Sabatini is named president of new HMO

3 chronic diseases are startup's focus


Nelson J. Sabatini, who retired as state health secretary a year ago, has become president of a startup Medicare HMO for people with chronic diseases.

Called Care Improvement Plus, the HMO will serve Medicare-eligible people with diabetes, congestive heart failure or late-stage renal disease.

The HMO is run by a Baltimore company, XLHealth, that was founded as a diabetes management company called Diabetex in 1998 and eventually began to manage other chronic conditions as well.

XLHealth received a boost early this year when it received $63.75 million in new financing from an investment group headed by Goldman Sachs & Co.

Sabatini served separate stints as health secretary, one when William Donald Schaefer was governor and the other under Gov. Robert L. Ehrlich Jr. In between, he was an executive for the University of Maryland Medical System.

Sabatini said yesterday that his new job would let him practice "what I advocated during the Schaefer administration - focused managed care on that part of the population that was costing the most money."

An HMO for the chronically ill, he said, can assure that care is managed and coordinated. And, by keeping patients healthier, it can avoid or defer more expensive treatments.

Such programs give the HMO flexibility to pay for things that will help the patient stay healthier but are not ordinarily covered by health insurance, he said.

For example, XLHealth ran a pilot Medicare disease management program in Texas that provided diabetics with a foot probe, a high-tech thermometer that can identify "hot spots" that indicate an infection or wound, Sabatini said.

His appointment comes as the role of Medicare HMOs is set to greatly expand, beginning Jan. 1, under changes in the Medicare law passed in 2003. The changes encourage both general HMOs and "special needs" HMOs, such as XLHealth's, aimed at particular types of patients.

The new Medicare venture marks the first time XLHealth will operate as an HMO responsible for all health care for members, not just as a manager of treatments for specific conditions.

Sabatini said the HMO hopes to sign up 3,500 people the first year. The federal government will pay XLHealth a flat fee for each patient - the size of the fee is based on the patient's health history - and the HMO will pay for doctor and hospital care. XLHealth estimates about 100,000 Medicare-eligible people in the Baltimore area have one of its three targeted medical conditions.

When he retired a year ago, Sabatini said he planned to so some consulting and to split his time between Maryland and Hawaii. He said yesterday, "My plan is still to have flexibility to spend as much time as I can with my family in Hawaii. But this is a very exciting program. I said, `I'll help you get it up and running.' "

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