Sutter Health and Alignment Healthcare Team Up in Northern California for Medicare Beneficiaries

SACRAMENTO, California, May 14 -- Sutter Health issued the following news:

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- Not-for-profit health system and Medicare Advantage insurance provider seek to expand access to care and coverage, pending regulatory approval

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Today, Sutter Health, a not-for-profit integrated healthcare system, and Alignment Healthcare, a Medicare Advantage insurance provider, announced the signing of an agreement that allows the two organizations to work together to offer more healthcare and insurance coverage options for Medicare-eligible residents in Northern California in 2020, pending regulatory approval.

Alignment has filed an application with the Centers for Medicare & Medicaid Services (CMS) to expand its Northern California service area. If the application is approved, Alignment and Sutter would begin offering new Medicare Advantage plans in the approved counties in October 2019 and members could seek "in-network" care with Sutter-affiliated and aligned physicians and facilities on Jan. 1, 2020.

"Sutter has a long history of launching new and innovative healthcare solutions for the benefit of patients and our communities," said Phil Jackson, Sutter's CEO of Health Plan Products. "This collaboration is designed to introduce new Medicare Advantage plans for eligible individuals and to help them shop for plans, find affordable coverage, and gain access to high-quality healthcare."

Medicare Advantage plans are offered by private health insurance companies approved by CMS and must cover everything included in traditional Medicare -- hospital costs, doctors' visits and outpatient care. These plans often include extra benefits like prescription drug coverage, vision, dental and hearing exams. Every year, Medicare enrollees can review their health plan options in October and make changes to coverage beginning the following January.

Managed care delivery models such as Medicare Advantage make it easier for healthcare providers to coordinate care and practice preventive medicine, avoiding emergency room visits and more costly treatment plans. According to a study by the Boston Consulting Group (1)/, Medicare Advantage patients pay less in out-of-pocket costs than patients in traditional Medicare and, on average:

* Are twice as likely to receive preventive care

* Are half as likely to go to the emergency room

* Go home from the hospital one day earlier

* Are less likely to be readmitted to the hospital after discharge, and

* Use fewer healthcare services, allowing providers to care for others in need

The Congressional Budget Office estimates that approximately 40 percent of all Medicare beneficiaries will be enrolled in Medicare Advantage plans by 2020.(2)/ Of the approximately 2 million Medicare-eligible residents in Northern California, an estimated 850,000 are currently enrolled in Medicare Advantage plans, according to CMS.

"The collaboration between Sutter Health and Alignment Healthcare is centered on our customers," said Dawn Maroney, Alignment's consumer president. "We are coming together to offer Medicare-eligible individuals in Northern California more choice, designing health plan products that will provide access and flexibility for specific population age groups in most of Sutter's existing service areas in Northern California."

Founded in 2013, Alignment Healthcare has created a model of healthcare delivery that combines high-touch care coordination with AVA(R), its proprietary command center technology, to improve quality of care and eliminate waste in the care system. The central nervous system of Alignment Healthcare, AVA provides real-time reporting and predictive analytics that allow care specialists to anticipate care, often before it's even needed. Now serving more than 60,000 members across three states, the Orange, Calif.-based company is supported by industry-leading investors and endorsed by influential parties including former CMS administrators and best-in-class hospital systems and health plans.

"Alignment is thrilled about this relationship with Sutter Health," said John Kao, Alignment Healthcare founder and CEO. "By working together, we have the opportunity to offer more communities more access to care and implement population health strategies that improve care and lead to better health."

Footnotes:

(1) https://www.bcg.com/publications/2013/health-care-payers-providers-alternative-payer-models.aspx

(2) https://www.cbo.gov/sites/default/files/cbofiles/attachments/44205-2015-03-Medicare.pdf