Technology Offers Savings, Fair and Timely Justice
By National Association of Medicaid Directors Executive Director Matt Salo
The question of how to produce savings in Medicaid is almost as old as the program itself. While Medicaid traditionally has sought cost savings via cutting eligibility, benefits or reimbursement rates, state Medicaid directors are recognizing that we cannot continue to cut our way out of this problem. In fact, there is growing awareness that the solutions lie along a different path, that of a broader delivery system and payment reforms.
In this context, Medicaid agencies across the country are examining all their possible levers to affect change, including collaborative efforts with other stakeholders. And other stakeholders in reform likewise must look to Medicaid. Medicaid has become—in many states—an important player and powerful tool in multipayer initiatives that bear the promise of improving not just Medicaid, but also the entirety of the U.S. health care market.
While these changes will take on different aspects depending on the state, the core themes stress moving away from traditional uncoordinated fee-for-service, both as a delivery model and as a payment incentive. The acute, behavioral, pharmaceutical and long-term care needs of the Medicaid population are not, and cannot, be met in the current siloed system where no individual provider or entity is responsible for holistically treating the patient. This is especially true for the seniors and individuals with disabilities that comprise the bulk of the program’s spending. Better integrating or coordinating the care for these populations—hand-in-hand with changes in how we pay for their care—is clearly a huge part of the solution and has the potential to reduce costs, as well as dramatically improve the health care outcomes of our most vulnerable citizens.
The National Association of Medicaid Directors works with states to share best practices and lessons learned in these areas. Here are some examples of these types of efforts.
Payment reform. As an incentive for quality and efficient service delivery or as a disincentive for uncontrolled costs and ineffective care, states are examining a range of payment models that will give a competitive advantage to groups offering better outcomes to Medicaid and its beneficiaries. Some examples include bundling payments for episodes of care or specific diagnoses and reduced payments for undesirable outcomes such as hospital readmissions or early elective induction of labor. These payments can be specific to provider or beneficiary, or based on benchmarks of performance generalized across a population.
Quality oversight. Value-based purchasing is the watchword of modern Medicaid. As such, it is imperative that agencies have the capacity to assess value and track progress in quality improvement. Monitoring performance of providers allows Medicaid to identify problem areas and reward quality. Public release of quality data and analytical tools to support competitive contracting and benchmarking among plans and providers are also a more frequent tool.
System accountability. Managed care and other sub-capitated arrangements such as shared savings are a few of the models designed to promote and enhance coordination and holistic care. Rather than working to improve quality in a particular service type or provider, these arrangements can leverage a broad group of providers in a way that improves outcomes of care generally and creates accountability for individual outcomes.
Targeted care coordination. Medicaid agencies across the country recognize the majority of costs are for a relatively small number of individual program beneficiaries. Medicaid agencies have begun to implement health homes and similar efforts for these populations, including those who are dually eligible for Medicaid and Medicare, those who are seriously mentally ill and other beneficiaries with multiple chronic conditions. Medicaid agencies have found effective care coordination often involves different professionals working together to help a beneficiary navigate a range of health and health-related issues.
Multipayer initiatives. Medicaid is a major player in the health care marketplace, but it is far from the only one. A number of states are working to fit Medicaid into a broader strategy that includes private and other public payers in coherent cross-market value purchasing programs.