In social HMOs, a model for healthcare reform
They make it easier for elderly to keep living at home - and, unlike traditional HMOs, they're not losing money.
As Washington grapples with ways to ward off the eventual insolvency of Medicare, a feisty but fragile Josephine Castoria is living proof that effective healthcare can be provided without breaking the bank.Skip to next paragraph
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The octogenarian has had a series of health problems that could easily land her in a nursing home, costing a minimum of $30,000 a year.
Instead, she lives comfortably in the brick apartment house in Brooklyn where she has resided for the past 27 years with her disabled son - at no more cost to taxpayers than the average Medicare recipient, about $5,000 a year.
But she has full prescription drug benefits and the confidence that all her needs will be taken care of - from shopping to getting to the doctor. Someone will even come in to help her change a light bulb or repair a leaky faucet. "I would never want to go into a nursing home," she says. "I'd rather try to do things myself."
Believe it or not, Mrs. Castoria is on Medicare - and the extra services she receives, in the long run, actually end up saving the government money.
She's a member of an experimental project called Elderplan, which pays for her home care as well as her healthcare. It is one of four so-called "social HMOs" in the country.
Though they've been around for a number of years, the social HMOs have quietly produced a record of achievement that many health-policy analysts now believe provides the best model for overall reform of the nation's ailing healthcare system for the elderly.
And with the baby-boom generation just around the corner from 65, and ready to dip into Medicare funds, health-care experts say it's all the more urgent to integrate such innovations into the larger Medicare program.
"I believe this is the approach that healthcare and managed care should be taking," says Walter Leutz, a health-policy analyst at Brandeis University, who's studied social HMOs. "They need to extend themselves to include these kinds of community support services."
What's different about social HMOs
The goal is to keep people healthy and living independently longer. Traditional HMOs try to do that on the medical side. But since 1997, when Congress encouraged managed-care organizations to take Medicare patients, many have cut services or stopped taking them altogether - citing financial concerns.
The nation's four social HMOs, on the other hand, are in the black or breaking even. They're also expanding. One difference is that the social services they provide make it easier for the elderly to continue living at home. A small thing, like having someone come in to change a light bulb, can prevent injuries to seniors.
The other difference is the payment schedule. Medicare provides social HMOs a slightly higher fee for frail elderly subscribers, but less for healthy ones. The result is that they have more financial flexibility.
"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," says Eli Feldman, Elderplan's president and CEO.