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North Carolina Medicaid reform

Lessons from population health

In an effort to improve health outcomes in the communities it serves, Novant Health has implemented patient oriented delivery systems (PODs) using a “population health” model. This shift from a fee-for-service system to a value-based care system is meant to increase the quality of care while driving costs down. This move from volume to value can provide a meaningful example to North Carolina legislators and administration officials as they work to reform the state’s Medicaid program.

Researchers, practitioners and policymakers in healthcare, public health and other fields increasingly use the phrase “population health.” Although their understanding of this phrase differs, many see population health as a powerful opportunity for healthcare delivery systems, public health agencies, community-based organizations and many other entities to work together to improve health outcomes. By improving healthcare outcomes, costs can be reduced while keeping the population healthier.

But to be successful, the focus cannot solely rely on outcomes. Health outcomes are influenced by social, economic and physical environments, individual capacity and coping skills, human biology, personal health practices, early childhood development and health services. Improving healthcare outcomes requires a team approach and an ability to impact all factors.

These same challenges exist for the Medicaid population. The typical Medicaid recipient is a child from a low-income family or an individual who is elderly, blind or disabled. These groups tend to have many external factors that affect their ability to obtain healthcare and follow a treatment plan. These challenges also make them a more expensive segment of the population to care for.

To cover some of the costs of Medicaid, states are forced to shift money away from needed areas, such as education and transportation. Transportation projects get delayed, and schools become overcrowded and underfunded. At the same time, providers are being paid less than the cost of delivering service and are forced to make up the difference by shifting costs to the commercial market. This cost shifting inevitably results in higher insurance premiums for employers.

North Carolina is one of many states currently struggling with how to reform its Medicaid program. Many agree that North Carolina needs a system that runs efficiently and provides quality care for some of the state’s most vulnerable citizens. How to best deliver that care and provide North Carolina with much needed budget predictability is still the subject of discussion. As North Carolina reforms Medicaid, healthcare providers can be a valuable resource. By managing the health of Medicaid recipients and following a population health approach, the North Carolina Medicaid population can be ensured safe and quality care is delivered efficiently and at a considerable value.

For example, North Carolina patient Sally Smith* tells the story of how population health management can ensure individual patients are given the tools to manage their own conditions. Sally raised a flag in our system when a care coordinator followed up to ensure she understood her treatment plan. In the conversation, the care coordinator learned Sally was not following her treatment plan and she had not even filled a prescription for managing her condition. The reason? She could not afford the drug. Through the population health approach, the team worked with Sally’s doctor, a pharmacist and a local care clinic to adjust her medication to a less-expensive, but still effective, drug and also found her financial assistance to pay for the medication. Without this approach, it is likely Sally would have ended up in the emergency room in a crisis — a far more costly alternative to managing her condition.

Population health is evolving at Novant Health. The lessons learned through the organization’s efforts could offer valuable information in the Medicaid reform conversation.

*Patient name changed to protect identity. Representative patient example based on true story.

Published: 11/4/2014