Utah's Medicaid Overhaul Challenged as Deadlines Loom

Sep 11, 2012

The State Department of Health is moving forward on an overhaul of the Medicaid system despite opposition.  Utah’s new managed care contracts are designed to save the state money and are slated to go into effect in January, but some health advocates say the proposed contracts do not ensure quality care for patients.  And the state’s Inspector General says the contracts do not ensure proper oversight of Medicaid funds.  KUER’s Andrea Smardon reports.   

Brent James is the Chief Quality Officer at Intermountain Healthcare.  In his office in the KeyBank building in downtown Salt Lake, there is a small telescope that he uses to see the falcon nest in the neighboring building.   But James doesn’t have time to look at birds these days.  Instead, he’s training his eye on a problem. 

“I’m at a point in my career when I was hoping it would slow down, but instead it’s accelerating massively,” said James, “As a country, we really do face a problem relative to our finances.  When you look at the details of it, it’s frankly scary.  Two thirds of the problem is healthcare.  I would rather be part of the solution than part of the problem.”

James travels the country to talk about Intermountain’s approach to improving efficiencies in healthcare.   Intermountain has been implementing aspects of what’s called accountable care.  James says it’s like the managed care that was introduced in the nineties with the advent of Health Maintenance Organizations or HMO’s, where a fixed sum of payment is provided to care for a population of patients.  But James says the new idea of accountable care is better for two reasons.

“Rather than asking an insurance company to be accountable for the care, we’re asking care delivery groups – physicians really - to be accountable for the care,” James explained, “and in the last 20 years our data systems have improved massively.”

Intermountain began implementing accountable care 12 years ago in its diabetes clinic.  They kept reports on every patient that came in, and deployed nurses with evidence-based practice tools.  Any time a diabetic patient appeared, the nurse or doctor had a full summary of the care they had received, and had tools to advise them on next steps.  All the while, the clinic continued to collect and analyze the data.  Plus the physicians received some financial incentive for good health outcomes, rather than the number of tests or procedures ordered. 

“If I can manage your diabetes well enough,  you won’t need to go in the hospital,” said Brent, “If I avoid the hospital, I’ve just saved a lot of money,  and the reason I saved the money is because your health is better.”

"If I avoid the hospital, I've just saved a lot of money, and the reason I saved the money is because your health is better."

James says this approach was associated with massive improvements in diabetes outcomes.  In two years, the numbers of patients hospitalized with complex diabetes fell from 39 percent to 31 percent.  Mortality rates fell by 3 percentage points.  The efficiency of the physicians improved by 8 percent – which he says – was enough to pay for the extra nurses.  James says, he’s seen accountable care work, and it gives him hope that the healthcare crisis can be solved.

“It’s not just saving healthcare that we’re talking about.  In my more grandiose moments, I think that we’re saving the country.  This could turn around the budget of the United States.  This could help turn around the deficit spending that we all face.  This is the hope for the future in a very real sense,” James said.

Now the state of Utah is trying to implement what Intermountain has piloted on a large scale with Medicaid patients.   The legislature passed Senate Bill 180 in 2011, requiring the Department of Health to develop a proposal to change the fee structure for Medicaid providers in order to curb state spending.  As of January 1st, the state is set to pay Intermountain and three other Medicaid providers a capped payment per patient.  It’s up to the providers to figure out how to deliver care for less.  But some healthcare advocates say the state’s proposal doesn’t do enough to ensure quality standards across the board.  Judi Hillman is Executive Director of Utah Health Policy Project.  At a meeting last week with health advocates, providers, and state health officials, she expressed her disappointment with the health department’s proposal. 

“What’s frustrating is that we have the expertise in our healthcare delivery system to deliver care in this fashion,” said Hillman, “But we’re not tying it together in a way where we can compare the plans on quality and where that comparison is transparent to consumers.”

Hillman is concerned that there are not adequate mechanisms to track and report the quality of care provided.

"This is not accountable care by any stretch, and it's with great sadness and disappointment that I say that, because I think that accountable care is the way to go for Medicaid."

“This is not accountable care by any stretch, and it’s with great sadness and disappointment that I say that, because I think that accountable care is the way to go for Medicaid, and I think that it’s a way to satisfy our fiscal hawks, our leaders for true cost containment.  That was the way forward, and we’ve fallen off the path,” Hillman said.

Before the meeting, State Medicaid Director Michael Hales told KUER that the Health Department has been listening to public input throughout the process and will take UHPP’s comments under advisement.

“We’re very open to public participation, from clients, advocacy as well as providers, in terms of finding the most meaningful way to measure quality and to make sure we’re delivering the appropriate care to those who need it most,” Hales said.

But, Hales said, the department may not have time to make changes before the contract is finalized.  He plans to send the proposal to the federal government for approval by the end of this month.   The state’s Inspector General  is conducting an audit of the proposal, also due out later this month.  The office declined to comment because the audit is ongoing, but in an August memo to the Department of Health, Lee Wyckoff said he was concerned the contract lacks proper oversight of Medicaid funds and doesn’t make providers accountable for care standards. 

While the state finalizes its proposal, the state’s Medicaid providers are bracing for a big change.  Brent James

"Better care nearly always costs less if you set it up right. You don't achieve costs savings by withholding care, you achieve cost savings by improving care."

says it will be a challenge for all providers, but he believes if accountable care is done right, it can improve the quality of care. 

“Better care nearly always costs less if you set it up right.  You don’t achieve costs savings by withholding care, you achieve cost savings by improving care.”