In Oklahoma, a managed care pilot program saves big money on special needs patients
Can states save money by treating special needs patients in a managed care setting rather than a traditional fee-for-service program?
The answer is a resounding yes, according to results of a project undertaken in Oklahoma that showed claims savings of about 15%.
The Lawrenceville, NJ-based Center for Health Care Strategies (CHCS) provided a grant to Schaller Anderson Inc. of Phoenix to enable the health care management firm to work with the Oklahoma Health Care Authority and Heartland Health Plan of Oklahoma in assessing services provided to aged, blind, and disabled (ABD) patients before and after enrollment in Heartland Health Plan.
In July 1999, the Oklahoma Health Care Authority began to enroll ABD members in managed care through several organizations, including Heartland, which is owned by the University of Oklahoma and serves more than 110,000 Medicaid-only members in Oklahoma City and Tulsa. The study followed slightly more than 500 people who selected Heartland to be their managed care plan.
Heartland CEO Sally Venator tells State Health Watch that enrollment of the ABD program in the plan accounted for claims savings of approximately 15% over what was spent caring for them in the traditional Medicaid fee-for-service program during the 12 months before their Heartland enrollment. And when the 10 individuals with the highest medical claims costs were removed from the analysis, the managed care savings increased to 31%.
Perhaps the greatest proof of the success of the experiment, Ms. Venator says, is that advocacy groups for ABD patients now would be the first to loudly protest attempts to remove them from managed care.
"They are believers," Ms. Venator says. "We are doing what we said we would do with case management. The bottom line is that helping people coordinate their care is the best thing we can bring to the program. Otherwise, they are on their own. It’s nice to know that we can save money, but what’s most exciting is that the members perceive that their overall health status has improved."
The Schaller Anderson fiscal analysis shows the 10 most costly individuals in the study group represented less than 2% of the individuals in the group, yet accounted for 25% of all the fee-for-service group’s medical claims. While most in the ABD population had lower medical claims costs under managed care, total medical claims costs for the 10 most costly individuals were actually higher under managed care.
Why? Because of their complex medical needs and the fact that payment for their care in the managed care environment was not restricted to certain established limits, such as payment for only two physician visits per month, as it had been under fee-for-service. The overall savings in the pilot were realized even though the paid benefits available in managed care were more comprehensive than under fee-for-service.
Results of focus-group sessions with advocacy organizations representing the patients indicated that access to care and continuity of care were greatly with Heartland. Prior to enrollment in managed care, the advocates said, "creativity" was required to access some fee-for-service services. They said that while patients encountered many knowledgeable, caring providers, they often had to pursue alternative avenues to obtain necessary services. Under fee-for-service, advocates maintain, patients waited longer for appointments, traveled further, and sought care from any provider rather than from specialists. After enrolling with Heartland, advocates expressed relief that the plan provided a full spectrum of services and sought to ensure access and continuity of care through its enhanced provider network development efforts.
The focus groups also highlighted areas they say still need to be worked on, including additional education for providers and their office personnel, lack of sufficient dental providers, and payment rate issues.
The CHCS report concluded: "Results of this study confirm that with appropriate levels of care and management, the special needs/aged, blind, disabled populations can be effectively, efficiently, and economically served in a managed care environment. . . . Members felt their health status had improved since enrollment in Heartland and provider satisfaction also showed improvement."
Ms. Venator says Heartland’s effort started relatively smoothly because of focused attempts to eliminate patient and advocacy group anxiety about the change.
"We had a lot of meetings in which we were there to listen to their concerns," she says. "The concept that choice will be limited and patients may have to change providers can always be a concern. But we had a good level of success in a 120-day transition period."
One significant improvement, she says, was the involvement of primary care providers into the service mix. Often, ABD patients are tied closely to specialists and don’t have anyone looking out for their general health care. Bringing in primary care providers meant a new access to services. For the doctors, it opened up a market segment they had never seen and added new patients to their panel rosters. Ms. Venator says the ABD patients were encouraged to obtain primary care physician evaluations and most did, so many unmet medical needs were identified.
"It’s been interesting to see and hear the comments from network providers seeing complex cases for primary care for the first time," she says.
The Heartland care coordinators took a broad view of their role, dealing with issues such as transportation, social services, and follow-up in addition to more traditional medical care services. According to Ms. Venator, when Heartland hits needs not within its area of responsibility, the health plan has resources it can refer patients to and remains involved to be sure that the needs are met.
The experience has yielded information about some potential downsides to balance the great success. Ms. Venator says the program can be hard for primary care physicians (PCPs) because they are not given an option of whether to participate. She says some doctors managed to opt out of serving the ABD population by controlling their panel size, and the rest needed to make significant adjustments because members of this population are not usually seen in PCP offices.
"It’s more than doorways and accessible bathrooms," she explains. "These patients generally need two to three times more time in the office than other patients. To help alleviate that situation, the doctors get a higher capitation fee for this group."
Specialists gained more time through use of PCPs by the patients. And if patients needed to stay with a specialist who was not part of Heartland, the plan gave the specialist a single patient contract to facilitate continuity of care.
Ms. Venator says the ABD patients also have a lot of behavioral health issues, often as their primary diagnosis. They can be disruptive in physician offices. "We tried to be sure none of our physicians and office staffs were caught off-guard. We gave them some strategies they could use."
Heartland experienced problems, she says, because the program has been underfunded and the university had to absorb losses. "Working with this population was a challenge for commercial plans because they were pushed beyond what they were willing to accept as losses. It’s still a problem. There’s also a problem as new, very expensive drugs for this population come on the market."
Spell out contract terms
Jennifer Goodman, manager of Medicare and Medicaid business development for Schaller Anderson, tells State Health Watch that planning is the key to success. Also important is a carefully and clearly worded contract.
"By putting details in the contract, we could ensure that our network was appropriate," she says.
There also is an obvious need for dedicated care management. The state mandated that an exceptional-needs coordinator be identified for each enrolled patient and be in touch with the patient at least monthly.
For other plans wanting to take on the ABD population, Ms. Venator says it’s important to take the time to assess member needs, something that’s not easy to do, and realize that a lot of unmet needs will be uncovered as a result of the fee-for-service benefit design. "The first six-month expense will be huge," she counsels. "We’ve seen some people go directly from the PCP office to the hospital."
It’s also important, she says, to have people with the right skills do outreach and care management. Heartland uses registered nurses with experience with the disabled, along with a corps of specialized social workers. They also have behavioral health care managers to coordinate between behavioral and medical needs.
Realize that things that work with other populations won’t work with this one, Ms. Venator says, and be candid in providing information to providers. "It takes creative thinking to succeed in this arena. There’s a certain element of the population that is totally noncompliant and won’t address the very serious health issues that they have."
Ms. Goldman talks about the need to take general concepts and apply them to local situations. Rural areas have a harder time matching clients to providers than do urban areas, she says. "You can’t take a cookbook approach. But any plan can be successful if they understand Medicaid and this population and have knowledgeable people involved. I can’t speak highly enough about this program. We didn’t cut anything. We actually increased services. We’re not underutilizing. We’re trying to tell all the states that this is a way that they can save money."
[The CHCS report is available for download through http://www.chcs.org. Contact Ms. Venator at (405) 552-6500 and Ms. Goldman at (602) 659-2096.]
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