5 Ways States Achieve Meaningful Medicaid Transformation

There’s little argument that the U.S. healthcare system needs reforming.  

Take your pick of the alarming statistics, but here’s the most salient: The U.S. spends more on healthcare than any other nation but doesn’t get the corresponding results. It ranked last in quality among the world’s 11 wealthiest nations, according to the Commonwealth Fund.

State policymakers know that rising healthcare costs, combined with no improvements in quality, is an unsustainable formula. That’s why many states are exploring ways to transform Medicaid in an effort to meet the so-called “Triple Aim” of the federal Centers for Medicare and Medicaid (CMS): improving the health of the population, improving patient outcomes and experiences and reducing the per capita cost of healthcare.

Several states have already shown progress by employing funding mechanisms, such as the 1115 Waivers or Statewide Innovation Model (SIM) grants to try to transform Medicaid and address the problems in their healthcare system.

One conclusion emerging from this groundbreaking work is that sharing data with healthcare providers is key because if you don’t know how you’re performing, you can’t improve it.

Beyond data sharing, here are five basic steps states seeking Medicaid transformation should follow in order to achieve results:

Get buy-in from leadership.

While identifying goals should always be a first step, even more important is obtaining a clear endorsement from your leadership.

Transformation projects will vary in size and complexity, but to be successful they all require support from the top from inception to conclusion, including a commitment of resources and guidance to help define a project’s scope.

In addition, when these initiatives encounter the inevitable obstacles of "project fatigue" and scope creep, it’s critical to have leadership support to keep them on track. Leaders may be needed to change statutes, regulations or less formal policies that might hinder full-scale transformation.

Leadership can also use the state’s purchasing power as the Medicaid payer, for example, to drive transformation by galvanizing all stakeholders, especially Medicaid providers.

Analyze data; find opportunities.

Data analysis is key to good decision-making. Analyzing claims data can reveal critical information not just about expenditures but also the prevalence in a given area of various medical conditions, gaps in care and key outcomes of care.

Trends can be detected, and areas where value is leaking out the system can be addressed. States can benchmark local jurisdictions and individual providers against each other, tracking performance across provider silos to get at the value of the overall care delivered per condition and sub-population.

Financial analytics tools can also potentially uncover fraud, waste and abuse.  

While data alone can’t drive policy, data should guide it. Data are an essential element for turning policy into results.

Pick a funding mechanism.

States have several choices to consider in terms of funding their transformation:

1. Section 1115 of the Social Security Act gives the HHS secretary the authority to approve experimental pilot or demonstration projects that promote the objectives of the Medicaid and the Children’s Health Insurance Program (CHIP). Waivers are usually approved for a five-year period and can be renewed. The increasingly popular Delivery System Reform Incentive Payments (DSRIP) program falls under the 1115 waiver and is a unique opportunity to create a significant investment pool to fund the required system transformation.
2. While states can’t apply for them anymore, Statewide Innovation Model (SIM) grants provided financial and technical support to states that wanted to develop and test multi-payer healthcare payment and service delivery models to improve quality and lower the cost for Medicare, Medicaid and CHIP beneficiaries.
3. Section 1332 of the Affordable Care Act will encourage innovation by authorizing states to rethink the law’s coverage designs. Under a waiver, states can modify the rules on covered benefits, subsidies, insurance marketplaces, and individual and employer mandates. Any waiver, however, must demonstrate that coverage will remain accessible, comprehensive and affordable and cannot add to the federal deficit.

Muster adequate resources for strong project management.

Executing a plan well requires strong project management so goals are met and the project is delivered on time and on budget.

Project teams must be staffed adequately and should include representatives who can ensure that staffing and other resource needs are promptly identified and addressed as they arise. Staff who can address regulatory and policy concerns should also be represented on the team.

Using data and analytics, teams should develop key metrics in order to measure progress against goals and to ensure good decision-making.

Clear, consistent communications that engages and informs stakeholders is also key to successful project management.

Monitor and improve.

Successful transformation projects don’t conclude neatly on a predetermined date. In fact, if implemented properly, they can drive continuous innovation through the use of sophisticated data and analysis.

For instance, up-to-the minute data reporting can give an operational expert the critical information needed to manage a Medicaid population’s health and cost outcomes. Using real-time data regarding budgets, return-on-investments and fraud concerns, managers can adjust strategy on the fly in order to meet financial targets.

As states embark on transformation, a solid strategy that includes the savvy use of data is key.

Medicaid programs can be put on solid footing. Providing better care for patients at a lower cost is an ambitious, yet achievable goal.

Data and analysis can help lead the way.