Lessons to be learned as Medicaid turns 50

By Jeff Brenner, Joel C. Cantor, and Natassia M. Rozario

This week, we honor an innovator that has transformed health-care delivery in many states, especially for our most vulnerable citizens. It has mitigated health-care disparities and promoted gender equality. It has saved, and improved, millions of lives. It has helped us embrace the idea that all Americans are entitled to basic health insurance. Of course, we're talking about Medicaid, which turned 50 on Thursday.

Despite attempts to cut its funding, Medicaid has become the nation's largest source of health care. It covers half of the country's births, one-third of its children, and two-thirds of its elderly and disabled in nursing homes. Nearly 70 million low-income Americans rely on it, including working parents, pregnant women, and the 10 million individuals now covered by Medicaid under the Affordable Care Act.

Greater access has led to greater costs for states, which run Medicaid under federal guidelines. But with expenses increasing while budgets shrink, states have used Medicaid to drive health-care innovation. They have deployed pilot programs focusing on the 5 percent of Medicaid patients who drive half the program's costs. The pilot programs are testing a theory that other countries have already adopted: When we invest more in social services, we reduce health-care costs by preventing chronic conditions from becoming life-threatening illnesses that require more expensive, invasive, debilitating, and risky care.

New Jersey, which spends more than $12 billion annually on Medicaid, recently authorized Medicaid Accountable Care Organizations. These community-based organizations couple access to primary care with extensive social services, especially for the most expensive patients. These organizations encourage communities to develop housing programs for the chronically homeless and medically needy; targeted care coordination for the highest-cost patients; citywide health databases among Medicaid providers to improve coordination; and outreach efforts with faith-based organizations.

New Jersey's efforts are a sample of the scores of pilots burgeoning around the country. Which are working? Which are failing? To rigorously evaluate programs, we need good data. Although the pilots are backed by ample anecdotes, we lack the necessary integrated data to answer the tough questions about their impact.

The good news is that states already generate huge amounts of data just by running programs. The problem is that multiple legal and bureaucratic hurdles impede access to that information. It can be scattered among a complicated web of state agencies and their divisions. In addition, information about social programs is kept apart from public health data, making it difficult to evaluate pilots that pair social services with health-care efforts.

Without the ability to determine what's working, funding for effective pilots is cut, bad policies remain entrenched, and good policies are never realized. In the era of "big data," we should do better.

Integrated data systems can help. These systems protect privacy and data security while providing a framework to link health data with other information, such as housing, education, employment, and transportation. Because these systems make use of data that has already been collected, they offer a highly efficient way to conduct evaluations. They also have enormous potential for cost savings by promoting careful resource allocation to evidence-based programs, enhancing coordination, and reducing instances of inefficiency and redundancy of services. States such as Washington are starting to establish integrated data systems to create smarter health and social programs. The systems have allowed for more rigorous evaluation and offered a more holistic understanding of a community's health and the social forces that affect it.

In recent years, the most successful companies and organizations in the world have also leveraged the power of integrated data sets to design products and services to serve customers and constituents better. It is logical to conclude that if applied correctly, these same principles can provide a richer understanding of the Medicaid population. Coalescing around evidence-based solutions is the only way to assure that the limited resources available are used effectively and efficiently.

The use of integrated data systems in more states will build smarter, better, and less costly Medicaid programs. The lessons learned from Medicaid pilots can also be more widely applied to the broader U.S. health-care system, which is in desperate need of change. Although the United States spends more than any other country on health care, it lags behind much of the developed world in health outcomes, ranking last among the richest countries. What Medicaid is beginning to discover - that health is complex and encompasses more than just medicine - much of the world has already learned.

Ultimately, to deliver better care at lower costs for all Americans, we must learn from what Medicaid, the great innovator, has to teach us. And for that, we will need good integrated data.

Dr. Joel C. Cantor is the director of the Center for State Health Policy and a distinguished professor of public policy at Rutgers University. jcantor@ifh.rutgers.edu

Natassia M. Rozario is associate counsel and associate director of policy and advocacy at the Camden Coalition of Healthcare Providers. natassiar@camdenhealth.org