While the Affordable Care Act (ACA) is a predominantly federally-funded and state-mandated program, potential changes to the ACA could bring a shift in power that gives back control to the states.
This change in power would give states greater flexibility to design different Medicaid benefit options and change the way Medicaid is delivered, making Medicaid expansion more attractive to states that rejected expansion it before. Why? Because, states would have greater freedom to create their own Medicaid benefits and program payment models.
However, providers will need to find innovative ways to care for Medicaid recipients and optimize what is likely to be reduced federal funding. Some states are already implementing alternative payment models that make providers accountable for the cost and quality of care. You can expect to see this in more states as the direction of power shifts.
These types of programs align well with the movement away from fee-for-service payment we’re seeing in Medicare and private payers today. These models incent providers to manage the cost and quality of care for a population. This means greater focus on prevention and wellness. Though, states will have to make their programs attractive to enlist physicians and health systems to participate.
In the near future, we can expect to see waivers that give Governors more control over the design of Medicaid’s benefits. We’ll also likely see states pursuing Medicaid waivers that test delivery system reform by aligning financial risk directly with healthcare providers.
Some states are already doing this and seeing results.
In 2012, Oregon received approval for a Medicaid waiver that would allow them to create a state-wide system of coordinated care providers that work together to care for Medicaid patients. As part of these efforts, Oregon launched the transformation center via a state innovation grant in 2013 to help identify, support and share innovation at the system, community and practice levels.
Oregon is seeing some interesting results. In fact, 30-day readmissions have improved by 33% since 2011. And, health transformation efforts have avoided costs of $1.3 billion since 2013 and are projected to save a total of $10.5 billion by 2022.
Providers will increasingly succeed in these markets by creating high-value networks that contract directly with their state to manage Medicaid patients.
The key is a budget-neutral, locally-led focus on improving your community’s health.