Bending the cost curve on high-risk patients

When Jeremie Seals connected with the not-for-profit health plan CareOregon in 2011, he had been diagnosed with congestive heart failure and was deemed terminally ill. He was constantly visiting the emergency room, living out of his car, and his feet hurt from nerve pain.

The cost to treat Seals and other high-risk individuals took a toll on Portland-based CareOregon's bottom line, where just 10% of the members account for over half the plan's spending. It had to find a new way to reduce costs for those high-risk members without compromising care at a time when the state was dealing with huge budget shortfalls and warning of drastic Medicaid rate cuts.

CareOregon launched its health resilience program to break down the many barriers to care experienced by its high-risk Medicaid members, whether it be housing, food or transportation. Almost a third of patients in the program have unstable housing. Through the program, patients are paired with a specialist who helps address issues involving social determinants of health. For Seals, that meant finding an adult foster-care family with whom he was able to stay for more than three years until he died comfortably at home in January 2017. Having stable housing and a support system helped slash Seals' ER visits from 15 in 2011 to just four the year after—dramatically reducing costs for the plan.

By meeting patients out in the community and in the home, health resilience specialists "bring the real story of what's going on in this person's life back to primary care, so (the doctors) know what the barriers are and can take those into account when they are developing a care plan for the individual," said Rebecca Ramsay, executive director of population health partnerships at CareOregon.

CareOregon now embeds 30 health resilience specialists across 26 clinics. The specialists each serve between 60 and 75 patients a year. By boosting primary-care visits and reducing unnecessary emergency room visits and hospitalizations, the program has generated $1.65 million in annual savings, according to a study by the Center for Outcomes Research & Education at Providence Health & Services.

CareOregon is not alone in its quest to come up with innovative ways to mitigate the costs of high-risk patients and make the dollar go farther as cash-strapped states whittle down Medicaid budgets and federal funding faces an uncertain future. Further, Medicare Advantage rates remain flat, making cost efficiency in managing those patients even more necessary for health plans.

"That's mission No. 1," said John Gorman, a former CMS official who now consults with government-sponsored health plans. Particularly with a "black cloud" handing over Medicaid and the Affordable Care Act's individual insurance market, he said plans are now thinking, "we may not know what enrollment will look like, but we sure have to manage these higher-cost members."

It's well-known that a just a small group of risky members makes up the lion's share of total costs in the U.S. healthcare system. In Medicaid alone, the most expensive 5% of beneficiaries accounted for roughly 50% of all program spending, according to a 2015 Government Accountability Office study. And while nearly all plans have some kind of program aimed at managing high-risk patients, not all of them are able to successfully reduce costs. Plans with effective patient care-management programs realize it takes more than just a follow-up telephone call, and instead deploy a "high-touch, labor-intensive model" where care teams meet patients in settings other than the hospital or clinic, Gorman said.

That's exactly the approach that Chicago's Cook County Health and Hospitals System's medical plan takes. Serving only Medicaid members, CountyCare relies on a "face-to-face, elbow-to-elbow" strategy, explained Dr. Jay Shannon, the system's CEO.

About 3% of the plan's members are categorized as high-risk and make up 46% of total costs. High-risk members are pinpointed by way of a health risk assessment and through claims data. Most are cycling through multiple emergency departments or pharmacies and are not engaged in a care plan.

CountyCare deploys care coordinators who work out in the field with the patient and the care team to identify goals, desired outcomes and tasks that a patient may complete, said Steven Glass, CountyCare's executive director of managed care. Because behavioral health diagnoses are one of the top reasons its patients end up in the ER, the plan also partnered with several local behavioral healthcare providers last year to ensure patients see a mental health provider or substance use specialist within 48 to 72 hours of referral.

Partnering with healthcare providers is key to creating patient buy-in, said Christopher Stanley, director of the healthcare practice at consulting firm Navigant. "Many health plans have realized that the trust factor with health plans and patients is not particularly strong," he said.

CountyCare is also set to launch two programs this year that aim to help members facing housing and food insecurity. CountyCare estimates that a fifth of its members are homeless and 17% find it difficult to keep food in the pantry by the end of the month. So the plan is partnering with Housing Forward, an Illinois provider of supportive housing services, to help homeless members find stable housing. It also is launching a program where care coordinators are able to bring boxes of shelf-stable food to plan members at their discretion, in partnership with another provider. Patients who are discharged after an inpatient stay will be eligible for up to two weeks of home-delivered meals.

Like CountyCare, more health plans are beginning to address patients' nonclinical social determinants of health, like housing or meals, which are critical in the Medicaid and Medicare Advantage populations, said Rachel Sokol, a practice manager at consultancy the Advisory Board Co.

"Everyone is focused on it from a one-off perspective," Sokol said, but "what's innovative is when organizations start to contract with some of these community organizations, using a local housing facility to do outreach . . . or using meal delivery as a covered service."

Before Commonwealth Care Alliance addresses patient's medical issues, it tackles social determinants of health, then mental health conditions, said Christopher Palmieri, the Boston-based health plan's CEO. That pecking order is necessary because for someone who is facing homelessness, "having a warm place to sleep or hot meal are more important than having your diabetes managed." Moreover, a patient with a severe mental illness will have a tough time complying with a care plan.

Commonwealth Care Alliance serves 13,000 dually eligible members under a Medicare-Medicaid program called One Care. A third of the program's members account for 70% of the costs. The members have complex needs: Nearly three quarters of them have a household income below $20,000, and 7% are homeless. About 70% have a serious mental illness, and 81% have two or more chronic conditions.

Patients are put at the center of their care and surrounded by teams including doctors, nurses and social workers. The member is "involved in their care planning, what type of care they get, what setting they prefer, who they want to work with, whether they prefer to get care in the home or in a traditional office or clinic-based setting," Palmieri said. The approach has led to a significant return on investment: A December 2016 study of 4,500 of One Care enrollees found that members enrolled for a year had 7.5% fewer hospital admissions and 6.4% fewer ER visits than in the 12 months prior to enrollment.

Different populations require different interventions, Navigant's Stanley said. What works for controlling spending among Medicaid members likely won't be effective for a Medicare Advantage population, he said. While Medicaid members tend to face barriers related to social determinants, Medicare Advantage members typically have several comorbid conditions.

Albuquerque-based integrated delivery system Presbyterian Healthcare Services launched its Complete Care program in 2015 to prevent catastrophic medical problems among seriously ill Medicare Advantage members who are in the last few years of their lives.

Complete Care includes 500 seniors, or 5% of the plan's Medicare Advantage population, which Presbyterian zeroed in on using clinical data and predictive modeling. The small group accounts for 64% of the total costs of the Medicare Advantage program, according to Brandon Fryar, the health plan's president.

Presbyterian provides patients in the program with long-term home-based care that better enables clinicians to monitor health and intervene quickly if a medical issue arises. That way, patients don't end up making frequent trips to the ER and racking up large medical bills.

For example, a nurse who visits the home of an elderly patient every day may notice that the patient seems wobblier on her feet than usual. The nurse can then adjust the patient's medications and nutrition plan, pre-empting that patient from falling, breaking her hip and having to undergo surgery, said Dr. Jason Mitchell, Presbyterian's chief medical officer.

"By having this intensive team pointed at the right population and providing those services in advance, you really save the health plan a lot of money, you save the patient a lot of money, and you give much better care," Mitchell said.

In the first year of the program, Medicare Advantage members in the Complete Care program had 50% fewer hospitalizations and readmissions compared to what Presbyterian predicted. Costs for the Medicare Advantage HMO also decreased by 21.4% for skilled-nursing facilities and 10.3% for inpatient rehabilitation.

"We've been able to operate successfully in this Medicaid and Medicare payment environment because we've been so efficient in managing the cost of care," Fryar said.

Experts say cost efficiency will become more important as state and federal funds are reduced. Legislators in several states, including Illinois and Oregon, are considering slashing Medicaid funds to plug gaps in state budgets. Federal spending is also likely to take a hit. The House-approved American Health Care Act would trim spending on Medicaid by $800 billion over 10 years; the Trump administration's proposed fiscal 2018 budget seeks another $610 billion in cuts over 10 years.

"We don't know where the AHCA conversation is going to land and when, but we know that the likely future of Medicaid will be continued tightening of the dollars," said Cook County's Shannon.

CareOregon's Ramsay said the health plan is in a position very similar to 2011 when it launched its health resilience program for high-risk patients. A recent Medicaid waiver request for additional funding wasn't approved, and Ramsay said the plan is likely to face additional Medicaid rate cuts.

"There's no cost-sharing with our patients, and we don't have a commercial line of business to subsidize the Medicaid plan in times of distress," Ramsey said. "So we've got to do everything we can to keep them out of the highest-cost environments."