Fallon Community Health Plan outperforms the majority of Medicare

Lower rates of avoidable hospitalizations seen as key to ensuring quality and controlling costs in health care reform

Worcester, Mass., September 1, 2009—In a new analysis comparing Fallon Community Health Plan (FCHP) and a group of similar health plans to traditional fee-for-service Medicare, FCHP was found to have significantly lower rates of avoidable hospital readmissions, as well as preventable admissions and emergency department visits, than traditional Medicare. The report documents that it is possible to improve quality and lower costs in the Medicare program if the delivery system is structured to support coordinated care.

Lower Hospital Readmissions

  • The analysis showed that FCHP’s readmission rate was 18% lower than traditional Medicare’s national average.
  • According to the Director of the Office of Management and Budget for the Obama Administration, Peter R. Orszag, “we could significantly reduce costs and improve quality by moving towards the medical practices adopted in the more efficient parts of the country.” In comments made in an April 2009 blog posting, Dr. Orszag went on to say “a key objective of health care reform must therefore be to align incentives toward better care…”
  • The results of this new report from researchers at Johns Hopkins University and the Alliance of Community Health Plans demonstrate that FCHP’s 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.

Preventable Hospital Admissions and Emergency Department Visits

  • Preventable hospital admissions and emergency department visits were, respectively, 88% and 90% lower for FCHP when compared to the national average of traditional Medicare.
  • Preventable or so-called “Ambulatory Care Sensitive Conditions” are those which could have been prevented had the patient received good primary care and related services. These include conditions such as pneumonia, coronary artery disease, asthma, and diabetes.

“The fact that, as a Medicare Advantage plan, FCHP is outperforming traditional Medicare on these key metrics is no accident,” said Elizabeth C. Malko, M.D., FCHP Senior Vice President and Chief Medical Officer. “In providing care to Medicare beneficiaries, FCHP and its partners, particularly Fallon Clinic, work as a team to achieve these outcomes through very focused efforts. The results of this report confirm that the funding Medicare Advantage health plans receive is a real investment in the health of this country’s Medicare beneficiaries.”

The analysis of FCHP is part of a larger report, authored by Johns Hopkins University researcher Gerard Anderson, Ph.D., and commissioned by the Alliance of Community Health Plans (ACHP), 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 FCHP because they all focus on improving the health of the communities they serve through integrated and coordinated care delivery.

The report documented that it is possible to improve quality and lower costs in the Medicare program if the delivery system is structured differently. Like FCHP, the regional, community-based health plans that are ACHP members are able to keep more of their Medicare patients out of the hospital and avoid unnecessary costs because they invest in delivering the kind of coordinated, patient-centered medical care that traditional fee-for-service Medicare—in its current state—cannot consistently provide.

“ACHP commissioned this report in response to issues raised by Congress, the 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.”

Study highlights

  • Medicare fee-for-service’s average hospital readmission rate (30 days post-discharge) for the country in 2007 was 18.6 percent. The average readmission rate across ACHP plans was 13.6 percent—27 percent less than traditional Medicare’s national average. Hospital readmissions cost Medicare $17.4 billion in 2004.
  • The Medicare fee-for-service rate of preventable emergency department visits was 15.5 visits per 100 beneficiary months in 2007. The average rate across ACHP plans was 2.2 visits per 100 beneficiary months—86 percent lower than Medicare’s national average.
  • The Medicare fee-for-service rate of inpatient admissions per 100 beneficiary months was 19.0 in 2007. The average rate across ACHP plans was 2.5 per 100 beneficiary months—87 percent lower than Medicare’s national fee-for-service average.

Download the study report (pdf)

Lauren M. Petit
lauren.petit@fchp.org

About Fallon Community Health Plan
Founded in 1977, Fallon Community Health Plan is a nationally recognized, not-for-profit health care services organization. From traditional health insurance products available throughout Massachusetts for all populations, to innovative health care programs and services for independent seniors, FCHP supports the diverse and changing needs of all those it serves. FCHP has consistently ranked among the nation’s top health plans, and is the only health plan in Massachusetts to have been awarded “Excellent” Accreditation by the National Committee for Quality Assurance for its HMO, Medicare Advantage and Medicaid products.

About the Alliance of Community Health Plans
ACHP is a membership organization of 19 non-profit, community-based and regional health plans and provider organizations from across the country providing coverage and care for approximately 18 million Americans. These health plans focus on improving the health of the communities they serve through integrated and coordinated care delivery. They are on the leading edge of patient care coordination, patient-centered medical homes, accountable health care delivery, use of information technology, and other innovations leading to improvements in administrative efficiency and the quality of care. They maintain strong community ties and close plan/physician partnerships. Almost all ACHP member plans participate in Medicare, most are in Medicaid, and most also offer coverage in the commercial market. To learn more about ACHP, go to www.achp.org.