As policymakers across the country look to balance their budgets, some are turning to Medicaid, recycling the same harmful policies they’ve used year-after-year: eliminating coverage for vulnerable Americans, restricting critical benefits like prescription drug coverage, imposing premiums on those who can’t afford them, and slashing already-low provider reimbursement rates.
Community Catalyst and Georgetown University Health Policy Institute Center for Children and Families created the States of Innovation blog series to shine a spotlight on states that are trying to find a better way. Our blog series highlights states that are pioneering new approaches to making Medicaid more sustainable without harming – and often by improving – care for the millions of vulnerable seniors, people with disabilities, children and low-income parents that rely on Medicaid. ________________________________________________________________
Camden, New Jersey is one of the nation’s poorest cities and has one of the highest crime rates in the nation. Homelessness, drug trafficking, high unemployment, and sky rocketing health care costs are a fact of life in this city of just 79,000. Between 2002 and 2008, 978 patients made 3,882 visits to emergency departments in the city – a majority of the visits were for preventable conditions that could be treated by a primary care doctor.
In this dire situation a family practice physician, Dr. Jeffrey Brenner, pioneered a successful approach to reducing hospital readmissions and health care costs of the sickest and most vulnerable populations. A recent episode of PBS’s Frontline highlighted Dr. Brenner and his innovative work and praised his initiative as a new model of care. The work of the Camden Coalition of Healthcare Providers, the practice that Dr. Brenner set up, laid the groundwork for the “Garden State” to adopt this model, the Medicaid Accountable Care Organization (ACO) Demonstration Project, which was signed into law by Governor Christie last week.
Where it all began
An article by Atul Gwande in The New Yorker features a story about Frank Hendricks, who had multiple health issues, weighed 560 pounds, had a substance abuse problem and lived on welfare. Hendricks spent a majority of his time in the hospital because no one in the health care system was able to effectively manage his care. Dr. Brenner visited him regularly, arranged for a social worker and a nurse practitioner to coordinate his care, and advised him on how to best take care of his health -taking medication on time, healthy eating habits, etc. This team approach to care resulted in a significant improvement in Hendricks’s health.
Hendricks is an example of a “super utilizer” in Camden’s health care system. Through the collection of hospital data, Dr. Brenner found that a core area in the city, where a nursing home and a low-income housing tower are located, accounted for a majority of the hospital visits and millions of dollars in health care costs. Mr. Hendricks’s case and the other super utilizers identified by Dr. Brenner’s work showed that primary and preventive care with a team approach, which takes the whole person into consideration, significantly improves the overall health of the patient. According to Dr. Brenner this team approach has resulted in a 40-50 percent reduction in Camden’s health care costs since he started this work in 2007. The cost saving strategies that Dr. Brenner and his team have used include:
* Nurse practitioner-led clinics in high cost buildings
* More super utilizer outreach teams
* Medical home-based nurse care coordination
* More same day appointments (open access scheduling)
What is New Jersey doing?
Despite the great success of Dr. Brenner’s work to improve patient care and bring down overall health care costs, there are a few barriers to replicating this model elsewhere. Many state Medicaid programs do not have a payment system that provides incentives for providers to work together to improve care for patients, and hospitals in many states often lose money if the rate of preventable hospitalizations decreases.
New Jersey passed the Medicaid ACO Demonstration Project to try to remedy those misaligned incentives and help other communities replicate Dr. Brenner’s success. This legislation enables community-based, non-profit coalitions of hospitals and primary care providers to apply for recognition by the state of New Jersey as Medicaid ACOs. Once approved as ACOs, these coalitions would qualify for “shared savings” if they reduce Medicaid costs by providing increased access to primary care and working together to better coordinate patients’ care.
Under the legislation, the state is required to share any savings it accrues as a result of improved care coordination with the participating providers in the ACOs. To protect patients from any adverse incentives that might give ACOs a reason to skimp on care, ACOs must demonstrate improved care for their patients in order to qualify for these “shared savings”. The state will therefore be measuring – and requiring – quality improvement based on benchmarks which include: patient experience, access to primary and behavioral care, and reduction of unnecessary and inefficient medical costs.
Key lessons for other states
Dr. Brenner’s work shows that by providing more primary care and better coordinated care, we can drive down costs and create better outcomes for patients. The key is offering the right incentives to providers so they can work as team to coordinate care for the patient.
While New Jersey offers us one model to accomplish that, the Affordable Care Act (ACA) encourages many innovative approaches to improving care while reducing costs. For example, the ACA established the Center for Medicare and Medicaid Innovation (Innovation Center). The Innovation Center has the resources and flexibility to rapidly test innovative care and payment models and encourage widespread adoption of practices that promote better health and deliver better health care at lower cost.
The ACA also created an option for states to quality for enhanced federal funding to set up health homes to better coordinate the care of Medicaid beneficiaries with chronic physical or mental illness. If we can make this approach work for the sickest and most vulnerable population – then the health care system can work for everyone.
Editor’s Note: This is the second blog in our series. You may view the previous blog here.
