As the national healthcare debate continues, what if instead of cutting Medicaid eligibility and capping spending, as the legislation approved by the House of Representatives would do, we were discussing innovations that would make the healthcare system more effective and affordable?
Ultimately, that's what policymakers in both parties should want and the American people need.
The opportunity is significant. Currently 74 million Americans—nearly 1 in 5 people—in our country receive coverage through Medicaid, accounting for $554 billion in state and federal funding. This includes 40% of our nation's children and two-thirds of people in nursing homes, reflecting the intergenerational impact of this critically important program. There are meaningful ways to reduce costs organically without dramatic budget cuts and coverage reductions. Many of these solutions are already in practice.
A holistic approach to care and focusing on the social determinants of health has been increasingly recognized as a critical component of health. Social, environmental and behavioral factors have been shown to contribute significantly more to a risk of early death than genetics or medical care. By understanding and addressing the specific challenges patients face we can help them achieve better health outcomes and, in turn, reduce healthcare costs.
For example, about 1 in every 8 U.S. households is food insecure, accounting for an estimated $160 billion in health-related costs ranging from anxiety and depression in children to diabetes and hypertension in adults. And yet, as a healthcare system we are still far more apt to treat the consequences of food insecurity and poor nutrition on health outcomes than to address and treat food insecurity in our patients. By raising awareness of hunger as a health issue, developing standards for screening and building strong social service partnerships, we can have an impact not only on health but also on healthcare costs.
Boston Medical Center, the largest safety-net hospital in New England, has been addressing the social determinants of health to provide better outcomes for decades. For example, we launched the first in-hospital prescription food pantry back in 2001, which allows our doctors to address food insecurity by prescribing a three-day emergency supply of food for the patient's household. The therapeutic food pantry, a partnership with the Greater Boston Food Bank, has since expanded to include a demonstration kitchen where we teach patients how to make healthy meals tailored to their medical needs. We've seen a growing number of hospitals adopt and customize this model.
A significant cost driver for the healthcare system is hospital readmissions. More than a decade ago caregivers at Boston Medical Center created Project RED, a model for discharging patients in a way that promotes patient safety and reduces readmissions. The simple solution was providing each patient with an individualized, easy-to-understand color-coded booklet on how to take care of themselves at home. The booklet includes information on medications and upcoming appointments; an illustrated description of the discharge diagnosis; and information on what to do if problems arise between hospital discharge and the first outpatient visit. A nurse or a pharmacist follow up with a phone call a few days after discharge to make sure the patient understands the plan.
The Project RED model has since been adopted throughout the country, with participating hospitals seeing an average 20% to 25% reduction in readmissions. It's an inexpensive solution that keeps costs down by keeping people healthy and out of the hospital.
Payment model innovations have also demonstrated early success in reining in healthcare spending. Massachusetts saw dramatic benefits in near-universal coverage as part of Massachusetts' 2006 reforms, and we are currently implementing an accountable care system that will shift Medicaid payment to shared savings and risk while holding providers responsible for quality and outcomes.
I have seen first-hand the impact of innovation and creativity in providing better health outcomes for patients while reducing overall costs. Today, our country—more specifically the U.S. Senate—has a historic opportunity to transform Medicaid and the healthcare system by expanding that kind of thinking. To miss that opportunity would be penny-wise and pound-foolish, likely driving costs higher and undercutting the health of the millions of Americans the program serves.
