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Study details fall in ER use in Oregon


Because of Oregon’s expansion of  Medicaid,  the rate of visits to emergency departments  as well as hospital readmissions have dropped despite  a more than 50 percent increase in the number of people using the program, according to a new analysis by the state.

Key findings of the report include:

  • 83.8 percent of Medicaid beneficiaries were able to receive appointments and care when they needed it, up slightly from 83 percent in 2014.
  • 43.1 enrollees visited an emergency department per 1,000 member months, compared with 47.3 in 2014.
  • 8.6 percent of adult Medicaid beneficiaries were readmitted to a hospital within 30 days of discharge, down from 11.4 percent.

The drop in ER use is especially surprising. In 2008, the state used a lottery to expand its Medicaid program for low-income adults and studies  showed an uptick in ER use.


To read the state report, please hit this link.

Ala. handing Medicaid managed care to nonprofits


For Kaiser Health News

Despite having one of the strictest eligibility requirements in the country, Alabama has struggled to control the rising costs of Medicaid, which provides health coverage to more than 1 million residents.

Alabama Gov. Robert Bentley, M.D., a popular two-term Republican governor, and a dermatologist, is offering an unusual cure.

The state last week won federal approval to shift most of its Medicaid recipients into managed-care organizations, which are paid a fixed monthly fee from the state for each person in the plan. It’s a strategy employed by about three dozen states, many for decades, to provide more predictable spending.

Yet, Alabama’s shift to Medicaid managed care has features not typically seen elsewhere. Most notably, the state isn’t relying on big for-profit insurance companies like UnitedHealthcare and Aetna to manage the program. Instead, it’s turning control over to new nonprofit organizations mostly run by the state’s hospitals and other local providers. Oregon has also pulled in healthcare providers to help run its Medicaid program, but that approach, begun in 2012, also included private insurance plans.

Hospital leaders applaud the move, saying they know their communities’ needs and are best positioned to care for the patients. And they hope it’s a step that leads the governor and legislature to expand Medicaid under the Affordable Care Act, which would make an additional 300,000 people eligible. Bentley has said he would not consider expanding Medicaid until his proposed reforms of the program go into effect.

Alabama is one of 19 states, mostly in the South, that have refused to accept the health law’s provision to extend Medicaid to everyone earning less than 138 percent of the federal poverty level, or $16,400 for an individual. The federal government pays the full cost of the expansion through this year and then gradually reduces its share to 90 percent in 2020. Alabama’s Medicaid program is mostly used by children and disabled residents. Parents are only eligible if their income is under 18 percent of the poverty level, or about, $4,000 a year for a family of four.

Courtesy of Huntsville Hospital Health System

Huntsville Hospital Health System is tentatively planning to run two of the new regional care organizations in the northern and western parts of Alabama.

— Photo courtesy of Huntsville Hospital Health System

The state and the federal government split the costs of the program, with the federal share nearly 70 percent in Alabama.

The Obama administration’s decision to approve Alabama’s managed-care system will bring the state an additional $328 million in federal funding over three years — money that will help set up the new entities the state calls Regional Care Organizations. Most of the funding will be used to build information-technology and computer systems to help the hospitals work as insurers. Under the waiver, Alabama could also qualify for an additional $420 million in federal money over a five-year period to further support the transformation.

Without the waiver, Alabama hospitals feared the state would have cut Medicaid benefits and reimbursements to the hospitals. Alabama’s total Medicaid spending has increased from $5.2 billion to $5.8 billion in the past four years as enrollment rose more than 15 percent.

Hospitals say the money they will receive through managing the regional care collaborations will give them incentives to keep people healthy. That’s quite different from the traditional fee-for-service Medicaid system in which hospitals get paid more money by providing the most expensive health services.

The effort will allow hospitals to change their mission from treating disease to improving the health of the population — and share in the savings, said Frederick Isasi, director of the health division of the National Governors Association, which worked with the state on the waiver. “Alabama is creating a more efficient system,” he said.

The Regional Care Organizations, or RCOs, will be rewarded for keeping spending on budget and they will have their care rated by a doctor-controlled state board that will look at dozens of quality and customer service measures. The RCOs will work to help people with chronic diseases such as diabetes and asthma so they can avoid costly hospital stays.

Hospitals say they are happy they won’t have for-profit managed care companies dictating their Medicaid reimbursement and can have more control over how the program’s dollars are spent.

“Anyone who realizes where health care is going in the country knows you want to be high up on the hierarchy where the premium dollars are being paid,” said Burr Ingram, spokesman for Huntsville Hospital Health System, which is tentatively planning to run two of the RCOs in the northern and western parts of the state.

Some health insurers will still provide a supporting role for the program, such as providing back office support or helping hospitals meet their financial requirements.

Insurers say the state is wasting money having hospitals and other providers learn how to operate as managed care companies when insurers have been doing that elsewhere for years.

“The state bought half a loaf,” said Jeff Myers, CEO of the Medicaid Health Plans of America, a trade group of large insurers. He applauds Alabama for moving to managed care, but he said it could have saved money using experienced insurers that know how to build provider networks, pay claims and manage risk.

The state has tentatively contracted with at least two regional care organizations in each of five regions of the state. Each RCO will set up its own provider networks, which Medicaid recipients must use to get the cost of their care covered. The program expects to enroll 650,000 Medicaid patients. Nursing home patients are excluded.

“We see this as a huge milestone,” Danne Howard, executive vice president for the Alabama Hospital Association, said of the federal waiver approval. “We hope this will pave the way for more serious discussion of expansion.”

While the managed care strategy is a victory for hospitals, the Medicaid expansion would have helped them even more by reducing their uncompensated care. “Having a bigger pie would be better to carve up,” said Meredith Kilgore, chair of the healthcare organization and policy department at the University of Alabama at Birmingham. “But that would be seen as caving into Obamacare.”

How N.C. is trying to reshape Medicaid

By MICHAEL TOMSIC of WFAE via Kaiser Health News

North Carolina is overhauling its Medicaid program. The governor and state lawmakers are using a mixture of healthcare models to put the major players — doctors, hospitals and insurers — all on the hook to keep rising costs in check.

For many of the Republicans who control the state legislature, the reason for the change is simple: budget predictability.

“For years and years and years, Medicaid has been considered the budget Pac-Man that eats up all the dollars that people in this chamber would like to see spent on many, many other things,” Rep. Bert Jones said during the North Carolina House’s debate of the bill last month. Gov. Pat McCrory signed the overhaul into law on Sept. 23.

The state, which has not expanded Medicaid under the health law, struggled with huge Medicaid cost overruns from 2010 through 2013. That sent lawmakers looking for a better way to manage it, even though a signature part of the program has won national awards for quality and cost.

The lawmakers settled into two camps: One camp wanted to use a managed-care model, which basically means paying large insurance companies a specific amount per person covered and relying on the companies to contain costs.

“The alternative idea was to contract with what are called accountable care organizations,” said Wake Forest Prof. Mark Hall, “which is a newly emerging idea both at the state level and the federal level to organize systems of healthcare finance and delivery that are led by doctors and hospitals.”

The federal government is pushing that model for Medicare, the government insurance program for the elderly. The idea is to put the doctors and hospitals in charge of the health of a certain population of people. If they can provide care that keeps people healthy and saves money, doctors and hospitals can share some of that savings.

Some state lawmakers worried that the doctor-and-hospital model wouldn’t save enough money. Others worried the insurance company model would skimp on care. So they settled on a mixture of both.

Will that create “a Frankenstein’s monster?” That’s the question Hall, the Wake Forest professor, asked earlier this year.

“We proposed the thought that hybridizing these two separate ideas might be freakish, but in fact, I don’t think it is,” he said. “I think it’s actually a very sound and carefully thought-out use of the best of both models.”

Outside of North Carolina, Oregon is also contracting with both MCOs and ACOs, and a few other states are exploring how to encourage provider organizations to play a bigger role in Medicaid managed care.

In the meantime, North Carolina is drawing from the managed-care/insurance company model to change how it pays for Medicaid.

As of now, doctors bill Medicaid after they provide services, so the incentive is to provide more services. In the new system, the state will set budgets up front for whomever it puts in charge of managing care. If those managers go over budget, they’re on the hook – not the state.

That’s becoming the standard approach to payment, says Dan Mendelson, CEO of consulting firm Avalere Health.

“Most states contract for Medicaid through managed care because states don’t want open-ended financial liability,” Mendelson said.

Normally, those states contract with insurance companies. But here’s where the doctor-and-hospital model comes in. North Carolina will open up its bids to insurance companies and doctor-and-hospital systems. It will also set up quality metrics to track how they do.

Game on, says Julie Henry of the North Carolina Hospital Association.

“We’re moving in this direction in other arenas in healthcare, not just for the Medicaid population, but for commercially insured patients and for Medicare patients,” she said.

Henry points out some doctor-and-hospital systems in North Carolina are already meeting quality metric standards and saving money under Medicare. Some insurance companies are posting similar results.

Patient advocates say one system isn’t necessarily better than the other.

“We think it’s important to focus on not just who we hand a big bucket of money to, but what are the rules for spending that money,” said Corye Dunn, of Disability Rights North Carolina.

She says making sure the quality metrics are effective will be a crucial part of the overhaul process.

Also, lawmakers set a cap of 12 percent for how much money can go toward administrative costs and profits.

“The challenge lies in the fact that Medicaid is already a very lean program, and there’s just not a lot of fat to cut out there,” said Joan Alker of the Georgetown University Center for Children and Families. “The concern is, will the managed care company save money the right way or the wrong way?”

Some worry the risks of the overhaul outweigh the benefits. Cost overruns have not been a problem the past two years. And many in North Carolina’s medical community take pride in effective parts of the old program.

A Republican legislative leader on healthcare policy, Rep. Nelson Dollar, voted against the overhaul. And Democratic Rep. Gale Adcock, a nurse practitioner from Wake County, told other lawmakers to consider a guiding principle in healthcare.

“First, do no harm,” she said on the House floor. “I’m very fearful that if we pass this bill, we will do harm.”

The version that passed will change the award-winning part of the program, called Community Care of North Carolina. Community Care is a network of doctors, nurses and pharmacists who coordinate care for roughly 80 percent of Medicaid patients. A recent state audit found that Community Care has been saving the state money and improving patient outcomes.

As insurers and hospital systems take over those functions, Community Care President Dr. Allen Dobson says his organization will look to partner with them.

“We expect we’ll play a fairly significant role,” Dobson said. “It will be different. We may move from having one customer, which has been the state, to having multiple customers.”

One of the Republicans who led the overhaul effort, Rep. Donny Lambeth, says Medicaid is not broken in North Carolina. But he says as health care evolves, the state needs to keep up.

“Fact is, we can actually do better in North Carolina for these Medicaid beneficiaries,” Lambeth said on the House floor. “Do you think quality in North Carolina across all the providers is equal and good? I can tell you it is not.”

Lambeth says the new quality metrics will make it easier to track that. He says it’ll take three to four years to get federal approval and implement the changes.

This story is part of a reporting partnership that includes WFAE, NPR and Kaiser Health News

More kudos for Oregon’s ‘coordinated care’


Here’s more on Oregon’s so-far successful ”coordinated care” model  for improving community health by addressing the social determinants of health that have for too long been virtually ignored in the United States.

Cambridge Management Group has recently been heavily involved in  the  coordinated-care project in Oregon, which has been seen as  a model for improving population health nationwide while controlling costs, especially of Medicaid.


Oregon bill seeks to modernize public-health system


Mt. Hood, Oregon’s highest peak — a volcano that hopefully will not erupt before Oregon upgrades its public health system.

The Lund Report says that Oregon state Rep. Mitch Greenlick plans to introduce a bill  to begin a ”decade-long process to modernize the state’s public health system.”

”The bill…will ask for $500,000 for the Oregon Health Authority to devise a 10-year plan for each county to improve its services ‘so that every Oregonian has access to modern public health,’ Greenlick said.”

This recalls the sort of community/population health projects that Cambridge Management Group has been working on in Oregon for the past several months.

”The legislation is based on findings by a 15-member task force…  to study the regionalization and consolidation of public health services. The task force concluded last September that the state needs new laws to establish ‘foundational capabilities’ as the minimum requirements for public health…,” Lund reported.

”The report defined those ‘foundational capabilities’ as assessment and epidemiology, emergency preparedness and response, communications, policy and planning, leadership and organizational competencies, health equity and cultural responsiveness, and community partnership development.”

In other words, it recognizes that there’s a lot more to community health than just medicine.

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