Three Experts Tell of Promising State Practices to Control the Cost of Medicaid

Marcia Nielsen, vice chancellor for public policy and planning at the University of Kansas Medical Center, said at the 2010 CSG Economic Summit of the States that to cut costs in state Medicaid programs, states have to know what they’re doing right and what areas can be improved.

“Legislators were so focused on welfare moms on where to find savings and looking at potential misuse of pharmaceuticals,” she said of her experience in Kansas. But the answer lay elsewhere. The data from studies Kansas conducted showed that more than 50 percent of health care costs were related to care of the elderly and disabled. So that’s where stakeholders directed their attention to cut costs.

But it takes time, Nielsen said, and states have to find early successes. “The challenges in Kansas and I’m guessing in lots of other states is patience,” she said. People want results now. Nielsen suggested states look at areas that can provide quick success.

Chad Shearer,from the Center for Health Care Strategies in New Jersey, agreed that the best opportunities for savings come from intervening in the care of the 5 percent of Medicaid beneficiaries who account for 50 to 60 percent of Medicaid spending. He suggested that states have implemented promising programs that have the dual impacts of improving the quality of care as well as curbing spending in the following areas:

  • Enhanced fee for service primary care case management;
  • Integrating physical and behavioral health services; and
  • Integrating care for adults who are dually eligible for Medicaid and Medicare.

Mike Nardone, deputy secretary of the state’s Office of Medical Assistance Programs, offered insights into Pennsylvania’s successes during the conference session, “Managing Medicaid: Options for Controlling Costs.” Among the solutions: installing Medicaid managed care in Pennsylvania’s urban and suburban areas; improving primary care access in more rural areas where managed care wouldn’t easily work; and improving management of the Medicaid pharmacy programs, he said.

While those solutions worked in Pennsylvania, Nardone cautioned attendees at the session. “One size does not fit all,” he said. “Every state is different and so the targets of opportunity for you are going to be different depending on how you’ve structured your program.”

Chad Shearer, program officer for the Center for Health Care Strategies, left, listened as Marcia Nielsen, vice chancellor for public policy and planning at the University of Kansas Medical Center, discusses Kansas’ efforts to control Medicaid costs during the session, “Managing Medicaid: Options for Controlling Costs,” Friday during the Economic Summit of the States. Photo by Suzanne Feliciano.