By Rishabh Mehrotra and Newt Gingrich
What does the ideal Medicaid program look like? The answer is not obvious.
One key challenge for policymakers is to reconcile the dualistic nature of healthcare. On the one hand, healthcare is an exercise of numbers that describe health outcomes, actuarial trends, characterization of risk and overall costs. However, the art of healing is a profoundly personal and individual matter. Health outcomes are achieved one person at a time.
No one program design can sufficiently serve the needs of 50 separate state Medicaid programs, much less the unique needs of all recipients in even one state. Thus, the ideal Medicaid program needs to balance normative best practices in health metrics and technology with the flexibility to provide highly personalized coverage at the point of delivery.
Another challenge for policymakers is to determine which innovations from private sector healthcare can be successfully applied to Medicaid. In some cases, best practices can be lifted from commercial populations verbatim. More often, some translation is required.
Finally, Medicaid cannot be transformed without addressing the financial incentives that drive irrational policies and behaviors at every level, from the federal government to providers and recipients.
We see four guiding principles that address the diversity and standardization required to transform Medicaid, that still allow flexibility within each state program. Taken individually, each principle has value, but they act synergistically. To truly transform Medicaid, the adoption of all principles is necessary.
Principle 1: Structure and Incentives. In transforming Medicaid, proper alignment of structures and incentives is perhaps the most challenging principle. Incentives in today’s Medicaid programs are misaligned. States receive federal funds for total program expenditures that boost economic activity, encouraging expansion rather than efficient operations. Providers are discouraged from participating in the Medicaid network because of low reimbursement levels, and those that do participate must focus on quantity (seeing more Medicaid patients) rather than quality (spending adequate time with these patients and following evidence-based care).
An optimal Medicaid program’s architecture will direct resources so that the common goal, at all levels, is to improve the health outcomes of Medicaid recipients and decrease costs. Medicaid programs can make proactive investments toward achieving future goals by rewarding healthy decisions and encouraging individual responsibility at the state and recipient level; offering incentives to providers that deliver evidence-based care through well-designed pay-for-performance programs; and improving performance continuously through CMS waivers, pilot programs and public- private partnerships.
Principle 2: Promote Social Advancement. Personal empowerment not only aligns with our social values; it saves money by decreasing the use of the acute healthcare system in favor of common sense. One aspect of empowerment is built around the principle of healthcare consumerism – a personalized approach that fosters greater personal involvement in one’s health, improves health behaviors and encourages prudent healthcare purchasing patterns. Its principal tenets are behavioral change and individual health ownership.
A consumer-centric Medicaid model supplies efficient, effective and empowering healthcare to recipients, while providing state sponsors with fiscally sustainable delivery strategies by providing social and economic support to im- prove recipients’ sense of personal relevance; integrating families and communities; leveraging best practices, technology and evidence-based medicine to achieve the best possible healthcare delivery and outcomes; and relying on flexible building blocks for program design.
Principle 3: Manage Health and Financial Risks. Just as the pilot of a commercial jet needs instruments to fly the plane, a Medicaid director needs a powerful statistical dashboard to manage the program. To be successful, this dashboard must have a number of standard capabilities, such as a Medicaid health index providing a single, aggregate measure that characterizes and quantifies the health of the entire state Medicaid population, as well as component scores that identify the major population health issues that contribute to the overall score. To make this health index meaningful, however, it should also directly tie back to projected future healthcare spending.
All states have some formal Medicaid measures in place; however, these measures may not be complete, timely or effectively linked to daily operational and intervention decisions. In addition, states partnering with multiple health plans may not be able to obtain an accurate comparison across populations. At the federal level, CMS has limited authority to standardize data collection and requirements. Many Medicaid programs are limited in their ability to gain an accurate or complete understanding of the financial and health risks of their current covered population.
Principle 4: Provide Integrated Delivery. Integrated delivery is both a philosophy for designing public health programs as well as an organizing principle for implementing the technology and processes these programs need. To be effective, consumer-centric programs need to address the whole person and require a high degree of integration and coordination across programs. Services delivered through silos simply do not work as well. To make an integrated approach work, technology must support the creation of a 360-degree portrait of recipients’ health status – a personal health record – at any given time. Breaking down the silos in today’s healthcare system not only improves patient care and outcomes, it raises the efficiency and cost-effectiveness of the delivery system itself.