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JOHN DEERE'S HMO SAVES STATE OF IOWA $3.5 MILLION

 DES MOINES, Iowa, Aug. 23 /PRNewswire/ -- Heritage National Healthplan, Inc., a subsidiary of John Deere Health Care, Inc., today announced that it generated a savings of over $3.5 million for the state of Iowa through the effective administration of Scott County's Medicaid program.
 Heritage President G. Michael Hammes presented a final statement of reconciliation to Gov. Terry Branstad in a ceremony in Des Moines this morning. Hammes noted that the $3.5 million represents a savings from the total amount the state paid Heritage using the state's standard Medicaid reimbursement formula.
 Hammes explained that the State's reimbursement formula generated a payment amount that eventually exceeded the actual total required for Heritage to provide necessary medical services to the Medicaid population covered by Heritage in Scott County. The $3.5 million in savings were generated during the period from July 1, 1992, through June 30, 1993.
 "Our ability to generate this savings is due to the cost management efforts of the Scott County medical community working with Heritage in keeping costs far less than the anticipated medical inflation for the overall Medicaid population," Hammes said.
 Gov. Branstad, in responding to the final figure provided by Heritage, said that this shows that public/private partnerships work well now, and will work well in the future for health care reform and cost management.
 "The Heritage program, working in conjunction with the Iowa Department of Human Services and with the medical community in Scott County, represents a true partnership between government, industry and the private medical community to improve health care quality and manage costs," Gov. Branstad said. "An extremely good working relationship has developed between the state and Heritage that enables us to efficiently administer this program. The ultimate result is that the consumer receives quality health care, and the taxpayer receives a good value for the dollar."
 Hans W. Becherer, chairman and chief executive officer of Deere & Company (NYSE: DE), said, "The obvious success of this program confirms that effective public/private partnerships of this type can help manage health care costs for the rest of the Medicaid population, both in Iowa and across the country. The state of Iowa should be commended for this initiative, which is one of several pioneering efforts across the country for the development of Medicaid contractual arrangements between managed-care organizations and state departments of public aid."
 Heritage is a Health Maintenance Organization (HMO) that combines the physician and hospital resources of the Scott County medical community in a structured arrangement designed to improve quality and manage costs. Hammes noted Heritage's belief that the provider community prefers to work with a local health plan as opposed to a third-party intermediary.
 Heritage has been providing administration of Iowa's Medicaid program in Scott County since Dec. 1, 1986. The initial contract with the Iowa Department of Human Services covered only Scott County but was recently expanded to include Black Hawk County. Beginning with approximately 500 enrollees, the Scott County program has increased to approximately 9,500 of the County's 12,000 Medicaid recipients; the Black Hawk County program began on Jan. 1, 1993, and now has approximately 3,500 enrollees of the county's 9,000 Medicaid recipients.
 Heritage National Healthplan, Inc., is a subsidiary of John Deere Health Care, Inc., which provides managed health care and administrative services to over 230,000 healthplan enrollees located in Illinois, Iowa, Wisconsin, and Tennessee. John Deere Health Care, Inc., a subsidiary of Deere & Company, is a health management services company.
 -0- 8/23/93
 /CONTACT: Robert J. Combs of Deere & Company, 309-765-5014, or Dick Vohso of the Governor's Office, 515-281-3150/
 (DE)


CO: John Deere Health Care, Inc. ST: Iowa, Illinois IN: HEA SU:

TS -- NY026 -- 4989 08/23/93 10:57 EDT
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Publication:PR Newswire
Date:Aug 23, 1993
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