Spending Growth for the Duals David Grabowski Department of Health Care Policy Harvard Medical School July 21, 2015
Medicare 39 Million Dual Eligibles 10 Million Medicaid 57 Million Total Medicare Beneficiaries, 2010: 49 million Total Medicaid Beneficiaries, 2010: 67 million SOURCE: MedPAC, 2015 Data Book
SOURCE: MedPAC, 2015 Data Book
Spending per Beneficiary: Duals vs Non-Duals $20,000 $18,000 $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 Duals Medicare Non-Duals Medicare Duals Medicaid Duals Non-Medicaid 2007 2008 2009 2010 SOURCE: MedPAC, 2015 Data Book
Why are the Duals different? Duals more likely to have chronic illness, ADL needs, mental illness and less likely to have financial and social resources Fragmentation in Medicare and Medicaid coverage for Duals creates cost shifting across the two programs
Medicaid to Medicare: Hospitalizations of Duals from LTC Settings Medicaid does not share in savings from prevented hospitalized and thus does not incent LTC providers to invest in infrastructure to prevent avoidable hospitalizations In 2005, $2.4 billion spent on potentially avoidable hospitalizations of duals from LTC settings (Walsh et al., 2011 CMS Final Report)
Medicare to Medicaid: Transition of Duals from SNF to Long-Stay Nursing Home Residence Medicare does not share in savings from prevented transition to long-stay nursing home status and thus does not incent SNFs to invest in infrastructure to encourage community discharge After accounting for patient acuity and NH quality, Duals 12% more likely to transition to long-stay status than Medicare-only beneficiaries (Rahman et al., 2014 MCRR)
Integration of Medicare & Medicaid Potential for more efficient use of resources, with both programs sharing in costs and savings Investment in care coordination across Medicare and Medicaid settings (e.g., case management) Grabowski, 2007, Milbank Q
Early Integrated Duals Programs Program of All-inclusive Care for the Elderly (PACE) Massachusetts Senior Care Options Minnesota Senior Health Options (MSHO) Wisconsin Partnership Program
Early Evidence Relative to control group, rigorous evaluations of PACE and MSHO have shown better/stable health outcomes and access to care but higher costs Selective enrollment found on both the demand and supply sides Expenditures Relative to Control Group 100% 80% 60% 40% 20% 0% -20% -40% -60% PACE Abt Medicare PACE MPR MSHO Comm Medicaid MSHO NH
ACA Integrated Care Demos 12 states (CA, CO, IL, MA, MI, MN, NY, OH, SC, TX, VA, WA) have gained CMS approval to introduce new models to coordinate Medicare and Medicaid services for dual eligibles Variation across states in proposed models but mix of payment and delivery level reforms
State programs vary in Financial models: capitated versus managed FFS Delivery models: care management, medical homes, care coordination services Populations: all full duals versus subset Scope: statewide versus focused regions Enrollment: passive versus active
One state s program.. Ohio s MyCare Demonstration Target Population Full benefit duals aged 18+ Delivery innovations Payment innovations Integrated Care Delivery System Plans will offer care management services to coordinate medical, behavioral health, LTSS, and social needs Capitation, with savings percentages and quality withholds Eligible beneficiaries 115,000 Geographic area Covered benefits Enrollment 29 counties in 7 regions All Medicare/Medicaid services except hospice Voluntary, followed by passive (automatic) enrollment
Ohio MyCare Beneficiaries Enrolled For Both Medicare and Medicaid Benefits 67,993 Passive Medicaid Enrollment 5,207 8,965 13,954 14,540 14,748 14,957 15,844 16,081 May June July Aug. Sept. Oct. Nov. Dec. Jan. Voluntary Opt-in Medicare Enrollment Passive Medicare Enrollment Source: Kaiser Family Foundation
Final Question Will the integrated care demonstrations lower the level or the growth in spending?
Case of the Medicare SNF PPS $25 $20 Billions $15 $10 PPS $5 $0 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005