Better Care, Lower Costs

John Erickson's goal has always been to create a nurturing, caring, comprehensive retirement community. That was his dream when he opened his first Erickson Retirement Community in the Baltimore area in 1983, and that was the reason his company partnered with EverCare/UnitedHealthcare to create Erickson Advantage Health Plan.

Erickson Advantage is a Medicare waiver demonstration project and a first-of-its-kind health plan. The interdisciplinary, geriatric health plan is available to more than 20,000 residents at the 19 Erickson Retirement Communities that spread from the East Coast to Denver.

Erickson Advantage has grown from 32 members at its launch in October 2005 to more than 2,000 by July 2007-and the company hopes to reach 2,500 members by the end of the year. Erickson, founder, chairman and chief executive officer of Erickson Retirement Communities, says the health plan is an extension of his company's goals of providing residents with a complete retirement-while also controlling healthcare costs. "Erickson Advantage is a way to improve the healthcare our seniors get," says Erickson.

Melding together two varied companies-a private management company and a large, publicly traded insurer-has been a more natural fit than one might expect. In fact, Erickson officials say the different cultures work collaboratively to form a creative environment.

"I think that has also been one of our initial successes," says Bruce Sturm, senior vice president of EAHP, who negotiated the strategic partnership and led the team through the startup. "It brings about a creative environment where you recognize the different ways and you learn from each other."

Though only two years into the project, EAHP officials are already seeing results. Pointing to one community in particular, the company's Riderwood campus in Silver Spring, MD, Erickson says the number of hospital days per 1,000 residents is less than half of traditional Medicare numbers. Erickson says those numbers are particularly impressive given that EAHP's members are older than the typical Medicare beneficiary.

Sturm links the short stays primarily to the program's hands-on management approach for admissions and care coordination, improved communication via electronic medical records, and EAHP's unique ability to return members to an independent living environment where they have support services that are not available under traditional Medicare.

Replicating the EAHP model throughout the country could mean significant Medicare savings, says Sturm. "Think about the implication of that on a broader scale," says Sturm.

Erickson is hopeful the federal government will see the benefits of the demonstration project and make it and EAHP a permanent part of the Medicare program.

"We want to help the Medicare program recognize better ways to provide better care," says Sturm. "Being pioneers and solving challenges every day has proven to be a great environment to work in."

-Les Masterson