Care Management Can Help As Medicaid Enrollment Increases Nationwide

The Disease Management Care Blog got this submission from one of its colleagues who helps coordinate McKesson's ubiquitous disease management programs. As noted in prior DMCB posts, the value of these kinds of population-based initiatives is not being questioned by commercial insurers or in State sponsored managed care or Medicaid fee-for-service settings. Jim presents a convincing argument about why the taxpayers and their elected representatives cannot afford to not have disease management programs as part of the solution to increasing enrollment, escalating costs and serious concerns about quality.

By Jim Hardy

One percent doesn’t seem like a lot.

But every time the U.S. unemployment rate increases by 1%, about 1 million more Americans join state Medicaid programs, our country’s health insurance program for children and adults in low-income families, the elderly and people with disabilities.

This is always a cause for concern, but is potentially catastrophic in today’s economy.

As more people become eligible for Medicaid, the revenue to fund a state’s share of Medicaid and other services shrinks by 3%-4%, according to the Kaiser Commission on Medicaid and the Uninsured. Even so, in fiscal 2007 Medicaid accounted for a whopping 21% of all state expenditures, tying for first place with elementary/secondary education as the largest portion of state spending, according to the National Association of State Budget Officers.

In Colorado, for example, the Department of Health Care Policy and Financing reports that its overall Medicaid caseload increased 13% since January 2008. In February 2009, the caseload increased by more than 3,900 bringing the total number of cases to 440,274.

Because Medicaid programs are funded by tax dollars, states now face significant challenges as revenues plummet because of rising unemployment. A recent Rockefeller Institute of Government report shows that during the end of 2008, tax revenues declined 3.6% nationwide.

States aren’t about to cut Medicaid completely. But with the country’s economy in bad shape, what can we do?

Tough Choices Next?

As the Deputy Secretary for Medical Assistance Programs at the Pennsylvania Department of Public Welfare, I faced similar dilemmas. There’s no single answer, and the decisions aren’t easy to make.

To control Medicaid costs, we could:

· Toughen eligibility standards allowing fewer people to enroll;
· Eliminate certain healthcare services;
· Shift more costs to hospitals; and/or
· Reduce reimbursement rates for providers who already face significant economic challenges to maintaining their practices.

These are options of last resort, but options nonetheless.

But we have another way to trim costs, and improve health and wellness at the same time: care management programs for the chronically ill. While this may sound like another entitlement program and a way to drain nearly empty state coffers, it’s neither.

Medicaid care management programs are proven and have generated one year savings for the states of Illinois and Pennsylvania of $34 million and $35.9 million, respectively.

Care Management, the Chronically Ill and Medicaid

The National Association of State Medicaid Directors says that Medicaid beneficiaries with one or more chronic conditions, such as asthma, diabetes or heart failure, account for 80% of Medicaid spending even though they make up only 40% of the non-institutionalized Medicaid population.

Helping these beneficiaries get a primary care provider and learn new ways to better self-manage chronic illnesses – everything from ensuring prescriptions are filled and medications taken as prescribed to learning what to do when a condition gets worse – is the foundation of care management.

Care management programs support providers through consistent engagement and partnership. This close integration gets results by reducing the unnecessary use of some healthcare services through a whole-person approach to managing chronic illnesses and co-morbid behavioral health conditions.

But this is just one piece of the puzzle.

It’s difficult if not impossible to concentrate on improving health, if you don’t have a way to get to a doctor’s appointment, a roof over your head or not enough food. If beneficiaries don’t have transportation to a doctor’s appointment, food or shelter, these programs can guide them to helpful services.

Care Management Programs Decrease Medicaid Costs

When Medicaid beneficiaries get help managing asthma, for example, and work with a primary care provider, the disease is better controlled and unnecessary visits to the emergency department (ED) – where costs are much greater and the care episodic – can be reduced significantly. The same can be said for other debilitating chronic diseases. Improved health and wellness is an added benefit. Better controlled diseases can lead to more activity, getting back to work and simply feeling better.

Even so, depending on whom you ask and which report you read, care management programs may not work as well as I’ve described.

Nevertheless, it’s been my experience that a focused program – one that targets high-cost, high-risk beneficiaries with a face-to-face intervention and ensures that each participant has his or her own primary care provider and makes allowances for transitions to different levels of care – does work.

For people with asthma it’s possible to decrease annual ED visits and in-patient admissions by 11% and 29%, respectively. For those with coronary artery disease, ED visits and in-patient admissions can be cut by 2% and 4%, respectively.
A few percentage points may not seem like a lot, but applied to groups with significant costs it’s easy to see how Illinois, Pennsylvania and other states have saved millions of dollars by reducing the use of expensive and unneeded services through better Medicaid beneficiary self-management.

I’m not suggesting that this is a panacea for the economic and healthcare challenges the nation faces today; however a comprehensive Medicaid care management program is part of the solution. Now more than ever states need to explore every option, especially those that ensure the most vulnerable among us continue to get the help that they need.

About the author: Jim Hardy is Senior Vice President and General Manager at McKesson Health Solutions in Broomfield, Colo., and is the former Deputy Secretary for Medical Assistance Programs at the Pennsylvania Department of Public Welfare.