4 ways to cut costs, boost outcomes for Medicaid enrollees

Medicaid on paper and a stethoscope

States that have successfully reduced costs and improved outcomes for expensive Medicaid enrollees have done so by targeting specific metrics such as emergency department utilization and readmissions, and designing interventions that incorporate social support and housing.

High-need, high cost Medicaid enrollees present a significant challenge for states, according to a new report from the National Governors Association, which draws on successful programs within 10 states and one territory that focus on specific metrics to improve utilization among Medicaid beneficiaries. Some of the key takeaways include:

  • Start simple: Focus on a few simple interrelated metrics that target a specific high-cost population. Measurements that focus on ED visits, coupled with outcome measurements, readmissions and outpatient visits within a certain time frame offer a broader of overall view of utilization and cost.
  • Measure ROI: Programs that target high utilizers should be able to demonstrate cost savings to ensure ongoing efforts to improve care and reduce costs are effective.
  • Gradually incorporate advanced metrics to measure outcomes: The initial goal of state programs should be to reduce high-cost services, often associated with ED visits or inpatient care. A secondary aim should be better management of chronic conditions and improved overall measured through more targeted metrics like patient satisfaction.
  • Account for social factors: High-need, high-cost individuals often require behavioral health services and drug or alcohol dependence treatment, and have prior interactions with state psychiatric facilities or jails. Designing a program that incorporates accounts for these services and prioritizes follow-up care can help steer patients away from high-cost care and improve overall quality of life. Given that many high-cost Medicaid beneficiaries are homeless, states that have incorporated housing initiatives have also reduced costly care services.

Just 5 percent of Medicaid’s enrollees make up nearly half of the program’s costs, which is why “high-cost claimants” are frequently identified as key factor in reducing healthcare costs. Previous reports indicate high-cost, high-need Medicaid beneficiaries could benefit from policy changes that make certain services--like palliative care and mental health--more easily accessible.

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