Rauner's Budget is Bad Medicine for State's Health Services

The following post originally appeared on Crain's Chicago Business.

The much-anticipated “turnaround budget” from Illinois Gov. Bruce Rauner feels more like a “look back,” parading out failed ideas from past years. Rauner says this budget "preserves services to the state's most vulnerable residents”—but a quick review suggests this is far from true. Instead, we see a budget that:

• Further decimates a fragile community mental health system
• Reduces access to lifesaving drugs for people living with HIV and prevention services for those at risk of HIV
• De-funds critical substance-abuse treatments
• Drastically reduces cost-effective breast and cervical cancer screening services
• Makes it harder, and in some cases impossible, for people with disabilities and seniors to get support to live at home
• Reduces funding for evidence-based tobacco prevention and cessation services
• Eliminates Medicaid benefits for preventive health services, including adult dental care
• Eliminates health insurance for workers with disabilities, coverage unavailable in the private marketplace
• Slashes funding for hospitals serving Medicaid populations
• Eliminates funding for care coordination, originally designed to contain costs
• Secures Illinois' position near the bottom of states for per-enrollee Medicaid funding

It's ironic the governor calls these cuts “tough medicine,” when the proposed budget would deny any medicine and critical health care services to so many. We've been down this road before, and here's what we learned:

• Cuts of $113 million to mental health and addiction treatment services in fiscal years 2009-11 increased state costs by more than $18 million due to increased emergency room visits, hospitalizations and nursing home placements.
• Elimination of Medicaid coverage for adult dental services in 2012 caused spikes in emergency department visits for dental problems. In-patient ER treatment for dental problems averaged $6,498, nearly 10 times the cost of preventive care delivered in a dentist's office.
• Disinvesting in HIV prevention will lead to new infections, for which the Centers for Disease Control estimates lifetime treatment costs of $379,668 per case.
• For every dollar Illinois spends on providing tobacco cessation treatments, it has on average saved $1.29. Cutting funding for smoking cessation services will increase costs by up to $32.3 million annually in health care expenditures and workplace productivity losses.

As proposed, the Rauner budget is not only bad for our health, but it's bad for businesses, too, likely resulting in decreased productivity, loss of jobs and economic activity, and greater health care costs for employers. Some examples:

• The proposed child care “intake freeze” and increase in parent co-pays will lead to increased absenteeism as employees will take time off to care for children. Such absenteeism already is costing American businesses nearly $3 billion annually.
• Planned cuts to Illinois hospitals are expected to result not only in the loss of more than 12,500 jobs but $1.7 billion in economic activity.
• Cuts in funding for health care services, such as cancer screening, most certainly will increase the health care costs of Illinois businesses. One study of major employers found that patients with cancer cost five times as much to insure as patients without cancer ($16,000 versus $3,000 annually).

We urge the governor to listen to the critics of this budget and learn from Illinois' past experiences. We stand prepared to support him on this learning curve.

Barbara A. Otto
CEO
Health & Disability Advocates

Update:Illinois’ Care Coordination and Managed Care System

In January 2011, the Illinois legislature passed a bill that requires 50% of the State’s Medicaid population to be covered in a risk-based care coordination program by 2015. Subsequently, in May 2012, the State Legislature passed the SMART Act, cutting Medicaid services and projecting cost savings through various care coordination initiatives.

The care coordination, or managed care, initiatives referenced through this bill are: the Integrated Care Program, the Dual Eligibles Capitation Demonstration and the Innovations Program. All three of these initiatives have a goal to better coordinate primary, acute, behavioral health and long-term supports and services thereby improving the delivery of health services and lowering health costs.

The move to better coordinate care across primary, acute, behavioral health and long-term supports and services is in alignment with the federal Affordable Care Act (ACA), passed in March 2010. In fact, Illinois has made an effort to take advantage of several of the ACA provisions to move towards a better coordinated and integrated health system.

One of the ACA provisions Illinois is interested in is called Medicaid health homes for individuals with chronic conditions. To date, Illinois has filed a draft Medicaid state plan amendment to create health homes. The other federal ACA inititiave relating to care coordination that Illinois interested in is the Medicare-Medicaid Alignment Initiative, or the Dual Eligibles Demonstration Project. Illinois has submitted a proposal for this demonstration project.

For more details about the various care coordination, or managed care, initiatives in Illinois, please reference the document “Illinois Health Reform 2012: Care Coordination, Managed Care and Long-Term Services and Supports” developed by Health & Medicine Policy Research Group.

Kristen Pavle
Associate Director, Center for Long-Term Care Reform
Health & Medicine Policy Research Group

Moving Forward: Current Waivers for Coordinated Care Projects in Illinois

“Care Coordination,” along with related terms like “managed care” and “medical home” have become the buzz words of health care reform. The terms refer to new types of health care delivery models that many states and programs are turning to as the key to reforming the costly and arguably inefficient health care system.  Currently, the health care system mostly operates as a “fee-for-service” model, which critics argue incentivizes overutilization of medical services and shifts the focus away from effective preventative care, leading to excessive costs. Organizing groups of health care providers around patients, with a greater level of communication between doctors and a greater focus on care that keeps patients from getting ill could streamline health care delivery in a way that lowers costs and improving quality of care (for a more in-depth look at coordinated and managed care, go here or here).

In recent years, federal health programs, like CMS, have started to investigate the potential of care coordination via demonstration projects, grants and waivers for states or health care providers willing to participate. The Affordable Care Act also encourages exploration of these new care delivery models. In 2011, Illinois passed Public Act 096-1501, also known as Medicaid Reform, and began the Illinois Innovations project. As a part of that reform, the state is currently utilizing these waivers and grants:

The Integrated Care Program (ICP) is a 5-year pilot program that transfers all Medicaid (but not Medicare) eligible adults in Suburban Cook County to a Managed Care organization (MCOs). The 40,000 people included in the program, have two MCOs to choose from, one Aetna Better Health and IlliniCare Health Plan, Inc. The program is currently in Phase I, which focused on medical care. Phase II will focus on long-term care (set to begin September 2012), excluding long term care for those with developmental disabilities, which will be the focus of Phase III (no current implementation date).

Coordinated Care Entities (CCE) is a project intended to help Illinois enroll 50% of Medicaid clients into coordinated care projects (as called for by Public Act 096-1501). The CCEs are looking to cover at least 500 enrollees in a Health Home, FFS, Shared Savings or Bundled Payment model of care delivery. Illinois decided to release a request for proposals to medical care providers, in order to test the interest and capacity of community health organizations to offer coordinated care to patients, instead of simply enrolling Medicaid clients into Health Maintenance Organizations (HMOs). In January, Illinois released requests for proposals for Health Homes for chronically ill adults. Awards are expected to be announced by May 2012. HFS plans to release requests for proposals for CCEs to target children with complex medical needs by June 2012.

The proposed Cook County 1115 Waiver, currently pending with CMS, seeks to cover up to 200,000 uninsured patients who will become eligible for Medicaid once Affordable Care Act Medicaid Expansion takes place in 2014.

The Dual Eligibles program targets those who are eligible for both Medicaid and Medicare. The program would integrate the care that dual eligibles receive into one Managed Care Program. The proposal was open to a 30-day public comment period that closed in late March, and will be sent to CMS for approval.

Under the We Choose Health Community Transformations grant, the Center for Disease control has given the Illinois Department of Public Health $4,781,121 to serve the state of Illinois, excluding large counties. Work will focus on expanding efforts in tobacco-free living, active living and healthy eating, quality clinical and other preventive services, social and emotional wellness, and healthy and safe physical environments. This grant will dovetail with Illinois’ State Health Improvement Plan (SHIP), a prevention-focused, comprehensive approach to improving the health of Illinois residents.

The State has proposed changes and possible mergers of the Home and Community Based Waiver programs including the DORS Home Services Program and the Community Care Program. The major proposal affecting the HCBS waivers is a proposed change from a Determination of Need (DON) threshold of 29 to 37 in order to obtain services. DORS has also proposed reducing the Service Cost Maximums in the HSP program to the levels in the CCP program.

The State of Illinois and Medical Home Network partner for improved care coordination

Last week the Illinois Department of Healthcare and Family Services and the Medical Home Network (MHN) announced an innovative partnership that could mean better care and lower cost of care for Medicaid beneficiaries.

MHN is one of the largest collaborations of safety net providers in the country working to deliver better coordinated care to vulnerable populations. Partnership with the State allows MHN to test promising delivery and payment innovations that impact approximately 170,000 Medicaid beneficiaries, who make up just less than 10 percent of the State’s total Primary Care Case Management (PCCM) Medicaid population and 11 percent of PCCM costs. The vast majority of these beneficiaries live on Chicago’s South and Southwest Sides, areas where healthcare is fragmented and health status is generally poor.

In addition to the State, this public-private partnership includes the second largest public health system (Cook County Health and Hospitals System), a renowned academic medical center (Rush University Medical Center), a hospital focused on chronically-ill children (La Rabida Children’s Hospital), three community hospitals, six Federally Qualified Health Centers (FQHCs) and an extensive physician network.

Already, MHN has begun to implement innovative technology called MHNConnect that drives meaningful improvement in care coordination by virtually connecting disparate providers serving the population. MHNConnect, a secure, web-based portal, sends real-time alerts on patient hospital activity to Medical Homes (primary care sites) and makes historical prescription and medical claims data available to providers at the point of care. Doctors’ moments of “if I only knew” are turning into “now I know.”

MHNConnect is an enhanced version of a platform that reduced hospital admissions by 31%, ED use by 34% and increased patients’ visits to their PCP by 29% when applied to an uninsured population in California. The MHN model of care has the potential to deliver better care at a lower cost. MHNConnect and other MHN initiatives are expected to significantly improve critical transitions of care by using real-time information technology to increase the percentage of patients who follow-up with their Medical Home within seven days of a hospital stay or visit to the emergency department (ED). MHN also anticipates reducing the populations’ annual ED visits (approximately 100,000 in a 12-month period) by preventing over 3,000 avoidable visits.

During the first day MHNConnect went live, a MHN Medical Home was able to identify a patient who frequently went to the ED for asthma complications but had not visited his primary care physician or filled a medication that could keep his condition under better control. New information from MHNConnect allowed the Medical Home to identify the patient, contact him to schedule an appointment and begin to manage the patient’s condition at his Medical Home.

Within the first three weeks of using MHNConnect, care coordinators at a second Medical Home were able to successfully schedule timely follow-up appointments after Inpatient Discharges and ED visits for 93% of patients with MHNConnect hospital activity. MHN is encouraged by dramatic results such as these, as well as initial positive feedback from patients and providers.

MHNConnect and other MHN initiatives are designed to improve care coordination, a key to improving quality and reducing cost. MHN expects to reduce total cost of care by 2-4% in year one. If projected savings are realized, the MHN model could serve as a delivery framework to meet the needs of similar communities across the country.

Funded by the Comer Science and Education Foundation, MHN is currently rolling out MHNConnect to additional sites. Read more at http://www.mhnchicago.org/node/21.

Cheryl Lulias
Executive Director, Medical Home Network

                

Guest Post: Why Health Reform Holds No Fear For One Pediatrician

Reprinted with permission from CommonHealth WBUR.org

I remember the bad old days. By which I mean, I remember the 1990s era of “capitation” and all its ills — the rigid HMO spending limits that made money come between patients and their physicians.

But I’m not scared that they’re coming back.

Some worry that the coming “global payment” phase of Massachusetts health reform — in which health care providers are put on annual “global” budgets for each patient’s total care rather than paid for each procedure — will mean a return to capitation.

That would be terrible. As a pediatrician of 25 years, I remember the problems with capitation. It discriminated against special-needs children. It drove a wedge into the doctor-patient relationship, creating conflicts of interest by making doctors responsible for controlling costs. Access was restricted. Chronic disease management was not a priority.

But I welcome the impending era of global fees. If the concept of the Medical Home is incorporated — with its family-centered care incentives and rewards for innovations that save families money and time as well as improving quality — it could work.

Some see global payments as “capitation in sheep’s clothing.” However, if negotiated properly, there can be enormous opportunity for physicians to unleash their creative skills as never before in collaboration with families. It could be an opportunity to empower and educate families to manage more of their own minor health-care issues if they so choose — and as their deductibles increase, they will so choose.

Also, in our current system, insurance rate increase are coming more and more out of families’ pockets, not employers. Will there be a day when they just simply can’t afford going to the doctor? We need to act!

My practice, Westwood-Mansfield Pediatric Associates, is preparing for global fees. In our office, the most common reason for an illness visit is a sore throat. We responded to this by giving patients (at certain routine check-ups) a free home strep test to be used if certain criteria are met, with the proviso that patients must be seen in the office if the home test is positive or if the individual is not feeling better within 48 hours.
Since 65%-75% of rapid strep tests are negative in our office, we have been able to reduce office visits for sore throats by 20% and replace them with healthy lifestyle visits for overweight children.

We also give a prescription for a course of oral steroids, along with a written “Nighttime Asthma Attack Plan,” to parents whose children have asthma and instruct them on how to manage an asthma attack in order to prevent an ER visit. In addition, we have produced and posted, ourselves, videos of many common problems and how to avoid the emergency room.

The old fee-for-service system has stifled our capacity to be creative. The existing categories of services that can be billed for has also contributed to these barriers. Our own fear of change also plays a role.

The late Steve Jobs and Apple have been successful because they have been able to give people what they want before they realize they need it. This is what we strive to do. By empowering families to manage minor illnesses themselves (through patient handouts, websites, YouTube videos, and even “Apps”) we can shift the focus to the top health care problems of children – obesity, asthma, ADHD/learning style issues, mood disorders and allergies. In this model pediatricians can have a very rewarding job and make a good living.

Ultimately, the fact is that pediatrics has changed, and we have to change with it. Immunizations have eradicated most serious infectious diseases. Pediatrics must redefine itself as a specialty focused on wellness, seriously ill children, and chronic disease management and less on volume.

We can work on the concept of the Medical Home to improve care for our families in a team-based manner. In market terms, we need to give parents more value for either their co-pay dollars or their deductibles. Empowering our families is where our value will be coming from in the future, and global payments can help us get there.

Dr. Lester Hartman
Guest blogger
Dr. Hartman is a senior associate at Westwood-Mansfield Pediatrics, a Masters in Public Health candidate at Harvard and vice president of the Haitian Organization Program for Education and Health.