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Hennepin Health saves money by housing, employing patients

A Minnesota health system has invested Medicaid money to house and help employ its patients and has saved money on medical care in the bargain.

Hennepin Health—an accountable care organization operated by Hennepin County, Minn.—saved more money from fewer emergency room visits and hospitalizations among newly housed patients than it paid for their housing.

Hennepin Health was formed in 2012 to manage the medical care and costs of poor adults who gained insurance through Minnesota's early expansion of Medicaid under Obamacare. Visits to the emergency room dropped by roughly 9% during the first year, as less expensive outpatient visits increased 3% and the percentage of patients who got optimal care for diabetes, asthma and heart disease, though small, grew by 11%, 8% and 23%, respectively.

The results, published in the latest issue of the journal Health Affairs, are among those that point to some success for attempts to reward doctors and hospitals for performance on cost and quality.

But the efforts by Hennepin Health also underscore the complexity of that effort, as health systems increasingly seek ways to address complex social needs—housing, transportation, social support—alongside demands for physical and mental healthcare for Medicaid patients.

“Our healthcare delivery system is quite poorly constructed to meet the needs of the population,” said Ross Owen, the accountable care organization's deputy director.

To meet those needs, Hennepin Health is using the savings from its ACO to expand the reach of its services to increase medical care among the homeless; help with permanent housing and job placement; bolster its ability to coordinate care as patients leave the hospital and in the community; and significantly increase access to behavioral health and substance abuse treatment.

Hennepin Health has so far housed 200 patients with complex medical needs or a history of repeated hospitalizations. The strategy is one being pursued or tested elsewhere, such as New York and Illinois.

The number of hospital stays per member, per month dropped 29% and the cost of the hospitalizations fell 72% among more than 100 patients for whom Hennepin Health had at least three months of data before and after finding a home. Emergency room visits and costs plunged 55% and 52%, respectively. Ross said the savings exceeds patients' housing costs.

Nurses paid for by Hennepin Health also work in a homeless shelter to treat patients and the ACO delivers prescriptions to shelters. The ACO also finances interim housing for patients who need somewhere to go after they leave the hospital.

Success elsewhere has been more elusive. Hennepin Health has struggled to improve access to follow up care for mentally ill patients leaving the hospital, he said. The ACO has invested $2.4 million of its savings into these efforts and others that have, among other things, increased access to psychiatric care and care coordination for behavioral health patients.

Despite the early success, it's too soon to say which of the many interventions underway do the most to improve health and lower costs for Medicaid patients, Owen said. Hennepin Health is working with researchers to try to identify what works best.

Follow Melanie Evans on Twitter: @MHmevans






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