The ongoing saga of savings estimates for the Community Care of North Carolina (CCNC) patient-centered medical home (PCMH) is finally over. The verdict: no savings. Because the scale and visibility of the CCNC experiment are unparalleled in the Medicaid sector today, it is important that the right policy and delivery system lessons be learned from this dispositive conclusion.
Lesson 1: Enhancements in access do not necessarily create cost reductions, at least in Medicaid.
CCNC is by all accounts an excellent program from the patient’s perspective. Indeed, if I were a Medicaid recipient, I would want to live in North Carolina. The leadership of CCNC is passionate about the program and constantly strives to improve it. However, as was amply observed by J.D. Kleinke on this very blog last week, Medicaid recipients have many lifestyle and economic issues that even the best-intentioned and best-incentivized doctors will never be able to systematically address.
Lesson 2: Perhaps it is time to create an ER co-pay for Medicaid recipients that has more than one digit to the left of the decimal point.
Even as ER co-pays for commercial insurers have soared in the last decade, Medicaid ER co-pays remain virtually non-existent. CCNC created excellent reasons to use primary care but was not permitted to re-price the ER to economically encourage use of primary care. Many Medicaid recipients overuse the ER in part because it is basically free. For the CCNC experiment to truly have a chance to reduce ER visits now that they have created a worthy substitute with their PCMH, it’s only fair to them (and to taxpayers) to reconfigure the financial incentives so that people use their worthy substitute … and then re-measure savings.
Lesson 3: Never assume that if an actuarial consultant says something saved money, they must be right because they are actuaries. Use your own judgment to determine if a claim of savings is plausible.
Milliman is perhaps the best-known name in actuarial consulting and yet they were off by a mile in this case. (They were probably equally off in Illinois, in which they found savings of $180 million in the first six monthsof the Medicaid patient-centered medical home, before many people even had a chance to go to the doctor.) Their failures in their North Carolina analysis were legion, as noted in the article. They “overlooked” data that contradicted their conclusions, they forgot to mention what year the study started, and they came up with conclusions that were quite literally impossible not just one way, but two different independent ways. And in the process of attempting to defend their report, they replaced their only demonstrably true statement — that PCMH savings accrue only in inpatient/ER, while most other costs increase – with the opposite and totally unsupported claim that the majority of savings are somehow found outside the hospital.
Milliman isn’t the only consulting firm not to understand how to measure population-based outcomes. It’s a new field that many if not most consulting firms don’t understand, and as a result routinely report often hilariously impossible findings, as described in my book. The bottom line: if a consultant’s report sounds too good to be true, it probably is, so trust your own judgment when reading it.
Lesson 4: Don’t stop experimenting
Even though savings have been elusive, North Carolina Medicaid should be applauded for trying, and applauded more for persisting. The states are our laboratories for health policy, and if a lab is shut down because we don’t like the result of their experiment, it will discourage other states from attempting novel approaches. Eventually something will work but along the way one must recall Jacob Riis’s observation that “when nothing seems to help, I go and look at a stonecutter hammering away at his rock perhaps a hundred times. On the hundred-and-first time, it will split in two, and I know it was not that blow that did it, but all that had gone before.”
Al Lewis, widely credited with inventing disease management, is author of the forthcoming Why Nobody Believes the Numbers (John Wiley & Sons, June 2012), the introduction to which may now be downloaded gratis from www.dismgmt.com. He also runs the popular course and certification program for Critical Outcomes Report Analysishttp://www.dismgmt.com/certs/cora/self-study and was named the “leading authority on care management outcomes measurement” by the 9th Annual Report on the Disease Management and Wellness Industries (Health Industries Research Co., 2010).