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Cost of Care

North Carolina Medicaid Program Saved Close To A Billion

Community Care of North Carolina, the state Medicaid program that assigns patients to a ‘medical home’, has saved the state close to a billion dollars over a four year period, according to analysts who examined four years of state Medicaid cost data.

About 1.3 million people in North Carolina are enrolled in Medicaid, the state and federally funded program for low-income families and people with disabilities.  Beginning in 2001, most of those people have been assigned to a ‘medical home’, a clinic or doctor that coordinates patients’ care and follow-up.  Medicaid officials have long argued that this kind of patient care coordination prevents unnecessary clinic and hospital visits, and saves money over the long run. The analysts’ findings seem to punctuate that point.

Bob Cosway from the actuarial firm Milliman presented his analysis to lawmakers earlier this month, that show total savings of $984 million dollars between 2007 – 2010.

“It’s difficult to quantify savings in any kind of program, because you can’t witness what didn’t happen,” Cosway said. But Cosway said he’s confident in their analysis.

Cosway compared thousands of Medicaid patients enrolled in the medical home program with similar patients not enrolled in a medical home and examined their costs over time. In general, the per person cost decreased over the four year period for people in the program. The savings rate was most notable in children, who tend to cost less overall, and in adults without disabilities. Costs for patients defined as ‘aged, blind or disabled’ stayed relatively constant over time.

The results from the Milliman analysis matches the results of other studies said Pam Silberman, President of the North Carolina Institute of Public Health.  But what gets her excited is that medical homes improve the quality of care as well.

“All signs point to the idea that CCNC saves money,” Silberman said. “But the outcome data has shown that care is getting better and quality is getting better. And that was when the program was focused on people with complex health problems who need the most care management.”

About 80 percent (more than one million) NC Medicaid recipients are in enrolled in the medical home program, that includes children enrolled in Health Choice, the state’s health insurance plan for low-income children whose families are not eligible for Medicaid.

Medicaid patients enrolled in the medical home program can either choose, or be assigned, to a clinic or doctor. The North Carolina Medicaid program pays for care coordinators – usually registered nurses or social workers – to work with the doctors and the patients to help prevent patients from rotating in and out of the hospital.

Medical homes are now expanding into the commercial market, said Silberman. She says some state employees and some self-funded companies, such as GlaxoSmithKline, Kerr Drugs, and state employees in some counties are experimenting with placing their beneficiaries in medical homes.

“It’s a theory of managed care that better quality and less variation does save money,” Cosway said. “In other words, it’s not providing more to everyone that produces better results, it’s identifying – based on consensus and clinical evidence – the best way to treat a disease and do it consistently.”

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