In New Jersey, Medicaid covers one in five residents and accounts for about 20 percent of the state’s budget. We know our state needs to explore innovations to contain costs while also improving care for beneficiaries. At the Quality Institute, our Medicaid 2.0 initiative, with support from The Nicholson Foundation, is working to create a new framework for the future of New Jersey’s Medicaid program.

Part of our work requires us to explore innovations in other states that are aggressively experimenting with Medicaid. What can we learn from what is working — or not working? I joined Matt D’Oria, Chief Transformation Officer leading Medicaid 2.0, and Program Manager Crystal McDonald as we traveled to examine innovations in three other states: Ohio, Massachusetts and Connecticut. Matt has prepared the following report with some of our key observations.

Ohio
A storm kept us grounded in Newark Airport so our communications with Ohio experts took place on Skype and over the phone, though our counterparts at The Nicholson Foundation were able to make it to the Buckeye State. Ohio is a lesson in policy strategy.  Prior to his election, Ohio Governor John Kasich pulled together a small brain trust of health care and budget experts to develop a strategy for reforming Medicaid. After he was elected in 2011, this brain trust became the Office of Health Care Transformation (OHT) and was given authority over all Medicaid and related health care programs and spending.  With the active support of the Governor, the OHT was able to implement multiple initiatives: patient-centered homes, bundled payments for episodes of care, and community health workers to support patients with chronic illness.

The Ohio approach to managed care contracting encourages health plans to stay and invest for the long term.  The state uses base seven-year contracts that are updated biannually for new rates and other program changes.

Key Observations: The Medicaid program in Ohio has an elevated position in state government and a respected role driving reforms. We found that providers who may not agree with every decision made nonetheless had respect for the Medicaid leadership in the state. Building trust between government and health care providers is critical to successful innovation.

Massachusetts

We drove north and knew we were in Massachusetts when we saw lobster rolls being sold at McDonald’s. In Massachusetts, one innovation we found interesting was the MassHealth (Medicaid) approach to Accountable Care Organizations (ACO).  As part of the state’s reform efforts, state health leaders are proposing several ACO models: an at risk standalone paid directly by the state, part of an HMO, or a standalone ACO that partners with an HMO. Medicaid consumers will select which model they want. That means these mostly large hospital-based ACOs will be in direct competition with insurers.

To encourage consumers to select these ACO options, MassHealth is proposing to limit Medicaid services to those who do not enroll in one of the ACOs.  Those who chose not to enroll in ACOs would lose benefits such as chiropractic services and optometry.

Key Observations: Innovation can take many forms and maybe too many. While a very interesting approach, we need to be mindful of offering an abundance of options. More options may mean more confusion and more resources to manage them. On the quality front, the right incentives can encourage beneficiaries to join innovative care models.

 Connecticut

We know why Hartford is called the Insurance Capital of the World. From our window at Medicaid’s home office in the Department of Social Services, we could see signs for United Health Care, Aetna and, of course, The Hartford. We thought the visibility of the insurance industry might thwart innovations that could hurt insurance companies. Instead, we learned that the state has moved away from paying full risk capitation to private insurance companies and instead uses some of these insurers as administrative services organizations (ASO). There is an ASO for medical, behavioral health, transportation and dental. We saw that Connecticut has made substantial progress in giving Medicaid beneficiaries easy access to dental care. People with Medicaid insurance in Connecticut rarely wait for dental appointments, and they are not, as is often the case, relegated to dental school clinics. We visited Community Health Center Inc., an FQHC that has 203 sites. We saw first-rate electronic medical records and other technology and a wide scope of services. In Connecticut, physicians treating patients through medical homes or FQHCs receive a monthly fee for care coordination and are offered savings if the total cost of care is lower than expected.

Key Take-away: The state prioritizes its relationship with practitioners as evidenced by the reduced administrative burden and consequently increased participation in Medicaid.  The state worked aggressively with these providers to say, “We have the same goals. How can we do this together?” Walking the walk, the state backed up its words with selective rate increases.

We know that what works in one state will not necessarily work in another. New Jersey must explore the innovations most likely to succeed here. Our work with Medicaid 2.0 is ongoing and we continue to seek input from doctors, nurses, beneficiaries, hospitals, payers, insurers and other stakeholders.  Please consider joining us for the Medicaid 2.0 Summits planned for Oct. 6 and October 14. We will keep you up-to-date on our work and hope to hear your thoughts of how we can reduce Medicaid costs while also making the program work better for beneficiaries.