Advantage Seniors, Commentary, The Wall Street Journal, April 2, 2007

COMMENTARY

Advantage, Seniors

By SCOTT P. SEROTA

April 2, 2007; Page A16

Four years ago, the nation made a commitment to people with Medicare to modernize the federal program so they have access to the same innovative options as America's working families. In addition to adding prescription drug coverage, the Medicare Modernization Act of 2003 stabilized the Medicare Advantage program and expanded it so that all Medicare beneficiaries have access to private plan options, such as HMOs, PPOs and Health Savings Accounts.

Today, all Medicare beneficiaries across the country have access to a Medicare Advantage plan. These plans provide high quality, affordable coverage to more than eight million -- nearly one in five -- Medicare beneficiaries through private health plans that are alternatives to traditional fee-for-service Medicare.

So why were lawmakers proposing cutting billions of dollars from Medicare Advantage during a recent House Ways and Means subcommittee hearing?

Medicare Advantage has proven its value. These plans provide all the services found in traditional Medicare as well as additional benefits such as prescription drug coverage, preventive services and important coordinated care and disease management. Along with enhanced benefits, government figures show Medicare Advantage members save an average of $86 a month compared to those in traditional Medicare. Medicare Advantage enrollees also save an average of $1,200 a year on prescription drug costs.

And those in the program are extremely satisfied. A survey by The Mellman Group for the Blue Cross and Blue Shield Association (BCBSA) shows the vast majority (84%) are happy with their Medicare Advantage plan and virtually all beneficiaries (97%) believe Congress should maintain adequate funding for the program.

Looking to the future, Medicare Advantage holds the best promise for meeting the biggest challenge facing Medicare -- managing care for those with chronic illnesses. Today, 82% of Medicare beneficiaries have at least one chronic condition, with 65% having multiple chronic conditions and accounting for 95% of all Medicare spending. Better management of the most costly and prevalent chronic diseases such as asthma, diabetes, chronic obstructive pulmonary disease and congestive heart failure can lead to significantly lower costs and improved outcomes.

Despite this growing need, a recent report by the Institute of Medicine found that traditional Medicare "does little to encourage coordinated, preventive, and primary care that could save money and produce better health outcomes."

In contrast, Medicare Advantage is structured to focus on prevention and care coordination. Medicare Advantage health plans identify and provide support to those who could benefit from specialized care or who have not received recommended preventive care.

One innovative Medicare Advantage program administered by Blue Cross Blue Shield coordinates care for congestive heart failure patients through a team of physicians and nurses using special home monitoring equipment. The program reduced expected inpatient admissions and emergency room visits by nearly 20%. Another program focused on prevention increased colorectal cancer screening rates by nearly 10%.

What also sets Medicare Advantage apart from the traditional program is competition among private health plans. Medicare Advantage health plans must compete on quality, price, benefits and health outcomes to be successful in the marketplace. This not only motivates plans to offer the best package of benefits at the most competitive price, but also to develop innovative programs to continually improve quality and health outcomes.

As we consider the future, we need only look to the not-so-distant past to see the devastating impact of inadequate payment levels. In 1999, private plan enrollment peaked with 6.3 million members. By 2003, enrollment fell to 4.6 million after plan payments were reduced, and held to 2% annual increases despite double-digit medical inflation. During this unfortunate period, millions of individuals experienced benefit cutbacks, increased premiums, and, in many cases, the loss of their plan as companies were forced to withdraw from the program.

Congress should not repeat these mistakes. Preliminary findings from an upcoming study by Emory University's Dr. Ken Thorpe for BCBSA show Medicare Advantage funding cutbacks would result in three million people losing their Medicare Advantage coverage.

What often gets lost in the numbers is the personal impact on Medicare beneficiaries, who largely live on fixed incomes, worry a great deal about their health care and need security and predictability. We must protect the stability of Medicare Advantage for these people.

While Congress has some tough budget choices to make, lawmakers must realize that Medicare Advantage funding cuts would not only disrupt care for beneficiaries, but leave Medicare woefully unprepared to manage the care for millions of people with multiple chronic conditions. Private sector innovation and competition are working. Let's not turn back the clock.

Mr. Serota is president and CEO of the Blue Cross and Blue Shield Association.