) was nearly 26 percent lower than traditional Medicare's national average (18.6 percent). Hospital readmissions cost Medicare $17.4 billion in 2004.

The report underscores the assertion that it is possible to improve quality and lower costs in the Medicare program if the delivery system is structured differently. Community-based MA plans like CDPHP are able to keep more of their Medicare members out of the hospital and avoid unnecessary costs because they invest in delivering the kind of coordinated, patient-centered medical care that traditional FFS Medicare-- in its current state-- cannot consistently provide.

"CDPHP Medicare Choices' high degree of coordination and integration of care can serve as a blueprint for achieving better delivery, improved outcomes, and lower costs in the Medicare program," said John D. Bennett, president and CEO, CDPHP. "Our members who face the daily challenges of living with a chronic condition would prefer to receive good preventive care that keeps them healthy and out of the hospital. These results confirm what we see every day-- that our investment in better care results in happier patients and better outcomes."

In addition to a comprehensive care coordination and case management program, CDPHP believes in the patient-centered medical home (PCMH) model of care and is in the midst of a 30-month PCMH initiative with three of its largest Capital Region practices.

The Alliance of Community Health Plans (ACHP) is a Washington-based membership organization of 19 non-profit, community-based, and regional health plans and provider organizations from across the country. These plans are similar to CDPHP because they all focus on improving the health of the communities they serve through integrated and coordinated care delivery.

"ACHP commissioned this report in response to issues raised by Congress, the Obama Administration and the Medicare Payment Advisory Commission (MedPAC)," said Patricia Smith, president and CEO of ACHP. "There is a broadly shared concern that hospitalization rates are too high and that a lack of coordination is the cause. Our goal for this report is to provide guideposts for Congress as they write health reform legislation, and to work in partnership to establish sensible market incentives that will lead to coordinated, integrated care as well as continuous patient engagement."

About CDPHP®
Celebrating its 25th anniversary in 2009 as a physician-founded and guided health plan, CDPHP and its affiliates currently serve members in 29 counties throughout New York state and seven counties in Vermont. The affiliated companies of CDPHP include a family of products: Capital District Physicians' Health Plan, Inc.--HMO, Healthy New York, Medicare Choices (HMO), Medicaid, Child Health Plus, and Family Health Plus; CDPHP Universal Benefits,® Inc.--PPO, High Deductible PPO, EPO, and Medicare Choices (PPO); and Capital District Physicians' Healthcare Network, Inc.--self-insured plans. Visit CDPHP at http://www.cdphp.com.

Contact:
Kristin C. Marshall
(518) 641-5031

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