CHCS Center for Health Care Strategies, Inc. Center for Health Care Strategies, Inc. Bending the Trend Through Improved Quality of Care State Coverage Initiatives Workshop Allison Hamblin August 2, 2007

To improve the quality and value of health care services for people with chronic health needs, the elderly, and racially and ethnically diverse populations. MISSION

Quality as a Cost-Containment Strategy Step 4 $$-Driven Desperate Measures TBD as states are figuring out that just cutting is not slowing the rate of growth Step 3 Eligibility Capping enrollment / eliminating optional groups Step 2 Services Eliminating optional services Step 1 Reimbursement Across the board provider rate cuts Level of Difficulty LOW HIGH FocusExamples Step 5 Quality Care management for people with co-morbidities/high-risk conditions Provider-level pay for performance

Medicaid – A Land of Opportunity High prevalence of chronic illness Existing systems for managing care Aligned financial incentives Growing evidence base for what works Imminent need to “bend the trend” to support coverage expansions

Focus on Value Shift the focus from spending to investing Allocate resources to get the best value for every dollar spent in terms of improved outcomes and ROI Develop a “balanced portfolio” for short-term and longer-term returns –Not everything worth doing has cost-savings potential in the short-run –Use what does to finance what doesn’t

Total Per Capita Costs Percent of Medicaid Population Source: Sommers A. and Cohen M. Medicaid’s High Cost Enrollees: How Much Do They Drive Program Spending? Kaiser Commission on Medicaid and the Uninsured, March Step 1: Identify the Who

Medicaid “Best Buys” 1.Care management for high-risk pregnancy 2.Care management for high-risk asthma 3.Managed care for aged, blind and disabled beneficiaries 4.Managed care for long-term care supports and services 5.Care management for high-risk, high-cost members with multiple chronic conditions Rethinking Care Program Focus on high-need, high-cost populations Step 1: Identify the Who

Step 2: Identify the What Business Case for Quality –Building the case in Medicaid managed care –10 demonstrations looked at asthma, diabetes, substance abuse, prenatal care, pressure ulcers Key findings indicate strongest ROI potential for: –Stratified target populations –Conditions responsible for large portion of inpatient/ER utilization among target population –Childhood asthma, high-risk pregnancy Next steps –Strengthen the evidence –Broaden the stakeholders

Step 2: Identify the What The Evidence Base –Systematic review of the published literature to identify interventions with both quality improvement and cost- savings potential –Developed in partnership with Mathematica Policy Research –Initial focus on asthma, CHF, depression, diabetes, high- risk pregnancy –Inclusion criteria: study quality, generalizability to Medicaid, breadth of intervention strategies

Step 3: Identify the Where and How ROI Purchasing Institute –12 month initiative supported by CMWF and RWJF –8 states, including AZ, CO, CT, ID, LA, OK, PA, WA Project Goals: –Build state capacity to include ROI forecasting into planning of quality initiatives –Provide tools to facilitate analysis of and dialogue around investments in quality –Build realistic expectations for savings and for the magnitude of change needed to achieve such savings

Step 3: Identify the Where and How ROI Forecasting Calculator –High-level planning and discussion tool for use by states and health plans Determine how to target resources most effectively Make a financial case for obtaining resources for quality investments Analyze trade-offs associated with resource allocation alternatives –Source of assumptions whose breadth, depth and overall validity will grow with use (Evidence Base) –Complement to other planning processes and considerations

ROI Forecasting Calculator

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