Quality Improvement in Medicaid: Opportunities for StatesNational Conference of State Legislatures: Health Policy PreconferenceDecember 10, 2008
Melanie BellaSenior Vice PresidentCenter for Health Care Strategies
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CHCS Mission
To improve health care quality for low-income children and adults, people with chronic illnesses and disabilities, frail elders, and racially and ethnically diverse populations experiencing disparities in care.
►Our PrioritiesAdvancing Health Care Quality and Cost EffectivenessReducing Racial and Ethnic DisparitiesIntegrating Care for People with Complex and Special Needs
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Medicaid’s Challenges and Opportunities63 Million Number of people covered by Medicaid
$361 Billion Annual cost of Medicaid — the dominant health care purchaser in the United States
1 Million Number of additional Medicaid/SCHIP beneficiaries resulting froma 1% increase in unemployment
41% Percentage of births covered by Medicaid
28% Percentage of children covered by Medicaid
41% Percentage of total long-term care costs financed by Medicaid
27% Percentage of total mental health costs financed by Medicaid
22% Average percentage of entire state budget spent on Medicaid; ranges from 8% in Wyoming to 31% in Pennsylvania and Maine
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Five Steps for Reducing Medicaid $$Five Steps for Reducing Medicaid $$Focus Examples
Step 5 Quality •Chronic disease management•Outcome based pay for performance
HIGH
Leve
l of
Diff
icul
ty
Step 4 $$-Driven Desperate Measures
•TBD as states determine that cuts alone will not slow the rate of growth
Step 3 Eligibility •Capping enrollment / eliminating optional groups
Step 2 Services •Eliminating optional services
Step 1 Reimbursement •Across the board provider rate cuts
LOW
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Medicaid Medicaid ““Best BuysBest Buys””
Targeting Medicaid investments to get the best value for every dollar spent in terms of improved outcomes and ROI
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FiveFive--Part Strategy for Medicaid ReformPart Strategy for Medicaid Reform
1. Care Management for High-Risk Pregnancy2. Care Management for High-Risk Asthma3. Managed Care Models for Aged, Blind and
Disabled Beneficiaries4. Managed Care Models for Long-Term Care
Supports and Services5. Care Management for High-Risk, High-Cost
Members with Multiple Chronic Conditions
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Care Management for High-Risk Pregnancy
EXAMPLE: Through a high-risk prenatal program, Monroe Health Plan (NY) estimates saving $2.3 million in avoided NICU admissions
since 1998 – equaling an ROI of more than two dollars for every dollar spent on prenatal outreach.
NICU Admissions/1,000 Births
107.6 98.2 93.7 87.7 89.356.6
34.956
0
50
100
150
1998 1999 2000 2001 2002 2003 2004 2005
Analysis of NY State SPARCS Data demonstrated no concurrent changes in NICU admission rates in upstate New York for Medicaid during these years.
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Care Management for High-Risk Asthma
• EXAMPLE: Arkansas reduced hospital days by more than 50%, ER visit rates by over 60%, and total medical payments by 35% over a
two-year period through an asthma care management program targeted at high-risk, high-cost cases. These savings represented an
ROI of more than $6 for each dollar invested in the program
Inpatient Days/1,000 Children with Asthma
1584.8
786.4 724.9
0200400600800
10001200140016001800
Baseline Year 1 Year 2
ER Visits / Children with Asthma
1.52
4.1
00.5
11.5
22.5
33.5
44.5
Baseline Year 1 Year 2
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Per Capita MedicaidPer Capita Medicaid SpendingSpendingTo
tal Per Cap
ita Co
sts
Percent of Medicaid Population
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EXAMPLE: The Washington Medicaid Integration Partnership achieved a decrease in inpatient admissions and days in state mental hospital facilities compared to fee-for-service beneficiaries.
Managed Care Models for Aged, Blind and Disabled Beneficiaries
States are testing new delivery system models to:
• Transition aged, blind, disabled beneficiaries out of fee-for-service
• Integrate physical and behavioral health care services. health
• Offer a range of full-risk, partial/no-risk and hybrid models
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Dual Eligibles: Opportunities to Improve Care/Control Costs
Roughly 7.5 million adults are dually eligible for Medicaid and Medicare services. These individuals equal 14% of Medicaid beneficiaries, yet drive almost 44% of total spending.
Group Unknown
$11.6 billion3.8%
Other Aged and Disabled$ 79.2 billion
26.1%
Dual Eligibles$133.3 billion
43.9%
Adults$32.0 billion
10.5%
Children$47.5 billion
15.6%
Medicaid Spending by Group, Services Only, FFY 2005
Total Spending = $ 303.6 billionSOURCE: Urban Institute Analysis for KCMU, May 2008
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Managed Care Models for Long-Term Care Supports and Services
States are testing new models to:
• Integrate care for dual eligibles• Contract with Medicare Advantage Special Needs
Plans (SNPs)• Test non-SNP alternatives• Pursue gainsharing opportunities, i.e., share savings
with Medicare
EXAMPLE: Florida, Minnesota, New Mexico, New York, and Washington are among a handful of states that are testing fully integrated models for dual eligible beneficiaries.
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Chronic Illness & Medicaid’s Highest-Risk, Highest-Cost Patients
• High Need: Most on Medicaid have a chronic condition; nearly half of them (46%) have more than 1
• High Cost: Top 4% beneficiaries = 50% of spending
– Among the most expensive 1% of Medicaid beneficiaries (acute care only):
• Almost 83% have 3 or more chronic conditions• Over 60% have 5 or more chronic conditions
SOURCE: 2001 data, Kaiser Commission on Medicaid and the Uninsured; Kronick RG, Bella M, Gilmer TP, Somers SA, “The Faces of Medicaid II: Recognizing the Care Needs of People with Multiple Chronic Conditions.” Center for Health Care Strategies, Inc., October 2007 13
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Care Management for High-Risk, High-Cost Members with Multiple Chronic Conditions
States are testing new programs to:
• Identify and stratify high-opportunity beneficiaries• Develop and implement tailored care management
interventions• Establish appropriate performance and outcome
measures• Structure financing to support care management• Include rigorous evaluations
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EXAMPLES: Medicaid “Learning Laboratories”
• New York Medicaid– 21% of beneficiaries incur 75% of costs– High-cost beneficiaries generally fall within six categories: chronically ill,
HIV/AIDS, long-term care, alcohol/drug users, chronically mentally ill and MR/DD
– New York Chronic Illness Demonstration Projects• Using an integrated network of providers, including community-based
social service providers, to assure facilitated access to medical, mental health and substance abuse services
• Colorado Medicaid– 22% of beneficiaries incur 66% of costs; of these, 20% incur 77% of costs – 41% have multiple chronic conditions
– Colorado Regional Integrated Care Collaborative• Providing a multi-faceted care management approach at the plan,
practice, and patient levels
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