I read the Op-Ed in the Boston Globe and asked Doug to write a piece or pieces in a more detailed fashion. There have been allusions to this issue as a cost factor, but no policy consideration here to date.
Post by Doug Brown
Due to the complexity of organizations today, there is commonly a “silo mentality” that develops where one department often doesn’t know what another is doing. Employees are good at looking at the “trees” within their silo, but very few are seeing the forest. We have all seen it. The result is usually organizational dysfunction. Nowhere is this more pronounced than at one of our largest government agencies – the Centers for Medicare and Medicaid Services (CMS). What’s worse, this dysfunction has enormous consequences for the cost and quality of health care that is delivered in this country. And yet, as we embark on the most significant reform to our health care system in over forty years, no one is talking about this issue.
In a July 20 Op Ed in the Boston Globe entitled Retooling the Medicare/Medicaid Model, I explored this issue. Specifically, I highlighted a program in Massachusetts that successfully breaks down the silos between these two programs to do what’s best for patients.
This care delivery model, called Senior Care Options, pools funding from Medicare and Medicaid to allow private organization to integrate care for dually eligible individuals (those eligible for both Medicare and Medicaid, and some of the most costly individuals on our public programs) to provide truly coordinated care that is patient centered and cost effective. The model has been very successful in keeping seniors out of expensive nursing homes and making them happy and satisfied. So the question is: in light of what seems to me to be such an obvious opportunity, why aren’t more states doing something about it and why aren’t more people talking about it?
I received a number of interesting responses to my Op Ed, some of which speculate on this question. One was from Renee Markus Hodin of Community Catalyst, a well respected consumer advocacy organization. She reported that her organization has been trying to make headway on this issue for years. They even got a provision inserted into the original House health reform bill to specially protect and encourage more SCO programs. But the provision was eliminated, apparently due to a misunderstanding. I am told it was opposed by some beneficiary groups “who were wary of the provision being abused by states that want to dump their duals into private plans and/or by plans that were not committed to providing the kind of care delivery system that we see under the SCO program.” That has not been the experience of SCO at all. But unfortunately, it seems that some of the new “Special Needs Plans” (SNPs) that were created recently by Congress to try to address dual eligibles are not working as intended and do not fully integrate care like SCO does.
The beauty of the SCO program is that there is a three-way contract; between the state Medicaid agency, Medicare and the SCO. This is critical to ensure full integration among both programs. Renee tells me they are trying again and hoping to garner more support.
I received another response from Jennifer Baron, a senior researcher at the Harvard Business School. She too has been working on this issue for a number of years. Here was her post to the online version of my Op Ed:
In April 2008, Harvard Business School Professor Michael Porter and I published a case study profiling Commonwealth Care Alliance (CCA), one of the three organizations offering a SCO plan. This case is one of the few examples we’ve found of a high-value approach to insurance coupled with an innovative care delivery model. Invariably when the case study is taught, students approach us after class to inquire how they can become involved with CCA or SCO.
We’ve found it particularly inspiring that under the pooled Medicare/Medicaid payment model, CCA managed to successfully serve one of the most complex and costly patient populations on the planet. In 2006-7, the only patient population for which CCA’s costs exceeded average premiums was the institutionalized population. Average premiums for the frail elderly patients who remained outside of institutional settings all exceeded costs. Talk about aligning financial and patient incentives!
My understanding is that once SCO graduated from a demonstration to a Special Needs Plan in 2009, the single three-way contract with Medicare and Medicaid – one of the most innovative aspects of the reimbursement model – disappeared. Though both Medicare and Medicaid continue to fund the plan as a SNP, I believe they must now contract separately with participating organizations.
For additional information, the CCA case study abstract is posted on the Institute for Strategy & Competitiveness website.
My best judgment of why this is not getting better traction is twofold: first, Medicare and Medicaid are incredibly complex and few inside and outside of healthcare really understand either one, let alone the way they intersect (that is why I tried hard to make my Op Ed explain the issue as simply as possible; you can let me know whether I succeeded). Second, we have lacked leadership and focus at the federal level. CMS has become such a large bureaucracy that it is overwhelming to even think about how one might reorganize it so that it better serves patients. But in my view it must be done. I remain very hopeful that with a new administration and a new focus on health reform, we have a unique opportunity to finally address this issue. I would love to hear your thoughts and ideas on the subject, including ways we might try to help make this happen.
by Doug Brown