Once A Welfare Add-On, Medicaid Takes Charge In Reinventing Care

Medicaid Health Home Reducing Costs and Reliance on Emergency Department: Evidence From Iowa

BACKGROUND

The Affordable Care Act allowed an optional Medicaid State Plan benefit for states to establish Health Homes coordinating care for people who have chronic conditions. Differences in medical home program incentives and implementation styles are important to understand in evaluating effects on key outcomes such as cost and acute care. In Iowa, a Medicaid Health Home (MHH) program was developed targeting Medicaid members with multiple chronic conditions. Provider patient management payments were tied to the number of chronic conditions of MHH members.

OBJECTIVES

To assess the effects of an Iowa MHH program on total spending, emergency department (ED) utilization, and ED spending.

DATA

Claims data from January 2011 through December 2013; per member per month unit of analysis.

RESEARCH DESIGN

We use a difference-in-difference regression design comparing pre/post outcomes for MHH members to pre/post outcomes for Medicaid members not participating in the MHH. We include individual fixed effects and matched controls to minimize the potential for confounding. In addition, we include a series of administrative covariates to control for individual demographic and geographic variation.

RESULTS

Participation in the MHH program reduced spending by $132 per member per month. There is also evidence that the largest cost savings occur with a lag, as those in the program longer than a year showed the most savings. Members were less likely to visit the ED compared with traditional Medicaid recipients and ED spending was also lower for MHH members.

CONCLUSIONS

Participation in a MHH program led to fewer ED visits and lower overall spending among Medicaid recipients in Iowa.

Child Poverty and the Health Care System

The persistence of child poverty in the United States and the pervasive health consequences it engenders present unique challenges to the health care system. Human capital theory and empirical observation suggest that the increased disease burden experienced by poor children originates from social conditions that provide suboptimal educational, nutritional, environmental, and parental inputs to good health. Faced with the resultant excess rates of pediatric morbidity, the US health care system has developed a variety of compensatory strategies. In the first instance, Medicaid, the federal-state governmental finance system designed to assure health insurance coverage for poor children, has increased its eligibility thresholds and expanded its benefits to allow greater access to health services for this vulnerable population. A second arm of response involves a gradual reengineering of health care delivery at the practice level, including the dissemination of patient-centered medical homes, the use of team-based approaches to care, and the expansion of care management beyond the practice to reach deep into the community. Third is a series of recent experiments involving the federal government and state Medicaid programs that includes payment reforms of various kinds, enhanced reporting, concentration on high-risk populations, and intensive case management. Fourth, pediatric practices have begun to make use of specific tools that permit the identification and referral of children facing social stresses arising from poverty. Finally, constituencies within the health care system participate in enhanced advocacy efforts to raise awareness of poverty as a distinct threat to child health and to press for public policy responses such as minimum wage increases, expansion of tax credits, paid family leave, universal preschool education, and other priorities focused on child poverty.