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In the never-ending quest for lowered health care costs, Medicaid gets a hand from some industrial engineers.

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By Jen Ferris

In the wake of repeated demands from the legislature to cut health care spending and increases in state spending on Medicaid, the group that manages most of North Carolina’s Medicaid patients announced a new initiative to cut medical costs.

Up until recently, Community Care of North Carolina president Allen Dobson said his organization – and most others in the health care industry – were making best guesses at what constituted patient care that was efficient and reduced overall costs. But at Tuesday’s CCNC annual Innovation Forum, held at NC State University, Dobson said he believes a new partnership with the university’s Industrial and Systems Engineering department will put an end to the guesswork.

CCNC head Allen Dobson. Photo courtesy CCNC

Working with CCNC, engineers from NC State will analyze scads of data to streamline the delivery of health care across CCNC’s statewide network.

CCNC is a not-for-profit statewide network of primary care practices that focuses on preventive measures and continuity of care. The network gets state money to coordinate and manage care for many of the state’s close to 1.8 million Medicaid patients.

“It’s about the right person, right time, right place,” Dobson said. “What is it we can do in health care to make a difference in which patients need something done at the right time?”

NC State’s ISE program offers students a certificate in health systems engineering, the science of analyzing and improving health care organization and delivery.

Undergraduate and graduate students from the program will perform projects in tandem with CCNC. The first of these is already in progress: Students are tracking and documenting CCNC’s process across the state to examine similarities and disparities in services offered in different regions.

Multiple national studies have detailed how health care costs can vary widely, even in neighboring communities.

Department of Health and Human Services Sec. Aldona Wos was present at the announcement of the partnership. She said she believes that by working with the ISE department, CCNC will be able to meet what she said is its obligation to the state: enhancing its standardization and compliance in coordinated care.

“I truly believe it will help CCNC to have this partnership with NC State, and that they will be able to produce a good product ” Wos said. “It’s a wonderful thing.”

Map of Community Care Networks in North Carolina. Image courtesy CCNC

Some critics of CCNC have argued the organization has been a “waste of taxpayer money” due to purported overspending and inefficiencies within the program. Last year, lawmakers assigned the state auditor to evaluate the group’s spending, with a report expected in the coming months.

But North Carolina’s Medicaid program had the nation’s lowest year-over-year growth from 2007 to 2010. And according to an actuarial report delivered by a national firm, CCNC helped the state avoid $1 billion in medical costs during the same time period.

In recent years, that year-over-year growth has increased, but a fiscal analyst released a report last January showing that, nonetheless, Medicaid spending has decreased 11 percent a member since 2008.

Paul Cohen, head of NC State’s ISE department, said that his program has worked with many health care organizations, including the Durham VA Medical Center, to save money and improve care. He said he expects to be able to use software that models health care activities to predict patient actions and design services that better anticipate patient needs.

Paul Grundy, a founding president of IBM’s Global Health Care transformation and “godfather” of the medical home movement, spoke in favor of the intersection of industrial engineering and health care.

“How do we take a box of options that work? How do we take that box and reach out to your two-doctor practice in Western North Carolina with some simple tools that make it easier, so no doctor is left behind?” Grundy asked, addressing the 300-plus attendees at Tuesday’s forum.

Dobson said ensuring that the hundreds of thousands of Medicaid patients in North Carolina’s 100 counties all receive the same level of care is his top priority. He has asked NC State’s help in gaining a deeper knowledge of patients’ needs and deliver individualized care at a value.

“We put resources in every community across North Carolina to manage the Medicaid population,” Dobson said. “The question is: Every community is different, so how do we provide consistent delivery of care when the infrastructure is different?”

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