Mercer: Patient-Centered Care Sees Positive Health Outcomes and Lower Costs for "Medigap" Population

Providing personalized health care to users of Medicare Supplement insurance, or “Medigap,” plan beneficiaries improved health outcomes, reduced care fragmentation and lowered costs for both Medicare and patients, according to recent analysis by Mercer of a pilot program. By providing intensive case management to patients with complex care needs, the pilot achieved a Return on Investment of $1.82 per dollar invested, 81 percent of which directly benefits Medicare (see Figure 1).

These promising findings and other insights are published today in a Mercer white paper titled “Integrated Patient-Centered Care Management in the Medicare Supplement Population”. The white paper represents the culmination of a three-year evaluation of a pilot program conducted between 2009 and 2012 with more than 28,000 AARP Medicare Supplement Plan beneficiaries insured through UnitedHealthcare. Participants in the pilot were at least 65 years of age and had multiple health conditions and/or life-threatening illnesses. Each participant was supported by a trained team of nurses, social workers, behavioral health specialists and medical directors.

The objective of the initiative was to gain a better understanding of the characteristics, needs and general health of AARP Medicare Supplement Plan patients, while preserving freedom of choice, enhancing care coordination and managing costs in the current fee-for-service environment. The pilot tested various care management approaches to determine how best to support the health and needs of this population.

“The Medigap population represents approximately 20 percent of the 50 million Americans covered by Medicare, yet it is not a well-researched or understood demographic,” said Mercer’s Dan Gold, PhD, a Principal and co-author of the white paper. “Until recently, very few attempts have been made to deliver coordinated health care to this population. Results of the pilot suggest a patient-centered approach addressing comprehensive social, logistical and medical needs achieves the greatest savings and also produces high patient satisfaction ratings.”

“This pilot project shows that a patient-centered approach is a win-win situation for patients and their families, insurers and Medicare,” said Charlotte S. Yeh, MD, Chief Medical Officer of AARP Services, Inc. “Focusing on patients’ individual health and home care needs improves outcomes, enables people to continue living independently and saves everyone money.”

“As the long-term goal of shifting the Medicare paradigm from fee-for-service to fee-for-value continues, many have rightly asked what can be done in the short term during this transition,” said Mercer’s Kristin Parker, PhD, a Principal and co-author of the white paper. “While more research is needed, our review of the data from the pilot program conducted with AARP Medicare Supplement Plan insureds indicates that a patient-centric approach has the potential to improve both affordability and health outcomes for Medigap users with the most complex needs.”

To download the full Mercer analysis that includes other key findings and suggested approaches, please visit http://www.mercer.us/insights/point/2014/integrated-patient-centered-care-pdf.html

About Mercer’s Analysis

Mercer was retained by AARP Services Inc. (ASI) to provide guidance on the program evaluation and design of care management pilot programs for Medicare beneficiaries enrolled in AARP Medicare Supplement Plans insured through UnitedHealthcare. In addition, Mercer helped interpret the results of the program evaluation based on information and materials provided by UnitedHealthcare.

About AARP Services, Inc.

AARP Services, Inc., founded in 1999, is a wholly-owned taxable subsidiary of AARP. AARP Services manages the provider relationships for and performs quality control oversight of the wide range of products and services that carry the AARP name and are made available by independent providers as benefits to AARP’s millions of members. The provider offers currently span health products, financial products, travel and leisure products, and life event services. Specific products include Medicare supplemental insurance; credit cards, auto and home, mobile home and motorcycle insurance, life insurance and annuities; member discounts on rental cars, cruises, vacation packages and lodging; special offers on technology and gifts; pharmacy services and legal services. AARP Services also engages in new product development activities for AARP and provides certain consulting services to outside companies.

About Mercer

Mercer is a global leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people. Mercer’s 20,000 employees are based in more than 43 countries and the firm operates in over 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital. With 55,000 employees worldwide and annual revenue exceeding $12 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a global leader in management consulting. For more information, visit www.mercer.com. Follow Mercer on Twitter @MercerInsights.

Figure 1: Savings distribution* from intensive case management during Medigap pilot program