Pilot program aims to overhaul Medicare

Wednesday, November 30, 2005

CATONSVILLE, Md. - Although John Erickson's new Medicare pilot program is centered in the long-term care sector, his ultimate goal is to fundamentally change the entire system.
Erickson, founder and CEO of Erickson Retirement Communities, recently launched a Medicare experiment called Erickson Advantage, a managed health plan covering some 15,000 residents in nine states. Using interventions such as bone density and balance testing to drastically cut hospitalization rates for osteoporosis-related hip fractures, Erickson has promised CMS that his program will deliver a 30% savings in healthcare costs.
If successful, Erickson believes his template can be used for similar pilot programs outside the controlled senior living environment, such as home medical equipment services.
"My guess is that it can," he said. "We have total control of physician and service coordination, but the next step would be reaching out to the community--connecting at the same level. The third step is total coordination. I think it has the best chance in communities like Sun City where there is a predominant senior population."
Medicare experts in the HME sector are encouraged by the Erickson program and agree that it has potential.
"This concept has been tried before but it didn't work because there were too many providers, too many contracts and too many negotiations," said Patrick Dunne, founder of Anaheim, Calif.-based Healthcare Productions. "This guy has put his arms around the continuum and his model is quite nice. I'd be very interested in finding out how he handles residents with chronic lung diseases. With correct application of evidence-based care management strategies, individuals with respiratory conditions could just as easily be handled."
Alison Cherney, president of Brentwood, Tenn.-based Cherney and Associates, said the Erickson plan could be a remedy to the arcane reaction-based Medicare system and that the HME community should take notice.
"I applaud this man," she said. "As we all know, CMS is not logical in the way it pays--it sets up crazy payment schemes. They set up individual silos and do not look at the effect that squeezing payments has on other silos."