Illinois Achieves Huge Medicaid Savings

Care management program drives increasing net savings over four years

McKesson, according to its website, and the Illinois Department of Healthcare and Family Services (HFS) have announced $262 million in net savings during the fourth year of Your Healthcare Plus.

Administered by McKesson, the Illinois Medicaid care management program improves the health and wellness of more than 280,000 Medicaid beneficiaries throughout the state by providing personalized telephonic and community-based registered nurse services. HFS and McKesson launched the multi-disciplinary care management program in July 2006 to help disabled adult Illinois Medicaid beneficiaries, and children with asthma and their caregivers, who are part of the Family Health Medicaid program.

This is part of a growing movement toward managed care in state Medicaid programs as state's grapple with increasing health care costs and decreasing tax revenue resulting from the economic downturn that cobmined have created huge Medicaid program deficits in states across the nation.

By helping beneficiaries better control chronic diseases, the Illionis Medicaid managed care program, called Your Healthcare Plus, saved the state $262 million during year four (July 2009-June 2010). Net savings for years one through four is:

Year One Net savings

$34 million

Year Two Net Savings

$104 million

Year Three Net Savings

$169 million

Year Four Net Savings

$262 million

With more than $4.4 billion of actual claims costs during the four years, Your Healthcare Plus generated a total net savings of $569 million.

“Your Healthcare Plus is a tremendously successful care management program. Our nurse and healthcare staff use their expertise and knowledge of the community to guide participants to the most appropriate health resources. This includes talking with our telephonic or community-based staff, or taking advantage of community resources. By utilizing available resources, Medicaid beneficiaries better control acute and chronic illnesses, and drive cost savings for the state,” said Emad Rizk, M.D., president, McKesson Health Solutions.

Clinical indicators improve: baseline to year four

Through the program, McKesson’s care coordination services – the ability to help participants find and use the most appropriate resources – ensure Medicaid beneficiaries access the care needed to improve clinical indicators. Improving these indicators can directly affect a participant’s overall health and wellness.

While the cost savings are important, the true news here is the results McKesson gained though improved Medicaid enrollee health outcomes as illustrated below

Across all managed disease states, the program reported an average 15% improvement in influenza vaccinations from baseline (July 2005-June 2006) to year four. Your Healthcare Plus care coordination supported improvement, baseline to year four, for participants with heart failure, COPD, diabetes, coronary artery disease and asthma:

For participants with heart failure and/or COPD:

• * 15% improvement in rate of beta blocker medication use in heart failure
• * 41% improvement in spirometry testing in COPD
• * 21% improvement in reported rate of vaccination for pneumococcal infections (pneumonia) in heart failure and COPD

For participants with diabetes:

• * 36% improvement in retinal eye examinations
• * 11% improvement in testing for kidney damage
• * 10% improvement in aspirin use
• * 11% improvement in statin (cholesterol lowering medication)
• * 9% improvement in cholesterol testing

For participants with coronary artery disease:

• * 9% improvement in statin (cholesterol lowering medication)
• * 8% improvement in cholesterol testing
• * 26% improvement in reported rate of vaccination for pneumococcal infections (pneumonia)

For participants with asthma:

• * 20% improvement of use of written action plans for persons with asthma

More Perspective

In 2005, as federal and state budget pressures challenge Medicaid programs, a number of states began to reinvigorate their efforts in managing care of Medicaid beneficiaries, particularly in the area of long-term care. Illinois is just one example. A central goal of MMLTC, according to a study by the American Association of Retired Persons (AARP) says that reducing hospital and nursing home care in favor of more community-based care, is realistic.

With state and federal efforts to contain Medicaid costs and provide more community-based long-term care to growing numbers of people of all ages, pressure is building for alternatives to traditional fee-for-service, case managed or consumer-directed long-term care, which some view as unsustainable. Medicaid managed long-term care (MMLTC) is defined here as an arrangement in which the state Medicaid program makes a single contractor responsible for a range of long-term care services and pays the contractor a set monthly fee, called capitation, regardless of the amount of care delivered.

The financial risk assumed by the contractor is one of the features that distinguishes MMLTC from the fee-for-service programs such as the HCBS waiver programs. In MMLTC, if care averaged across all members costs more to deliver than capitated payment amounts, the MMLTC contractor loses money; if it costs less, the contractor makes money.