Last week, Associate Editor Heather Landi reported on an important panel discussion that had taken place on November 29 at a conference at the Sloan School of Management at MIT (the Massachusetts Institute of Technology). The Sloan School’s Initiative for Health Systems Innovation (HSI) had sponsored the “Innovating Health Systems: Digital Health Transformations” conference at its Cambridge, Mass.-based campus, with a focus on how state government leaders are rethinking healthcare delivery to their covered populations, and the potential for digital innovations to transform care delivery.
As Landi reported last week, “During that panel discussion, three senior leaders representing state Medicaid programs for New York, California and Massachusetts provided overviews of their states’ progress to transition from fee-for-service to value-based payment models to transform population health, as well as the challenges that still exist in their work to reform healthcare payment and healthcare delivery.” The three state leaders—Michael Wilkening, undersecretary of the California Health and Human Services Agency; Jason Helgerson, Medicaid director at the State of New York Department of Health; and Daniel Tsai, assistant secretary, MassHealth, and the Medicaid director for the commonwealth of Massachusetts—are all working along slightly different lines in their innovations; and yet the overall context of their work is one filled with commonalities, in terms of the straitened budgets of state governments, the need to cover large (and usually, growing) populations with chronic illnesses, and the need to achieve patient/plan member engagement.
And what all three states are doing is important. Helgerson noted that said that New York state is about halfway into its five-year initiative to restructure the healthcare delivery system through its Delivery System Reform Incentive Payment (DSRIP) Program, which received $6.42 billion in funding. New York’s Medicaid program serves 6.6 million people with an annual budget of $68 billion, the second largest program in the country; and, Helgerson reported to the audience at the Sloan School, “We’ve seen some positive results as far as reductions in avoidable hospital use in the ER and admissions and readmissions, but there is still quite a bit of work to get this large and complex sector of our economy to work together in a collaborative way.”
Helgerson noted that “The challenge with healthcare is it’s the least customer-friendly sector in our economy. Much of the onus is on the patient to go and get care, regardless of how complex sick or disabled they may be, and the services are offered at the convenience of the provider, not at the convenience of patients or members. At the end of day,” he said, “if we’re going to be successful in making this thing we call healthcare affordable, effective and meeting the needs of an aging population, we have to make it more responsive and centered around the individual than it is around the provider.”
Meanwhile, in Massachusetts, Tsai is helping to lead an initiative to help convert MassHealth’s provider contracts to at-risk ones. As of March 1, 80 percent of lives in that state’s Medicaid program will be in fully capitated models with 17 accountable care organizations (ACOs) across the state. And Wilkening detailed the California Health and Human Services Agency’s work to transition more of the 14 million MediCal (the name for Medicaid in California) beneficiaries, who represent one-third of the state’s population, into a managed care environment, leveraging a federal waiver that has allowed that state to implement a “Whole Person Care” pilot program that helps to drive incentive payments toward designated public hospitals to focus on better coordinating care management to improve the health and wellbeing of high-risk individuals, avoiding duplication of services and reducing inappropriate utilization of hospital emergency rooms and inpatient services—a program that Landi had covered in greater depth in an earlier report.
What strikes me about all of these initiatives is two things, which initially feel paradoxical: their inevitability, and their difficulty. Let’s talk about the difficulty first: while it’s one thing to say that we need to shift Medicaid programs into managed care models, the very nature of the populations involved, and the history of the various state Medicaid programs, both work against any quick shift. As Helgerson noted, Medicaid programs have tended to be bureaucratic and very poorly (if at all) integrated; meanwhile, they are managing care delivery for populations whose transcience and social instability pose inherent challenges.
And if New York, Massachusetts, and California, three states known for progressive approaches to the management and direction of social-service programs, are struggling, it’s not surprising that states like North Carolina have only begun even to plan for a shift to Medicaid managed care. This work is hard and it’s very complex, with many moving parts.