Statement of Cheryl M. Scott, President and Chief Executive Officer,
Group Health Cooperative, Seattle, Washington

Testimony Before the Subcommittee on Health
of the House Committee on Ways and Means

Hearing on the Medicare+Choice: Lessons for Reform

May 1, 2001

I. Introduction

Madam Chairwoman and members of the Subcommittee, thank you very much for the opportunity to testify on our experiences in serving Medicare beneficiaries. I am Cheryl Scott, President and Chief Executive Officer of Group Health Cooperative based in Seattle, Washington. Founded in 1947, Group Health is a not-for-profit and with nearly 600,000 members, is the nation's largest consumer-governed health care organization.

Group Health Cooperative has a long-standing commitment to serving Medicare beneficiaries. Shortly after Medicare's creation, we began working with the government to design a program that would allow Medicare to work with prepaid health care organizations like Group Health. In 1976, we were the first organization to partner with the government under what was then referred to as the Medicare risk program. At present, we serve nearly 60,000 Washington state beneficiaries under Medicare+Choice.

II. Value in the Pre-Paid Model of Care

Over the years, the program's name has changed, but the fundamental concept - serving Medicare beneficiaries through a pre-paid model of care - has remained the same. This model allows us to direct resources to areas of greatest need and to be creative and innovative in designing programs. Simply stated, when you are not paid on an encounter by encounter or procedure by procedure basis, you can shift your focus to include longer-term improvement in health outcomes.

 Pre-payment has enabled Group Health to deliver care over a broad continuum by investing in prevention programs to help people stay healthy, while at the same time making sure that individuals receive comprehensive care they need when they are ill. It also has enabled Group Health and other plans to develop highly integrated and coordinated care delivery systems by creating opportunities for physicians, hospitals, and other health providers and facilities to associate with each other. These systems of care are particularly crucial for Medicare members, who often have multiple health issues and see more than one provider.

III.  Innovations in Serving Medicare Beneficiaries

Group Health has developed programs related to chronic illnesses common in the elderly including depression, diabetes, and heart disease. We also have initiatives in prevention and acute care for conditions such as breast, cervical, and colorectal cancer. At present, work is underway on a "senior care roadmap" that will unify these initiatives with other special needs of seniors, including fall prevention and medication management.

Although the programs span a wide spectrum of health care conditions and approaches, they all reflect the partnerships created between an organization, patients, clinicians, and other providers that are the heart of the pre-paid model of care. Group Health Cooperative, our members, and providers have worked hard to devise these programs. I am pleased to have the opportunity to share more information about some of them today and to talk about how we partner with our providers and members in developing them.

 Partnering with Providers to Improve Care Delivery for Medicare Beneficiaries

Focus on Evidence-Based Medicine

Since Medicare's inception, the practice of medicine has changed dramatically. Technologies and therapies considered to be highly advanced just years ago are quickly becoming outdated. Helping our providers keep up with changes and the best approaches to care is one of the most important contributions of Group Health's care delivery model. Our focus on evidence-based medicine - a systematic approach to collecting and critically evaluating available scientific evidence on treatment options - seeks to offer practitioners and patients the information they need to make informed decisions about treatment options. It also helps ensure that health care dollars are being spent on treatments that have proven benefits.

Since 1990, clinicians working in collaboration with the Guideline Development Support Team have developed more than thirty guidelines. Several of these guidelines address the treatment or prevention of conditions prevalent among Medicare beneficiaries including cancer screenings, diabetes, cardiovascular disease, heart failure, depression, and osteoporosis. These guidelines are meant to be useful aids in determining appropriate practices for many patients with specific clinical problems or prevention issues. They are not intended to replace an individual practitioner's clinical judgment or establish a rigid standard of care.

Teaming Up On Heart Disease Through The Heart Care Road Map Team

The Heart Care Road Map Team is one specific example of how our evidence-based approach can improve health outcomes for our Medicare members. The Team includes cardiologists, family practitioners, nurses, pharmacists, a health educator and quality improvement specialists, among others. Together, the Team works to analyze and evaluate available scientific evidence about heart disease and best available treatment methods, and then shares its findings and recommendations with our practitioners.

Recently, the Team decided to recommend doubling the prescribed dosage level for an angiotensin-converting-enzyme (ACE) inhibitor given to patients with heart disease. The decision was based on a Project HOPE study of nearly 10,000 subjects from 270 hospitals that indicated that for every 27 patients treated with an ACE inhibitor for five years, one death from cardiovascular disease, myocardial infarction, or stroke was prevented. Our system for evaluating and implementing evidence-based medicine, as recommended in the recent Institute of Medicine report, allowed us to respond quickly to this breakthrough study.

In addition, Group Health has an electronic disease registry, which helps our practitioners monitor whether cardiac patients are getting the treatment they need and clearly shows whether a patient is due for a cholesterol check or has been offered the currently recommended therapies. We know that our work in this area is paying off. Our 1999 Health Plan Employer Data and Information Set (HEDIS) performance measure showed that 87 percent of our adult members who had a heart attack received beta-blockers, which have been shown to lower blood pressure and reduce risk for another heart attack.

Improving Beneficiaries' Health and Well-Being Through Exercise

In the early 1980's, Group Health partnered with the University of Washington to examine key determinants of seniors' health and found that regular exercise and social interaction were the two most important factors. Since then, other studies have validated their findings. There is no segment of the population for whom exercise is not important. Whether an individual is 65 or 95, whether they are already physically active or restricted to wheelchairs, whether they are healthy or have painful crippling conditions, we know that exercise can make a difference. We also know that people with functional deficits have been shown to benefit the most from exercise.

With this in mind, Group Health set out to bring the benefits of exercise to individuals who have disabilities or serious, chronic medical conditions such as heart disease, chronic obstructive pulmonary disease (COPD), arthritis, diabetes, and depression. One outcome of this effort is the "Lifetime Fitness" program offered in 5-week sessions in community senior centers around the area. Aside from the fitness component, the program offers members opportunities to socialize and to develop a community support network. To give you an idea of this aspect of the program, I share with you the following quotation, which appeared in Group Health's Senior Outlook Newsletter:

"We have a telephone committee that calls members who have been absent two times in a row, just to tell them we miss them," he says. "A greeters committee helps new members feel at home, and another committee organizes occasional lunches out after class."

Group Health Medicare+Choice Member, Age 87;
Lifetime Fitness Participant for 2 Years

In addition to Lifetime Fitness, the Care Center at Kelsey Creek, Group Health's long-term care and skilled nursing facility, is working on an exercise program for nursing home patients that will serve as a model for our most frail beneficiaries. Finally, I urge you all to read the article submitted as an attachment about "Dancing Ladies" a ballet-based exercise program for women, many of whom have serious mobility difficulties.

 Group Health takes its work in this area very seriously, and we continually strive to improve our programs. As such, we are evaluating our fitness programs to assess their impact on key health indicators. These evaluations will help us identify the need for any modifications to ensure that our programs meet the goals of "healthy aging" - optimizing function, preventing avoidable decline in health status, and enhancing quality of life.

Providing Beneficiaries Opportunities To Have A Greater Voice In Their Care

We believe that pre-payment is the basis for our innovations in health care for Medicare beneficiaries and that it creates unique opportunities for patients and providers that are not necessarily available in an encounter-based system of care. Unlike a system that pays by the encounter, a pre-payment system lends itself to establishing longer-term relationships and partnerships between the organization and individual. Group Health's Senior Caucus, a board-recognized special interest group, is perhaps one the best examples of these partnership opportunities. Senior Caucus members participate in a variety of activities including the work on our senior care roadmap. Group Health provides support for its activities, but the Senior Caucus operates independently under its own rules and policies. Since its founding nearly twenty years ago, members of the Senior Caucus have helped to develop:

· The Senior Peer Counseling Program, which offers short-term problem solving and "talking support" by trained senior volunteers.

· The Group Health Resource Line, which is staffed mainly by senior volunteers. Originally the Senior Information Line, it was expanded in 1990 to include health information for Group Health patients of all ages and connects Medicare members to services available through group Health and the greater community.

· Silver Glen, the only senior housing cooperative in the Greater Seattle area.

· The Senior Outlook Newsletter, which educates all senior members with timely articles about health promotion and current events in and around the Cooperative

· Senior health promotion pamphlets, available through Group Health medical centers and the Group Health Resource Line.

In addition to having a say in program development and the Cooperative's governance, Group Health seeks to provide our Medicare members with a greater voice and role in their own care through our health education and promotion projects. At present, we have classes, workshops, forums, and support groups on a wide range of topics including Alzheimer's disease, cancer, diabetes, grief and loss.

One more specific example is Group Health's "Living Well with Chronic Conditions Workshop," a six-session workshop to help people learn how to manage their conditions and improve their quality of life. Workshop participants learn how to set realistic goals, achieve successes and build confidence in managing their health, covering topics such as nutrition, exercise, stress management, medication management and planning for the future.

IV. Ensuring The Viability Of The Medicare+Choice Program

Group Health Cooperative, like other plans here today, offers Medicare beneficiaries lower out-of-pocket costs and additional benefits not available in fee-for-service Medicare. These aspects of Medicare+Choice are tremendously important to our members, particularly those with lower incomes who might otherwise face financial difficulties in accessing needed care. As described here today, our model of care under the Medicare+Choice program - for which the keystone is pre-payment - enables us to provide beneficiaries much more.

Group Health appreciates Congress' efforts to address payment and regulatory issues that in recent years have challenged plans' abilities to continue their participation in the program. As a result of the Benefits Improvement and Protection Act (BIPA), Group Health was able to reduce our members' 2001 Medicare+Choice monthly premium by $13. We put some of the additional funds into the benefits stabilization fund to help minimize any future premium increases that we might have to make. We also increased payments to our physicians and hospitals. We believe, however, that more needs to be done, particularly with respect to the regulatory environment. With that in mind, we offer the following:

· Honor the Intent of Congress When Implementing Risk Adjustment: The Health Care Financing Administration's (HCFA) current approach to risk-adjustment reduces Medicare+Choice payments, which has contributed to the instability in the program. Group Health urges HCFA to implement the risk-adjuster in a budget neutral manner, as expressed by Congress in the conference agreement that accompanied the Balanced Budget Refinement Act of 2000. In addition, HCFA's approach to implementing the "all-site" model based on collection of 100 percent encounter data from inpatient and outpatient settings is placing enormous demands on organizations and their providers. We urge HCFA to consider less burdensome alternatives that meet the goals of risk-adjustment.

· Improve the Partnerships between HCFA and Medicare+Choice Organizations by Establishing Single Administrative Unit for Medicare+Choice Program Oversight: We recognize that HCFA has many competing demands and responsibilities. However, the current oversight infrastructure for Medicare+Choice - which involves three separate offices - has often resulted in fragmented and unnecessarily complex policy making, which has been problematic for Medicare+Choice organizations and beneficiaries. We believe that consolidating Medicare+Choice program administration and oversight within one HCFA division, which has a Director who reports directly to the HCFA Administrator, would go a long way toward improving the partnerships between HCFA and plans.

· Refocus HCFA's Quality Program: Clearly, Medicare+Choice organizations must be held accountable for the quality of care they deliver to Medicare beneficiaries. We believe, however, that HCFA's current approach to implement the quality requirements of the Balanced Budget Act of 1997 (BBA) through the Quality Improvement System for Managed Care (QISMC) has presented some challenges.

Group Health has received accreditation from the National Committee for Quality Assurance (NCQA). One of our primary concerns is that QISMC continues to lack clear coordination with NCQA and reporting standards of other organizations. This lack of coordination undermines the ability to develop and implement a meaningful process for deeming plans in compliance with quality requirements, which was a goal of the BBA. In addition, when QISMC is fully implemented, the number of quality projects required to be undertaken at one time, as well as the follow-up work on completed projects, will challenge plans' abilities to devote sufficient attention to each one. For these reasons, we recommend that HCFA reassess its quality oversight requirements. Specifically, we urge HCFA to reconsider its deeming approach to avoid undue interference with private sector standards and to reduce the number of QISMC projects.

· Reduce the Scope of Standardization of Beneficiary Materials: Group Health supports the goals of the standardization project - to ensure that information conveyed to beneficiaries is easily understood and to enable easy comparisons among plans. The HCFA initiative to standardize beneficiary materials appropriately focuses on comparative information about Medicare+Choice benefits. However, it also includes beneficiary information that is not used for plan to plan comparisons and which contains plan-specific information. We recommend revising the standardization initiative to focus solely on continuing to improve the standardized Summary of Benefits, which even though it has been in use for two years, still includes language that is confusing.

 V. Conclusion

The current debate on Medicare reform presents tremendous opportunities for the same type of innovation in care delivery that we and other plans achieved by working with Congress and the Administration more than twenty years ago. The Medicare+Choice program - the latest iteration of pre-paid Medicare - has much to offer both in the present and future. We urge the Subcommittee to consider the valuable contributions made by organizations like Group Health in serving our nation's beneficiaries and to preserve and strengthen a pre-paid option under Medicare.

"Dancing their way to better health"
from Group Health Cooperative's Senior Outlook, Fall 2000

Last year I noticed that a number of the senior patients in my family practice at Northgate Medical Center were in downward spirals.

 Many of them were coming into my office, the emergency room, or the hospital because of chest or stomach pain, arrhythmias, fatigue, headaches, depression, and anxiety. Often their children would come with them and plead, "Mom/Dad is going downhill. Isn't there anything you can do?"

There wasn't. Not in my entire medical bag of tricks. Medications never solved their problems and, while I encouraged them to exercise and get out socially, they lacked the motivation and will.

When I thought about the patients as a group, their stories were very similar. A couple of them had lost spouses in the last few years and had become isolated from the world. Some were facing moves from their lifetime homes to retirement apartments and were suffering major depression. Most of them had chronic conditions that were limiting their independence and their ability to enjoy life.

In short, each of my patients was facing huge losses. They all believed they were burdens to their families and friends, and the most common way they described themselves was "useless."

One day I was talking to a ballerina friend of mine who was preparing a dance about the miracle of the aging female body. I suddenly knew what we could do for those patients I'd been worrying about so much. We could start an exercise group at Northgate Medical Center--led by ballet instructors--that focused on muscle strengthening and flexibility, beauty and grace.

I went back to each of the patients and invited them to a ballet-based exercise program that would meet three times a week for four-and-a-half months. I told them that they should join only if they could come regularly and would be willing to put on a performance in the community at the end of the program. I also invited everyone to have lunch together one day a week after class.

Out of the 21 people invited to participate, 16 of them--all women--joined and attended almost every session. The most physically challenged of them had to take ACCESS vans or cabs to get there, and all of them had to challenge themselves to "just do it." That's no small feat when you're depressed and anxious, as we all know, but they came and they did do it.

About a month into the program, the women started talking about how much the class was helping them physically. "I can turn my head to look out the back window of the car now instead of just depending on the mirror," one said. "I can stand up and even hold a cup of coffee," said another who had been suffering from major balance problems.

At the weekly lunches after class, we talked about our lives, our families, our challenges, and our accomplishments. The women bonded as a group in a powerful way and, as they did, they began talking about the class in terms of friendships, perseverance, renewal, support, and love. Their strength and social integration had already gone further than I had ever imagined--and the wonderful result was that they almost never had to visit my medical office.

The idea of putting on a performance at the end of the program was originally just a tool for getting the women to think about who they were, how remarkable they were, and what they would say to the world if they had a chance. What piece of wisdom, or glimpse into their lives and history, would they share?

The performance was held at On the Boards in downtown Seattle in May. That night, backstage, these once shy and withdrawn women were like beautiful 16-year-olds--giddy and nervous. Their spouses, children, grandchildren, and friends were in the audience, ranging in age from 96 years to 10 days.

One by one, each woman took her turn at the microphone at center stage. One got up from her chair by herself--something she'd been struggling to do for three months--and walked unassisted to the mike, where she recited a poem about blossoming. Another rolled her oxygen tank to the mike and read "When I Am Old, I Will Wear Purple." Still another told the audience of the amazing sense of accomplishment she felt in simply being able to get dressed every day.

They made us laugh and they made us cry. In between their personal presentations, they had us clapping, stomping, and hollering as they did stretching, muscle building, and dancing routines to glorious music.

In the end, they hugged each other and some cried. They were so proud--and their families were so proud of them--they just glowed. These women, who had felt like worthless burdens for so long, had accomplished a major transition. I felt honored to know them.

--by Dr. Chris Himes