As Joshua M. Liao, M.D., Benjamin D. Sommers, M.D., Ph.D., and Amol S. Navathe, M.D., Ph.D., note in their important “Perspective” piece in the July 12 issue of The New England Journal of Medicine, “The Centers for Medicare and Medicaid Services (CMS) has led the national effort to shift the U.S. healthcare system toward a focus on value. Prominent Medicare value-based payment models such as accountable care organizations (ACOs) and bundled payments are influencing the ways in which clinicians deliver care, and participation in both types of programs has accelerated since the passage of the Medicare Access and CHIP Reauthorization Act of 2015.” Meanwhile, the authors note, “Although such efforts have been less publicized, CMS and individual states have also started transforming reimbursement and care for Medicaid beneficiaries, in part by following Medicare’s lead and implementing analogous payment programs. Early evidence suggests that both ACOs and bundled payments may reduce spending while maintaining or improving quality of care among Medicaid populations. However, sustained success may be harder to achieve in Medicaid than in Medicare for several reasons.”
And therein lies the complexity. On the one hand, as the medical researchers note, “[M]anaged care is far more prevalent in Medicaid than in Medicare; 68 percent of all Medicaid beneficiaries nationwide and at least 80 percent of beneficiaries in 16 are enrolled in managed care.” On the other hand, as the authors point out, “[S]tate programs and clinicians who manage care for socioeconomically vulnerable Medicaid patients with high-cost conditions may encounter substantial challenges, among them, limited program budgets, the high prevalence of hepatitis C among beneficiaries, and the widespread co-occurrence of severe mental illness and substance abuse disorders.
Meanwhile, even the cost control incentives already operative in many Medicaid programs can inhibit overall care management-based cost-control success, the authors note, as “[S]ome safety-net physicians may have little hope of meeting global cost-containment targets, despite successfully managing other aspects of primary and acute care.” What’s more, the well-known problem of beneficiary “churn” also bedevils efforts at care management-based cost-control efforts.
What to do? “To address these challenges,” Liao et al say that “we think that success could be achieved if Medicaid diverged from Medicare in three important ways: Medicaid programs could emphasize nonfinancial incentives in ACOs; enhance coordination among ACOs and bundled payment programs to improve management of high-cost, chronic conditions in ambulatory settings; and more fully account for and mitigate (when possible) socioeconomic and clinical risk factors, including coverage churning.”
Among the bright spots in this landscape: “CMS is also testing a chronic hepatitis C bundle in New York that could provide an example for coverage of other high-cost conditions”; and there is the potential to implement “new approaches for capturing and addressing important components of beneficiary risk, including socioeconomic factors.” Indeed, the authors write, “Without these efforts Medicaid ACOs may not have meaningful effects, particularly when high-risk populations such as those who have dual eligibility are included and certain measures that are left out of existing evaluations, such as those for behavioral health services are considered.”
With regard to the chronic hepatitis C bundle being tested in New York, the authors write that “The bundle encourages clinicians to focus on care coordination, referrals, counseling, and treatment monitoring for Medicare beneficiaries and approximately 350,000 dual-eligible beneficiaries with hepatitis C. it is designed to ease the tension between the long-term benefits of treatment and short-term budgetary challenges by tying bonus payments and penalties to projected future benefits associated with curing the disease. It also mitigates underprovision of care and encourages providers to take on high-need patients by providing payments at the level of the facility rather than the physician, and tiering savings on the basis of patient age and risk level”—all issues that have posed problems to ostensibly value-driven initiatives in the recent past.
There is so much here to reflect on. First of all, impressive innovations are taking place in Medicaid health plans and programs across the U.S. And the senior executives and other leaders in those health plans are stretching available dollars as far as they possibly can, while trying to improve the health status and care management quality of the care being provided to some of the most at-risk members of our society.
What’s more, information technology, particularly data analytics, is playing a very major role in all the breakthroughs taking place, particularly in helping Medicaid program and Medicaid health plan leaders to risk-stratify the populations they are caring for, and to identify early on those Medicaid plan members/enrollees at greatest risk.
One challenge that will continue to dog the steps of the pioneers in these areas is the ongoing fragmentation of healthcare in this country, particularly the gaps between physical and behavioral healthcare. That is an area of concern that will not easily be mastered; but once again, the leveraging of information technology could be very helpful in that regard.
In the meantime, I salute Drs. Liao, Sommers, and Navathe for having identified so clearly and precisely some of the main challenges facing those who would help Medicaid-funded and Medicaid-managed healthcare transition to value over time. The challenges are many, but innovators are beginning to learn some of the most basic lessons about what works and what doesn’t, and how they’ll need to move forward towards success, along a number of dimensions.
As the authors concludes, “as CMS explores ways to improve value in healthcare spending, Medicaid is a natural target. But it will require careful thought and design to protect care for some of the country’s most vulnerable patients while also creating the right incentives for payers and providers.”