Published by Joan Randell and Rachel Cahill on Health Affairs.

In early March 2017, the New Jersey Health Care Quality Institute (NJHCQI), a nonprofit quality improvement group, released Medicaid 2.0: Blueprint for the Future, a landmark plan to redesign and modernize New Jersey’s Medicaid program. A year in the making, the Blueprint resulted from a carefully designed process that brought together a wide variety of stakeholders from across New Jersey, including health care providers, health plan executives, hospital leaders, government officials, union representatives, academics, advocacy groups, and patients. The report—released against a backdrop of political uncertainty about the future of federal Medicaid funding, and in 2017, an election year in New Jersey—lays out a set of twenty-four recommendations to improve the quality, and reduce the cost, of the program.

The Nicholson Foundation conceived of and funded the Blueprint as part of a larger project to promote the efficient delivery of high-quality health services for Medicaid recipients in New Jersey. This aligns with our mission to address the complex needs of vulnerable populations in New Jersey’s urban and other underserved communities. Central to that mission is strengthening Medicaid, the health care financing and delivery system that serves the state’s safety-net population.

The process we used to develop the Blueprint shows that when state governments do not take the lead in fundamentally transforming their Medicaid programs, foundations can step up to support Medicaid modernization.

Medicaid’s Role In New Jersey

Medicaid now provides health insurance to nearly 1.8 million, or nearly one in five, New Jersey residents. It costs the state about $15 billion annually; the state’s share of Medicaid represents 20 percent of New Jersey’s total budget. Despite this investment, it is clear that the Medicaid program in New Jersey—as in many other states—often does not meet the needs of its recipients. Obstacles to access persist, care is fragmented, and capacity for treating the whole person (that is, for concurrently addressing physical, behavioral, and health-related social needs) is limited. Barring substantial change, the costs of the program will continue to grow without demonstrable improvements in health outcomes.

The Nicholson Foundation understood the need for change long before the 2016 election altered the political landscape and ushered in increased scrutiny of Medicaid in Washington, D.C., and in state capitals. Nearly seven years ago, we began looking at the quality and cost of medical services delivered to safety-net populations in New Jersey to understand how they could be improved.

The subsequent work of our grantees on service delivery reform, payment reform, and data and decision making, made important steps forward but considered only isolated pieces of the Medicaid puzzle. We realized that to achieve truly transformative systems reform, we would have to supplement our “piece of the puzzle” approach with a more comprehensive strategy.

We decided it was time to examine the entire puzzle.

The Medicaid 2.0 Project

Many states have launched Medicaid modernization efforts in recent years, as chronicled in Health Affairs (journal, Blog). Typically, governors have conceived, led, and funded these efforts because the growing cost of Medicaid tends to crowd out the rest of their policy agendas.

Although New Jersey’s Medicaid program faces problems similar to those of other states, New Jersey did not initiate a comprehensive reform process. With the administration of the incumbent governor (Republican Chris Christie) winding down, The Nicholson Foundation saw an opening to provide the next administration with a ready-to-roll, nonpartisan plan for a Medicaid overhaul.

First, we had to find the right partner to lead this effort. We chose the NJHCQI because it is respected by stakeholders across the state as an unbiased voice for improving health care.

Second, it was essential to gather information about other states’ Medicaid programs, their services and payment systems, and their efforts at comprehensive reform. The NJHCQI and The Nicholson Foundation made site visits to Ohio, Massachusetts, New York, and Connecticut. This was invaluable.

In Ohio, for example, we learned about the creation of the Ohio Office of Health Transformation in the Governor’s Office. The Office of Health Transformation oversees the many state agencies that affect, and are affected by, Medicaid. The Blueprint recommends a similar office for New Jersey that would control Medicaid spending and improve health outcomes by managing and coordinating the Medicaid portfolios of all relevant state agencies. These include the Departments of Human Services, Health, Children and Families, and Banking and Insurance, and some divisions within them (Medical Assistance and Health Services, Mental Health and Addiction Services, Developmental Disabilities, and Disability Services).

Third, in keeping with our collaborative modus operandi, we recognized the importance of hearing from many voices. The NJHCQI brought together 140 stakeholder organizations and individuals (see the Blueprint report’s appendix 4) who worked together in five focus areas: Access and Quality, Behavioral Health Integration, Eligibility and Enrollment, Purchasing Authority, and Value-Based Purchasing. Each had a designated “transformation team” of health care experts, which met over ten weeks to assess the problems in each of these areas and make the consensus recommendations that formed the Blueprint. Generous assistance was also provided by New Jersey’s Office of the Governor, the New Jersey Department of Health, and the New Jersey Department of Human Services, Division of Medical Assistance and Health Services.

Conclusion

When the dust settles from efforts to “repeal and replace” the Affordable Care Act, many states will need to make important changes in how they deliver Medicaid services. In states where government does not initiate a comprehensive reform process, foundations can step in, as The Nicholson Foundation has in New Jersey. This bottom-up rather than top-down approach is not only viable, but also may in fact be preferable. It brings together disparate actors, builds a strong consensus, and is less ideological or beholden to a single actor or interest than a top-down process might be.

We are cognizant that the Blueprint is just a plan and subject to changes. But as infrastructure experts might say, it is also “shovel ready”—rooted in evidence and grounded in consensus. The next several months will test whether the Blueprint’s recommendations will be able to weather any electoral storms and move into the implementation phase.

Our work does not end here. The Nicholson Foundation is committed to a second phase of advancing the Medicaid modernization process and implementing the Blueprint’s recommendations. We will work with the NJHCQI, the stakeholder community, and the next administration to turn these ideas into action.