Combined services that care for seniors provide big-picture savings

October 1, 2004

Months before my grandmother moved into a nursing home, she called me over to her house to help in the kitchen.

Months before my grandmother moved into a nursing home, she called me over to her house to help in the kitchen. It was late in the holiday season, and she wanted to make a few batches of her favorite chunky, marshmallow chocolates to give as gifts.

When I arrived, she laboriously made her way into the kitchen, coaching herself as she went. "Come on now, Edna, pick up your feet," she said, laughing.

Resting at last in a kitchen chair, she gave me specific instruction so the chocolates would be made in her own special way. She told me in detail how much chocolate to melt, how to add the nuts and marshmallows, and how to set the melted mix into heavy, lumpy slabs.

Caring for seniors Thousands of seniors living in their homes struggle to complete everyday tasks, such as cooking, cleaning and refilling their prescriptions. Many of them don't need round-the-clock medical care, just some functional assistance to maintain their quality of life.

Although an assisted-living or nursing-home arrangement is an alternative, the expense can deter seniors just as much as the thought of leaving the familiar homes they've lived in for decades. Many who do make the transition eventually end up relying on Medicaid. Most of us have seen it happen in our own families.

Dave Schmidt, CEO of SCAN Health Plan, based in Long Beach, Calif., lives at the heart of seniors' dilemma. He heads this hybrid HMO that combines Medicare-covered services and community-based, independent living services, such as transportation to doctors' appointments, home-delivered meals and caregiver respite (see Executive Profile).

Founded by 12 frustrated seniors in 1977, the Senior Care Action Network morphed into a pilot-project social HMO, which by definition provides a medical benefit and community services for the purpose of delaying costly nursing-home placement for the frail elderly, thus saving Medicaid dollars.

"We're one of only two social HMOs that focus on geriatric people," Schmidt told me during our conversation in his office recently. "It's hard to think of $700 million as a small business, but it is unique. We're very focused on this segment of the population."

He says providing access to the added services that help seniors stay independent at home isn't just a nice extra-it makes financial sense, too. In the big picture, providing meals for a senior who really needs that assistance costs much less than the $140 a day it would cost to put the same senior in a nursing home, he says.

Watching the SCAN promotional video, I noticed a common theme among the members interviewed: Just about every one mentioned the meal delivery. "SCAN brought nutritious meals to my home," they said. "And they even brought dessert!" Clearly, the members want to see the benefit continue.

Schmidt's personal mission is to maintain the plan and its independent-living services, "so that SCAN is here for me when I become eligible," he says. "There's more than a little truth in that. I have a genetic predisposition to live a long time, so I feel a strong need for this plan to be here."