New prescription; Fallon health plan is broadening its products and services for seniors.

Byline: Martin Luttrell

WORCESTER - Carmine G. Conti used to worry about his wife, Virginia, when she was alone in their Gardner home.

She had nearly died a few years ago from health problems related to emphysema, and often needed trips to the emergency room at Heywood Memorial Hospital.

Now, Mr. Conti, who drives a Need-A-Lift van, takes his wife to the Summit ElderCare adult day program in Leominster, along with three or four other senior citizens who live nearby. Mrs. Conti, 64, has made some friends at the facility, which runs social activities and medical programs. In addition to having some daytime activities, Summit ElderCare, a division of Fallon Community Health Plan, has taken over her medical care.

"If she didn't come here, she'd be home alone," said Mr. Conti, taking a break in the facility's library. "Our daughter lives upstairs, but she works. There's a doctor on staff here. Before, if she had a problem, we'd spend the day at the emergency room. When we came here the doctor went through all her meds. She was up to about 10 a day. He worked to reduce them. Who likes to take pills?"

Mrs. Conti is one of thousands of senior citizens who have trouble living at home without a caregiver. Fallon Community Health Plan, along with expanding its traditional line of health maintenance products, is offering Summit ElderCare, a program of all-inclusive care for the elderly designed to keep frail elderly at home. It also brings together under one network senior health services that are often fragmented.

In 2007, which marked the nonprofit's 30th anniversary and the launch of a statewide healthcare reform initiative, Fallon Community Health Plan conducted a study to identify growth options.

The result was a restructuring in which the company adopted what President and Chief Executive Officer Eric H. Schultz calls "dual pathways," with a Health Plan Operations division for its HMO products, and another for Senior Care Services, which includes Summit ElderCare.

Data from the U.S. Census and the Massachusetts Institute for Social and Economic Research show people are living longer and the segment of the population over 65 is growing, Mr. Schultz said. By 2010, 12.8 percent of the U.S. population will be 65 or older, rising to 16.1 percent by 2020. There will be an increasing need for services designed to let senior citizens live in their own homes safely, while providing support for caregivers, he said.

"A key part of this is that it supports caregivers," Mr. Schultz said of the Summit ElderCare program. "There's not much out there for them."

Fallon operates Summit ElderCare adult day programs at facilities on East Mountain Street in Worcester, in Charlton and in its newest facility that opened on Cinema Boulevard in Leominster in September. The program has expanded into a second location in Charlton, and another is under construction on Grafton Street near Route 20 in Worcester that will open later this year, said Richard Burke, division president of Fallon's Senior Care Services.The expansion of senior health care services comes as Fallon continues to push its traditional HMO products beyond the boundaries of Worcester County. With total membership last year of 197,434 - the first increase in eight years - the health care provider picked up thousands of new members in Springfield and along the Interstate 91 corridor in the Pioneer Valley. Fallon is now marketing its Direct Care and Select Care products in Berkshire County and in the New Bedford area.

"What drives the strategy of both divisions is the philosophy that local health care is better for the members and their families," Mr. Schultz said.

Summit ElderCare, which is paid for through Medicare and Medicaid, is available for people at least 55 years old who live in Worcester County, as well as Marlboro and Hudson. Those interested in the program must meet certain Medicare criteria and are reviewed by a Summit ElderCare team.

It is the only program of its kind in the state and offers primary care physicians who specialize in geriatrics, full prescription coverage, 100 percent hospitalization coverage and specialized dementia and geriatric care, Mr. Burke said.

Additionally, it provides adult day health program, medical transportation, family caregiver support and assistance with daily living. The health plan also intends to introduce its own housing into the Summit program, and is looking for a parcel of three to five acres to construct about 80 units of assisted living housing in Worcester, Mr. Burke said.

"No health plan in the country is doing what we are doing," Mr. Schultz said. "It speaks to the need for creative financing and delivery. There's not enough collaboration of the two (financing and services) in managing dollars."

John Brouder, a partner at Boston Benefit Partners, a consultant to companies and municipalities on health care benefits, said the Fallon health plan has a tradition of not standing pat.

"It's out-of-the-box thinking, and that's something Fallon is known for," he said. "They have a really strong reputation, and a reputation for innovation."

Fallon had about 1,000 inquiries for services for the elderly last year, and expects to have about 1,200 this year, Mr. Burke said. Frail elderly who live at home are usually looked after by one of their children or a relative. That can result in stress and loss of work time for the caregiver, he added.

"We bring a lot of care into the home and help them care for the frail elder," he said.

Fallon has 650 employees, a 40 percent increase over 2005, and will add 30 more this year from the new facilities in Charlton and Worcester, Mr. Burke said.

Fallon Community Health Plan is the fourth-largest HMO in the state, behind Blue Cross Blue Shield of Massachusetts, Harvard Pilgrim Health Care and Tufts Health Plan. Mr. Schultz hopes the company's reputation for value and cost-effectiveness will win over new members from other health plans.

"We had a gain in membership in 2007 that came from other health plans," said W. Patrick Hughes, division president of Health Plan Operations. "We expanded our network, and that makes us competitive.''

The Fallon health plan traditionally had a great reputation but a limited network of physicians, Mr. Schultz said. The company now offers a larger network, through its Select Care product - with 17,000 providers - as well as a more cost-effective Direct Care, which has fewer physicians.

Mr. Brouder said tiering of providers is attractive to employers considering health plans.

"Having a smaller and tighter network of doctors was what HMOs thought they were doing 25 years ago," he said. "But Fallon always did that. They expanded and offered new physicians, but they did not give up on the original network.''

The expansion into what Fallon hopes will be greener pastures will not duplicate the errors of a decade ago, Mr. Schultz said. A push east and north in the late 1990s resulted in losses of more than $30 million, and had the company on the ropes. Mr. Schultz said the strategy used in the late 1990s was good, but the execution was poor, with poorly priced provider contracts and other problems.

"We had just $20 million left in reserves," he said of the situation prior to his arrival in September 1999. "We would have gone out of business if we had not turned it around." The company's reserves were estimated at $170 million at the end of last year.While Fallon swims in a pool with some much bigger fish, the company is committed to going it alone, rather than joining forces with one of its larger competitors. He recalled that the first question a reporter asked him in 1999 was if he would negotiate a sale of the company.

"When we turned the company around in 2000, the question was if I was positioning the company for sale," he said. "We are committed. We need competition in Massachusetts. Health care would be more expensive. Competition helps keep prices down."

Mr. Conti said he's glad his wife visited the new Summit ElderCare facility, despite her initial reservations. Others who take his van to the facility enjoy it, though one 93-year-old woman from Hubbardston complained she felt she was being "pushed out of the house" by her children that morning.

"I told her I hope when I'm 93 I'm doing this," he said, motioning to the group listening to music and stretching in a nearby room. "That's what I want to be doing."

Fallon Community Health Plan

Membership (includes all product lines)

2002 188,865

2003 186,195

2004 174,723

2005 170,935

2006 190,237*

2007 197,434

* In 2006 FCHP acquired UltraBenefits and its membership

Premium Revenue

2002 - $611,835,000

2003 $676,621,000

2004 $739,622,000

2005 $772,038,000

2006 $845,723,000

2007 $902,000,000 (estimate)

Source: FCHPs audited financial statements 2002 through 2006; 2007 is estimated based on year-to-date November premiums.

ART: PHOTOS

CUTLINE: (1) Nurse Cindy Illhardt gives coffee to Thomas Veilleux, center, as he chats with Albert Martin, left, and Robert Ruane, right, in the Summit Room at Fallon's Summit ElderCare in Leominster on Thursday. (2) Virginia Turnbull, left, and Lorraine Beauchemin laugh during an exercise routine at Summit ElderCare in Leominster Thursday. (3) From left, Fallon Community Health Care's W. Patrick Hughes, division president of health plan operations and Eric Schultz, president and CEO, listen as Richard Burke, division president of senior care and living services, talks about Fallon's health care offerings for senior citizens during an interview. (4) Carmine G. Conti of Gardner talks about the advantages of Summit ElderCare, where his wife spends a few days each week.

PHOTOG: (1, 2, 4) T&G Staff/RICK CINCLAIR (3) T&G Staff/PAUL KAPTEYN