Better Health, Better Care, and Cost
Savings Through Improvement
Greg Moody
greg.moody@governor.ohio.gov
The Center for Community Solutions
March 24, 2011
Medicaid is Ohio’s Largest Health Payer
• Provides health coverage for low-income children, parents,
seniors, and people with disabilities
• Covers 2.2 million Ohioans (1 in 5) including 2 in 5 births1
• Spends $18+ billion annually all agencies, all funds (SFY 2011) 1
• Accounts for 4.0% of Ohio’s total economy and is growing2
• Funds are federal (63.69%) and state (36.31%)3
SOURCES: (1) Ohio Department of Job and Family Services, (2) SFY 2011
estimate based on $18.0 billion in Medicaid spending per ODJFS and $498
billion Ohio gross domestic product per the State of Ohio Office of Budget
and Management, and (3) Federal Register Vol. 76 No. 22 page 5811.
Ohioans Covered by Employer-Sponsored Health
Insurance, Medicaid, or Uninsured
70%
60%
63.9%
EmployerSponsored
57.4% Insurance
17.0%
18.8%
8.5%
9.8%
11.4% Medicaid
2009
2010
2011
66.3%
50%
40%
30%
20%
15.0%
10%
0%
-10%
Uninsured
Source: Ohio Colleges of Medicine Government Resource Center, “Quantifying
the Impact of the Recent Recession on Ohioans: preliminary findings from the
2010 Ohio Family Health Survey” (February 16, 2011)
Federal Health Care Reform:
Government Coverage Expansions
500%
Federal Poverty Level
Private Insurance
$89,400 for a
family of 4
400%
Health Benefit Exchange
400%
300%
200%
100%
$30,843 for a
family of 4
Medicaid
Medicaid
Expansion
Medicaid
Expansion
Medicaid
Expansion
138%
0%
Children
Pregnant
Women
Parents
Source: X
Childless
Adults
Disabled
Workers
Disabled
Elderly
Ohio’s Health System Performance
Health Outcomes – 42nd overall1
– 42nd in preventing infant mortality (only 8 states have higher mortality)
– 37th in preventing childhood obesity
– 44th in breast cancer deaths and 38th in colorectal cancer deaths
Prevention, Primary Care, and Care Coordination1
– 37th in preventing avoidable deaths before age 75
– 44th in avoiding Medicare hospital admissions for preventable conditions
– 40th in avoiding Medicare hospital readmissions
Affordability of Health Services2
– 37th most affordable (Ohio spends more per person than all but 13 states)
– 38th most affordable for hospital care and 45th for nursing homes
– 44th most affordable Medicaid for seniors
Sources: (1) Commonwealth Fund 2009 State Scorecard on Health
System Performance, (2) Kaiser Family Foundation State Health
Facts (updated March 2011)
A few high-cost cases account for most Medicaid spending
100%
1%
3%
23%
80%
28%
60%
40%
96%
1% of the Medicaid
population consumes 23%
of total Medicaid spending
4% of the Medicaid
population consumes
51% of total spending
49%
20%
0%
Enrollment
Spending
Source: Ohio Department of Job and Family Services; SFY 2010 for
all Medicaid populations and all medical (not administrative) costs
Fragmentation
vs.
Coordination
 Multiple separate providers
 Accountable medical home
 Provider-centered care
 Patient-centered care
 Reimbursement rewards volume
 Reimbursement rewards value
 Lack of comparison data
 Price and quality transparency
 Outdated information technology
 Electronic information exchange
 No accountability
 Performance measures
 Institutional bias
 Continuum of care
 Separate government systems
 Medicare/Medicaid/Exchanges
 Complicated categorical eligibility
 Streamlined income eligibility
 Rapid cost growth
 Sustainable growth over time
SOURCE: Adapted from Melanie Bella, State Innovative Programs for Dual
Eligibles, NASMD (November 2009)
“The critical flaw in our health care system … is that
it was never designed for the kind of patients who incur
the highest costs. Medicine’s primary mechanism of
service is the doctor visit and the emergency room visit.
It’s like arriving at a major construction project with
nothing but a screwdriver and a crane.”
Source: The New Yorker (Jan 24, 2011).
Medical Hot Spot:
Emergency Department Utilization: Ohio vs. US
Hospital Emergency Room Visits per 1,000 Population
600
United States
500
436
400
365
452
366
450
372
Ohio
449
382
468
382
472
383
488
387
509
396
516
401
523
404
29%
300
200
100
0
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Source: American Hospital Association Annual Survey (March 2010) and
population data from Annual Population Estimates, US Census Bureau:
http://www.census.gov/popest/states/NST-ann-est.html.
Medicaid Hot Spot:
Medicaid Enrollees Who Get Care Primarily from Hospitals*
* Indicating a lack of primary care and/or care coordination
Non-Institutionalized
Medicaid Population
Enrollment
Spending
Number
%
Amount
%
Average
Cost
Children
29,552
1.3%
$510 million
5%
$17,300
Adults
12,530
0.5%
$841 million
8%
$67,100
Total
42,082
1.8%
$1.35 billion
13%
$32,100
Source: Ohio Department of Job and Family Services for SFY 2010. Note that
medical costs include those incurred by MCPs and paid by FFS, excluding
institutionalized consumers and their costs. Consumers may have been in both
FFS and MC delivery systems within SFY 2010. This analysis includes consumers
costs in both systems.
Medicaid Hot Spot:
Hospital Admissions for People with Severe Mental Illness
Avoidable hospitalizations per 1000 persons for ambulatory care
sensitive conditions (avoidable with proper treatment)
8
Non-SMI
7
7.01
6
6.75
Severe Mental Illness (SMI)
5
4.86
4
3
3.53
3.69
4.18
3.24
2
2.33
1
0
Diabetes
COPD
Congestive Heart
Failure
Asthma
Source: Ohio Colleges of Medicine Government Resource Center and Health
Management Associates, Ohio Medicaid Claims Analysis (February 2011)
Ohio Medicaid Spending Trend
9 percent average annual growth, 2008-2011
$25
Billion
State General Revenue Fund
All Other
$20
$15
$13.5
$15.2
+12%
$11.2
$15.8
+4%
$18.0
+14%
$14.3
$19.3
+7%
$20.8
+8%
$15.1
$14.0
$12.9
$9.1
$10
$5
+ 42.8%
$4.4
$4.0
$3.0
$5.3
$5.7
2012
2013
$3.8
$0
2008
2009
2010
2011
Source: Office of Health Transformation Consolidated Medicaid Budget, All
Funds, All Agencies; actual SFY 2008-2010 and estimated SFY 2011-2013; “All
Other” includes Federal Funds and Non-General Revenue Funds (non-GRF)
The current Ohio HHS Medicaid organization
Governor
JFS
DD
MH
ADAS
Aging
Health
12 Area
Agencies on
Aging
130 Local
Health
Departments
Medicaid
Single State Agency
130 County
Offices
88 County
Boards
56 Combined
County Boards
Medicaid as a %
of Agency Budget
JFS Medicaid
Dev Disabilities
Mental Health
Alcohol and Drug
Aging
Health
73%
91%
61%
28%
83%
3%
Agency Medicaid
as a % of Total
Ohio Medicaid
84%
8%
4%
0.3%
3%
0.1%
($13.3 billion)
($1.3 billion)
($590 million)
($63 million)
($534 million)
($17 million)
Source: Legislative Service Commission, “Total Medicaid Spending by
Agency” (State Fiscal Year 2010).
John R.
Kasich,
Greg
Moody,
Governor
Director
• Elise Spriggs, Government Affairs
• Eric Poklar, Communications
• Monica Juenger, Stakeholder Relations
Leadership
Team
“All Cabinet Agencies, Boards and Commissions shall
comply with requests or directives issued by OHT,
subject to supervision of their respective directors.”
Policy
Teams
“OHT shall contract with state and/or private agencies
for services in order to facilitate the implementation
and operation of the OHT’s responsibilities.”
Consultant
Team
Stakeholder
Partners
Prioritize stakeholder communication
Michael
Colbert
John
McCarthy
John
Martin
Tracy
Plouck
Orman
Hall
Bonnie
Kantor
Dr. Ted
Wymyslo
(JFS)
(Medicaid)
(DODD)
(ODMH)
(ODADAS)
(Aging)
(Health)
Source: Ohio Governor John R. Kasich, Executive Order 2011-02K (January 13, 2011)
Executive Order
Plan for the long-term efficient administration of the Ohio
Medicaid Program and act to improve overall health system
performance. In the next six months:
1. Advance the Administration’s Medicaid modernization and
cost-containment priorities in the operating budget;
2. Initiate and guide insurance market exchange planning;
3. Engage private sector partners to set clear expectations for
overall health system performance; and
4. Recommend a permanent Ohio health and human services
organizational structure and oversee transition.
Source: Ohio Governor John R. Kasich, Executive Order 2011-02K (January 13, 2011)
The Vision for Better Care Coordination
• Create a person-centered care management approach – not a
provider, program, or payer approach
• Services are integrated for all physical, behavioral, long-term
care, and social needs
• Services are provided in the setting of choice
• Easy to navigate for consumers and providers
• Transition seamlessly among settings as needs change
• Link payment to person-centered performance outcomes
Medicaid Hot Spot:
Enrollment Spending by Top Managed Chronic Conditions
100%
80%
11%
23%
39%
60%
40%
31%
Consumers with
ONE of the top
managed chronic
conditions
30%
Consumers
without one of the
top managed
chronic conditions
66%
20%
0%
Consumers with
TWO OR MORE of
the top managed
chronic conditions
Enrollment (2.3 million) Spending ($10.3 billion)
Source: Ohio Department of Job and Family Services. Institutionalized
consumers excluded. Based on SFY 2010 total medical cost either by ODJFS or
Medicaid managed care plans. Top managed conditions = Diabetes, CAD, CHF,
Hypertension, COPD, Asthma, Obesity, Migraine, HIV, BH, & Sub. Abuse.
Ohio Health Transformation Priorities
•
•
•
•
Improve Care Coordination
Integrate Behavioral and Physical Health
Rebalance Long-Term Care
Modernize Reimbursement
www.healthtransformation.ohio.gov
A Case Study in Transformation:
Ohio Department of Developmental Disabilities
30,000
GRF = $335M
25,000
Number of Individuals
20,000
15,000
10,000
5,000 2,637 2,683 2,807 4,495
5,550 5,601 5,663
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
Waivers (Home and Community-based Care)
2004
2005
2006
2007
2008
2009
2010
DC (Developmental Center)
2011
A Case Study in Transformation:
Ohio Department of Developmental Disabilities
30,000
GRF = $331M
GRF = $335M
24,528
23,647
25,000
Number of Individuals
20,753
20,000
18,128
16,359
15,763
15,000
12,902
10,744
9,145
10,000
7,081
5,000 2,637 2,683 2,807 4,495
5,550 5,601 5,663
0
1995
1996
1997
1998
1999
2000
2001
2002
2003
Waivers (Home and Community-based Care)
2004
2005
2006
2007
2008
2009
2010
DC (Developmental Center)
2011
Ohio Medicaid Spending per Member per Month by Setting
Institutional Services
Waiver Services
All Other Medicaid
People with developmental disabilities
$12,937
State Developmental Center
$8,473
Private Intermediate Care Facility
$5,568
Individual Options
Transitions
$4,819
$1,418
Level One
People with other disabilities or over age 65
Nursing Facility
$4,463
Home Care
$4,584
$4,067
Transitions Aging
$2,058
$1,869
$1,695
$1,356
Choices
Assisted Living
PASSPORT
Other in Managed Care
$530
Other in Fee-for-Service
Other children and parents
Fee-for-Service
$298
$254
Managed Care
0
2000
4000
6000
8000
10000
12000
14000
Source: Ohio Department of Job and Family Services. Includes claims incurred from July
2009 through June 2010 and paid through October 2010; cost differences between
institutional and waiver/community alternatives do not necessarily represent program
savings because population groups being compared may differ in health care needs.
Ohio Medicaid Residents of Institutions Compared to
Recipients of Home and Community Based Waivers
70,000
Home and Community Based
(Aging, JFS, and DD waiver recipients)
65,000
65,907
60,000
60,128
58,609
55,000
57,597
56,011
56,891
56,503
Facility-Based
52,745
50,000
45,000
59,979
(NF, ICF/DD, Developmental
Center residents)
46,965
40,000
2006
2007
2008
2009
2010
Source: Ohio Department of Job and Family Services; based on average
monthly recipients for SFYs 2006-2010.
Medical Hot Spot:
Per Capita Health Spending: Ohio vs. US
US
Ohio
Percentage
Difference
Affordability Rank
(Out of 50 States)
Total Health Spending
$5,283
$5,725
+ 8%
37
Hospital Care
$1,931
$2,166
+ 12%
38
Physician and Clinical
Services
$1,341
$1,337
- 0.3%
27
Nursing Home Care
$392
$596
+ 52%
45
Home Health Care
$145
$133
- 8.3%
35
Measurement
Source: 2004 Health Expenditure Data, Health Expenditures by State of Residence,
Centers for Medicare and Medicaid Services, Office of the Actuary, National Health
Statistics Group, released September 2007; available at
http://www.cms.hhs.gov/NationalHealthExpendData/downloads/res-us.pdf
Medicaid Hot Spot:
Per Enrollee Medicaid Spending: Ohio vs. US
US
Ohio
Percentage
Difference
Affordability Rank
(Out of 50 States)
All Enrollees
$5,163
$5,781
+ 12.0%
36
Children
$2,135
$1,672
- 21.7%
7
Adults
$2,541
$2,844
+ 13.5%
18
Elderly
$12,499
$18,087
+ 44.7%
44
Disabled
$14,481
$15,674
+ 8.2%
33
Measurement
Source: 2007 The Urban Institute and Kaiser Commission on Medicaid and the Uninsured
estimates based on data from Medicaid Statistical Information System (MSIS) and CMS64 reports from the Centers for Medicare and Medicaid Services (CMS), 2010.
Unused Nursing Home Capacity
In 70 counties more than 10% of beds are empty
Williams
25.6%
Fulton
9.2%
Defiance
19.4%
Paulding
29.4%
Van Wert
17.8%
Putnam
21.2%
Darke
18.5%
Miami
9.6%
Hardin
21.3%
Preble
9.5%
Montgomery
11.5%
Butler
15.1%
Warren
9.8%
Union
11.9%
Champaign
31.8%
Madison
7.0%
Greene
13.4%
Clinton
19.4%
Hamilton
12.7%
Fayette
9.2%
Brown
20.0%
Adams
13.6%
Ashland
11.9%
Pike
12.0%
Scioto
12.3%
Wayne
16.6%
Holmes
8.0%
Morrow
21.1%
Knox
21.2%
Licking
15.7%
Fairfield
12.3%
Muskingum
10.4%
Perry
17.8%
Vinton
25.4%
Trumbull
14.5%
Portage
10.8%
Morgan
7.2%
Athens
6.6%
Gallia
13.7%
Mahoning
14.8%
Stark
14.5%
Columbiana
12.0%
Carroll
13.8%
Tuscarawas
16.3%
Harrison
9.2%
Guernsey
20.4%
Noble
22.3%
Meigs
11.7%
Jackson
10.5%
Lawrence
13.5%
Summit
10.4%
Geauga
6.6%
Coshocton
17.2%
Hocking
13.3%
Ross
7.8%
Highland
10.5%
Clermont
11.7%
Pickaway
7.2%
Medina
16.1%
Richland
13.5%
Delaware
11.2%
Franklin
12.6%
Cuyahoga
14.1%
Lorain
13.6%
Huron
14.6%
Crawford
14.7%
Marion
13.0%
Logan
12.5%
Clark
16.5%
Erie
16.4%
Seneca
14.4%
Wyandot
14.5%
Allen
15.6%
Shelby
8.0%
Sandusky
14.0%
Hancock
9.9%
Auglaize
18.6%
Mercer
15.9%
Ottawa
35.1%
Wood
14.6%
Henry
23.2%
Ashtabula
21.0%
Lake
11.8%
Lucas
15.4%
Jefferson
17.1%
Belmont
10.0%
Monroe
8.5%
Washington
10.5%
Nursing Facility Surplus
Percentage of total bed days vacant
6.6% - 10.4%
10.5% - 12.5%
12.6% - 16.3%
16.4% - 23.0%
23.1% - 35.1%
Rebalance Long Term Care
Enable seniors and people with disabilities to live with dignity in
the settings they prefer
RECOMMENDATIONS:
• Create a Single Point of Care Coordination
• Consolidate and Streamline Waiver Programs
• Reward Person-Centered Outcomes in Nursing Homes
• Expect Greater Efficiency from NF and Waiver Providers
• Decrease payments to “hold” empty beds
• Reduce the nursing home franchise fee
• Saves $427 million all funds over the biennium
Research suggests that person-centered
care is associated with improved
organizational performance including
higher resident and staff satisfaction,
better workforce performance and
higher occupancy rates.
Source: 2010 Annual Quality Report, Alliance for Quality
Nursing Home Care and American Health Care Association
Ohio Health Transformation Priorities
•
•
•
•
Improve Care Coordination
Integrate Behavioral and Physical Health
Rebalance Long-Term Care
Modernize Reimbursement
www.healthtransformation.ohio.gov
Balance the Budget
Contain Medicaid program costs in the short term and ensure
financial stability over time
RESULTS:
• A sustainable system
• $1.4 billion in net savings over the biennium
• Align priorities for consumers (better health outcomes) and
taxpayers (better value)
• Challenge the system to improve performance (better care
and cost savings through improvement)
Total Ohio Medicaid Expenditures, SFY 2010
Medicare Buy In
and Part D, 3%
Managed Care
Administration, 3%
Other, 12%
Hospital, 28%
Drugs, 9%
Physicians,
8%
Home and
Community
Services, 14%
Nursing
Facility, 17%
Intermediate Care Facilities
for the Developmentally
Disabled and
Developmental Centers, 5%
Source: Ohio Department of Job and Family Services and the Governors Office
of Health Transformation. Managed care expenditures are distributed to
providers according to information from Milliman. Hospitals include inpatient
and outpatient expenditures as well as HCAP Home and community services
include waivers as well as home health and private duty nursing.
Medicaid Budget:
Savings and Investments
Modernize Hospital Payments
Reform Nursing Facility Payments
Manage Behavioral Health Service Utilization
Reform Managed Care Plan Payments
Reduce PASSPORT rates and service utilization
Align Programs for People with DD
Nursing and Home Health Payment Reform
Reduce Admin for Federal Agencies on Aging
Link Nursing Home Payments to Quality
Create a Unified Long Term Care System
Elevate Behavioral Health Financing to the State
Integrate Behavioral/Physical Health Benefits
Create a Single Point of Coordination
Implement Federal Reform Mandates
Promote Health Homes
Provide Accountable Care for Children
-$478
-$427
-$243
-$159
-$137
-$62
-$35
-$24
$0
$0
$0
$0
$0
$35
$47
$87
-$500 -$400 -$300 -$200 -$100
$0
$100 in millions
Source: Office of Health Transformation (March 15, 2011)
Medicaid Budget:
Impact on Rates by Provider
Nursing Facilities
-7.3%
Outpatient Hospital PMPM
-6.7%
-4.9%
Nursing Services per 4 hours
PASSPORT Provider Rates
-3.0%
-2.5%
Aide Services per 4 hours
Inpatient Hospital PMPM
-1.8%
Managed Care Plans
-1.0%
ICF-DD
0.6%
8.8%
-8%
-6%
-4%
-2%
0%
2%
4%
6%
Physician
8% Estimated change in rate
Source: Office of Health Transformation (March 15, 2011)
What this budget does NOT do
•
•
•
•
•
Does not cut eligibility
Does not cut optional services, including dental
Does not make arbitrary across-the-board cuts
Does not resort to smoke and mirrors
Does not count hypothetical savings
Thank you.
Greg Moody, Director
Governor's Office of Health Transformation
77 South High Street, 30th Floor
Columbus, Ohio 43215
Phone: 614-752-2784
Email: greg.moody@governor.ohio.gov