March 2004 HIGH COST MEDICAID PATIENTS An Analysis of New York City Medicaid High Cost Patients Robert F. Wagner Graduate School of Public Service Center for Health and Public Service Research

2 SUMMARY OF FINDINGS High cost patients account for a large share of Medicaid costs (20% patients => 70-80% of expenditures) There appears to be substantial opportunity for improved management of high costs patients –There are high levels of chronic disease (many with multiple chronic conditions) –Many have multiple hospitalizations –Many appear to lack a medical home, visiting multiple providers in multiple “systems” Improved management of these patients will present substantial challenges, with high levels of… –Substance abuse –Mental Illness –Learning disability Improved management is likely to require… –A capacity to identify patients in real time –Improved integration/coordination of health care services Primary care and specialty care Hospitals and ambulatory care Home care services and primary care services –A capacity to link patients to non-medical services (housing, social services, etc.)

3 ANALYTIC APPROACH Limited detailed analysis to patients not eligible for mandatory enrollment in managed care Divided patients into subgroups (buckets) based on characteristics that are likely to impact intervention design –Children vs adults vs elderly –Substance abuse –Serious mental illness –HIV/AIDS –Institutional status (SNF/HRF/ICF) Focused on top 3% of most costly patients with each subgroup (limiting analysis to subgroups with large numbers of patients and significant total expenditures) Analyzed expenditures Examined patterns of utilization Profiled diagnostic characteristics

4 SUBGROUPS ANALYZED Disabled children (non-ICF/HRF/ICF) Disabled adults –Substance abuse –Serious mental illness –Non-HIV/AIDS, substance abuse, or serious mental illness Elderly –Dual eligible - non-disabled (non-SNF/HRF/ICF) –Dual eligible - disabled (non-SNF/HRF/ICF) –Medicaid only - non-disabled (non-SNF/HRF/ICF)

5 DISTRIBUTION OF PATIENTS AND EXPENDITURES CHILDREN - AGE DISABLED Disabled [Non-Institutionalized] 68.7% PatientsExpenditures Source: NYU Center for Health and Public Service Research, UHF, NYSDOH - Data for FY 1999.

6 DISTRIBUTION OF PATIENTS AND EXPENDITURES CHILDREN - AGE DISABLED High cost cases (top 3%) in FY 1999… Total expenditures were $173 million Averaged $108,439 per patient Accounted for 31.6% of all costs for disabled children Source: NYU Center for Health and Public Service Research, UHF, NYSDOH - Data for FY 1999.

7 ANATOMY OF THE AVERAGE HIGH COST PATIENT HIGH COST CHILDREN - AGE DISABLED Source: NYU Center for Health and Public Service Research, UHF, NYSDOH - Data for FY InpatientOutpatientOther Expenditures ACS ($4,965) Delivery ($5,877 ) Injury ($2,628) Other Inpatient ($23,158) Psych ($12,339 ) MD/Clinic ($2,718) Psych Outpatient ($874) Rehab ($1,502) Home visit ($25,504) Other Outpatient ($14,305) Pharmaceuticals ($3,981) DME ($3,052) All Other ($9,119) School based ($5,909) 42.1% 43.8% 14.1% $108,439

8 48.5% with a chronic disease –36.2% with asthma –16.6% with multiple chronic diseases 45.5% mental retardation 45.6% other congenital disability 31.8% cerebral palsy 61.0% with psychiatric conditions –15.0% attention deficit disorder –14.0.% pre-adult adjustment disorder –11.5 % personality disorder –8.1% major depression/bipolar disorder –7.1% schizophrenia On average visited 3.1 different provider organizations 65% had multiple hospitalizations DIAGNOSTIC CHARACTERISTICS AND UTILIZATION PATTERNS HIGH COST CHILDREN - AGE DISABLED

9 DISTRIBUTION OF PATIENTS AND EXPENDITURES ADULTS - AGE DISABLED PatientsExpenditures Disabled [Non-HIV/Alc/Drug/Schiz/SNF/ICF] 77.3% Source: NYU Center for Health and Public Service Research, UHF, NYSDOH - Data for FY 1999.

10 DISTRIBUTION OF PATIENTS AND EXPENDITURES ADULTS - AGE DISABLED Source: NYU Center for Health and Public Service Research, UHF, NYSDOH - Data for FY 1999.

11 ANATOMY OF THE AVERAGE HIGH COST PATIENT HIGH COST ADULT- AGE DISABLED [Non-HIV/AIDS, Non-SNF/ICF, Non-Alc/Drug/Schiz] Source: NYU Center for Health and Public Service Research, UHF, NYSDOH - Data for FY ACS ($7,370) Psych ($1,120 ) Cancer ($5,556) Other Inpatient ($22,733) Injury ($4,118 ) MD/Clinic ($2,100) Psych Outpatient ($424) Rehab ($1,929) Home visit ($23,798) Other Outpatient ($26,490) [Including outpatient LTC] Pharmaceuticals ($5,292) DME ($1,252) All Other ($8,248) Dialysis ($2,203) 36.2% 50.3% 13.5% $104,981 InpatientOutpatientOther Expenditures

12 Source: NYU Center for Health and Public Service Research, UHF, NYSDOH - Data for FY DIAGNOSTIC CHARACTERISTICS AND UTILIZATION PATTERNS HIGH COST ADULT- AGE DISABLED [Non-HIV/AIDS, Non-SNF/ICF, Non-Alc/Drug/Schiz] 69.3% with a chronic disease –48.7% with multiple chronic diseases –30.8% diabetes –53.5% coronary artery disease/hypertension –23.4% congestive heart disease –17.5 COPD or other lung disease 27.9% mental retardation 15.5% deaf/blind 10.4% cerebral palsy 5.3% multiple sclerosis 47.8% with psychiatric conditions –12.3% major depression/bipolar disorder –12.8%adjustment reactions –10.5% senility/organic syndrome –20.6% anxiety/other depression 75% visited multiple provider systems, on average visiting 3.2 different provider organizations 86% had multiple hospitalizations

13 Source: NYU Center for Health and Public Service Research, UHF, NYSDOH - Data for FY DIAGNOSTIC CHARACTERISTICS AND UTILIZATION PATTERNS HIGH COST ADULT- AGE DISABLED [Alcohol/Drug and Schizophrenia Patients] Alcohol/Drug Patients [Non-HIV/AIDS, Non-SNF/ICF] 89.5% with a chronic disease –76.4% with multiple chronic diseases –21.3% of hospital admissions are for chronic disease 17.8% of hospital admissions are for preventable/avoidable (ACS) conditions More than 60% have a alcohol/drug related psychiatric disorder 20% have no primary care visits and less than 1% of total expenditures are for primary care Averaged 4 emergency department visits per year (not resulting in a hospital admission) Schizophrenia Patients [Non-HIV/AIDS, Non-SNF/ICF] 63.8% with a chronic disease –43.1% with multiple chronic diseases Average 2.5 psychiatric hospital admissions per year Average 2 non-psych hospital admissions per year 27.5% are retarded/developmentally disabled 51.4% have alcohol/drug related diagnoses Averaged 3.3 emergency department visits per year (not resulting in a hospital admission)

14 DISTRIBUTION OF PATIENTS AND EXPENDITURES ELDERLY - AGE DUAL ELIGIBLE PatientsExpenditures Non-Disabled [Non-SNF/HRF/ICF] 74.5% Source: NYU Center for Health and Public Service Research, UHF, NYSDOH - Data for FY 1999.

15 DISTRIBUTION OF PATIENTS AND EXPENDITURES ELDERLY - AGE 65+ Source: NYU Center for Health and Public Service Research, UHF, NYSDOH - Data for FY 1999.

16 ANATOMY OF THE AVERAGE HIGH COST PATIENT HIGH COST ELDERLY- AGE NON-DISABLED [Non-SNF/HRF/ICF] – DUAL ELIGIBLE Source: NYU Center for Health and Public Service Research, UHF, NYSDOH - Data for FY Inpatient ($20,756) Home visit ($40,658) Pharmaceuticals ($3,438) DME ($866) All Other ($3,438) 22.4% 70. 6% 6.0% $92,753 InpatientOutpatientOther Expenditures Other Outpatient ($24,858)

17 Source: NYU Center for Health and Public Service Research, UHF, NYSDOH - Data for FY DIAGNOSTIC CHARACTERISTICS AND UTILIZATION PATTERNS HIGH COST ELDERLY- AGE 65+ Dual Eligible - Non-Disabled [Non-SNF/HRf/SNF] 84.4% with a chronic disease –66.5% with multiple chronic diseases –$11,000 in ACS/chronic hospital admissions per year 49% have psychiatric disorder –36.3% senility/organic mental disorder $41,895 in home visit expenditures per year Dual Eligible - Disabled [Non-SNF/HRf/SNF] 93.1% with a chronic disease –80.2% with multiple chronic diseases –$20,000 in ACS/chronic hospital admissions per year 57% have psychiatric disorder –21.5% senility/organic mental disorder –25% depression $34,756 in home visit expenditures per year Medicaid Only - Non-Disabled [Non-SNF/HRf/SNF] 90.7% with a chronic disease –73.7% with multiple chronic diseases –$26,000 in ACS/chronic hospital admissions per year $21,000 in home visit expenditures per year

18 ON-GOING ANALYSES Detailed analysis for expenditure and utilization patterns for specific disease subgroups Linkage of patients to “predominant provider” (where they get most of their care), and… –Comparison of utilization/expenditure patterns among providers and provider types –Analysis of “shopping” by patients –Analysis of “dumping” by providers Analysis of “episodes of illness” –“Serial” high cost patients versus “single” episode patients –Identification of intervention opportunities Predictive modeling… –Identification of factors/characteristics that predict high cost utilization –Development of model to predict high cost patients prospectively

19 CLINICAL EXPERTS’ OBSERVATIONS Ability to identify and engage patients in real time is critical Same intervention models may work for several patient groups May require restrictive systems; tough to intervene with shoppers Will require investment in integrative infrastructure and skilled personnel

20 LIKELY INTERVENTION MODELS Strengthen links to community resources before discharge and follow up to ensure effective connections Integrate community resources for substance abuse/psych/primary care Strengthen links between home care and physicians/nurse practitioners