How Medicaid ACOs can pave the way for population health management

Accountable care organizations (ACOs) and similar models are a prime opportunity for states to bridge their population health and payment reform goals, according to the Milbank Memorial Fund's new issue brief, which offers strategies to promote Medicaid ACOs.

Although policymakers understand that meaningful population health management must address socioeconomic factors, the brief states, reforms are not feasible under fee-for-service payment models.

However, the ACO model, which many states have already identified as a way to keep down costs within their Medicaid programs, offers numerous opportunities to address social health determinants, according to the brief. Medicaid ACO beneficiaries in particular will benefit from the model because they are more likely to have worse health outcomes and more complex socioeconomic needs.

States that have expanded Medicaid eligibility under the Affordable Care Act particularly stand to benefit from providing incentives for population health improvement. For example, pre-expansion, children and pregnant women often left the program after aging out or giving birth. Post-expansion, the brief noted, many more beneficiaries will remain within the program.

A number of Medicaid ACOs use models based on the Medicare Shared Savings Program, which provides incentives for saving through short-term health improvements among high-cost, high-need patients. In contrast, outcomes-based payment models provide incentives for broader population health.

To implement such outcomes-based payment models, the brief suggests states take the following steps: 

  • Establish ACOs with geographical boundaries for simpler care coordination
  • Establish population health-centered governance standards for ACOs
  • Determine existing population health needs by analyzing existing data

A report from the Commonwealth Fund last week indicated that Medicaid ACOs in Minnesota, Colorado and Oregon have shown promising results, meeting their goals of generating long-term savings. For example, Colorado, which established a Medicaid ACO in 2011, has saved up to $33 million over a three-year period, FierceHealthPayer reported.

To learn more:
- here's the issue brief (.pdf)

 

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