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John Baackes, CEO, L.A. Care Health Plan

Moving On: Thoughts on Bettering American Health Care

By John Baackes
L.A. Care Health Plan

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Original Publish Date: August 8, 2017

With the health care roller coaster seemingly at a halt, 74 million Americans who rely on Medicaid for their health needs and livelihood can breathe a sigh of relief – for now. Some may view the failed efforts to repeal and replace the Affordable Care Act (ACA) as a victory, but the truth is that health care reform is far from over. To be sure, there is still a mountain of work to be done. Even so, I remain optimistic that Congress can come together to craft meaningful Medicaid reform through a collaborative, bipartisan approach. But in addition to crossing party lines, there is one critical thing that must happen.

Members of Congress must heed advice from those of us who know how health care works. If it is not already clear from the theatrics that have played out on the national stage, our health care system is remarkably complex. As many folks came to realize, Medicaid – the federal-state health insurance program for low-income U.S. residents – is a major and critical component of health care. Due in part to its expansion under the ACA to include all individuals and families earning below 138% of the Federal Poverty Level, it is now the single largest payer for health care in the United States. As the CEO of a publicly-run Medicaid plan whose mission is to serve the most vulnerable populations, I would argue that Medicaid has headed in the right direction. But make no mistake – there is plenty of room for improvement.

As Mr. Andy Slavitt and Dr. Gail Wilensky – former Administrators of the Medicare and Medicaid programs – recently proposed in a JAMA article, it would be a worthwhile effort to initiate a 12-month bipartisan review process of Medicaid that focuses on long-term reforms to improve care and reduce costs. Given the wildly diverse views on how to change the program, I believe this approach is our best bet.

Mr. Slavitt and Dr. Wilensky have also outlined several viable improvements that may very well transform Medicaid into a well-oiled machine that is responsive to today’s realities. Here are a few:

Improving Medicaid financing. Currently, too much funding comes from large supplemental pools that go to states. These pools decrease accountability because they are allocated without regard to patient care or even the number of people treated. Any additional funds from reducing these pools should be transferred into the base rate physicians and hospitals are paid for seeing Medicaid patients.

Making Medicaid a more outcomes-based program. Medicaid could be altered to focus on outcomes, as Medicare and commercial programs are aiming to do. Metrics such as the early diagnosis of illness, incidence of low-birth-weight infants, maternal mortality, and the efficiency of care delivered could form the basis of such measures. Although there has been some recent progress identifying a core set of measures for children and adults, a scorecard on a core set of metrics would have to be developed for this purpose.

Coordinating programs for dual-eligible beneficiaries (people who qualify for both Medicaid and Medicare). Seeing as the dual-eligible population is the most costly segment of Medicaid, they stand to benefit greatly from care coordination commonly used in the private sector. Efforts to increase coordination between Medicare and Medicaid would benefit from the federal government sharing more of any resulting savings with the states than it has historically.

Reducing administrative burden on states and allowing for more rapid innovation. Medicaid is a highly flexible program, with a variety of different approaches designed to serve the frail elderly, provide substance abuse treatment, create innovative payment approaches, and capitalize on mobile technology. States should have the ability to innovate more rapidly through thoughtful reform of the waiver process and the process of submitting State Plan Amendments, as Ms. Seema Verma – the current Centers for Medicare & Medicaid Services administrator – has proposed. However, we must also ensure that federal tax dollars are being used to improve the health of target populations, that the results of innovations are measured, and that best practices can be spread between states.

As you can see, Congress has a real opportunity to explore innovative ways to make Medicaid as efficient as possible without diminishing access or quality of care for those who rely on Medicaid for their health care. Managed Care Organizations like L.A. Care have a strong track record of working with states on cost reduction and quality improvement programs – and stand ready to work with Congress to craft solutions that ensure the long-term solvency of the program.

The big question now is: how will we move forward?

John Baackes is CEO of L.A. Care Health Plan, the largest publicly- operated health plan in the U.S.