Dual Eligibility: Choice and Access for Individuals Eligible for Medicare and Medicaid, Judy Feder

it is interesting to be at a conference that’s talking primarily about the changes coming with the Affordable Care Act and that we start with long-term care which usually goes to the bottom of the pile is I so thank you for that the the downside of it is I’m really excited about the Affordable Care Act right and I’m really excited that we’re moving forward a little well anxious but excited and I’m gonna give you another downer about current policy so you’re just you’re just gonna have to forgive me in that regard I’m going to shift from talking about the future of financing for long-term care although Howard gave us a lot of background as well on how we’re financing and voc zero in on a specific population who currently needs long-term care and those are a some of what we call the dual eligibles not a very felicitous name but it’s what we call people who are actually dually enrolled they are both Medicare and Medicaid beneficiaries only about 30 percent of that population actually needs long-term care but they but they account for about three-quarters of the money that Medicaid spends on dual eligibles so they’re a very there it’s only a share of the group but an expensive share of that population and it’s important to remember that when we talk about the people who are dually eligible for Medicare and Medicaid that they’re a very mixed group sometimes it’s assumed that they’re all needing long-term care all very expensive some of them do and that’s but that’s the population I want to focus on but some of them are just poor old or disabled people or not disabled poor old people who don’t need a lot of service and we don’t spend a lot on them so there’s a distribution of costs and need even in this population let’s focus in on the population that is the expensive population who does need a lot of care in this group they are eligible for Medicaid as well as Medicaid because they’re poor because they become poor when they need serve and they have both medical and needs and functional impairments they need helping with basic tasks of daily living and that lead to a lot of expensive both healthcare services and personal assistance and other services now it would be great and that’s kind of the tone that Howard gave to it if people were working on this issue because of we’re all about improving care for this population creating the kinds of coordination among different across different kinds of services in order to prevent the use of expensive services and this population desperately needs that kind of help but they this these people account for roughly 1/3 of Medicare and Medicaid costs they are expensive the ones who need long-term care are expensive to both programs and I don’t think I’m going out on a limb here to tell you that I think the primary reason they’re getting so much policy attention is because they’re where the money is now we’re going to hear a lot more I think about and later in the morning and going into the afternoon about the payment and delivery innovations that are so much a part of the Affordable Care Act and I’m a card-carrying member of the supporters of those innovations I’m looking at David Cutler as we’ve written together on in thinking about how these delivery reforms should go forward right you raising European fists they’re good thing okay that that’s all fine but I I have some considerable concern about and that I’m going to share with you now about the way of this kind of payment and delivery reform is being handled for the dually eligible population that now they are remember a poor population so the innovations for poor Medicare beneficiaries is being handled quite differently from the innovations for all Medicare beneficiaries and we talk about equity and in general which we’re going to hear more about the accountable care organizations medical homes the the whole array of innovations of new delivery arrangements being developed for the overall Medicare population the approach that is really quite cautious the incentives are gentle we have a

tremendous reliance on shared savings that means that if providers can develop come together and develop a delivery arrangement and and can in providing services spend less than they are projected to spend then they keep a share of the savings and the program keeps a share of the savings so that’s kind of a gentle kinder gentler way to move that change in the system they’re also being done for relatively small population groups they are not all but many of them are pilots and they are all pretty modest initiatives inside in size the int the intention being that we should really test the concepts and see how they work and evaluate them see how they do work and when and if they do then we expand them to broader populations and that that is the primary model of delivery reform in the Affordable Care Act but it when it comes to poor dual eligibles that’s not the approach that CMS is taking as howard mentioned the approach the a very aggressive approach is to is being led by CMS working with States and you talked about about five states already have agreements we have 20 or more states working on agreements with the state Medicaid programs working on agreements with the federal government to to do large-scale waiver programs not small as Howard said but hundreds of thousands of people and they are not being put forward in the States as demonstrations they are being put forward as transitions to a new model of care the other thing is quite different in the way they’re going forward from the general approach to payment and delivery of our form in the Affordable Care Act is instead of these gentle financial incentives that if money is saved if there are savings then the providers would she receive a chair of the ward what the program does to this model assumes savings upfront they the arrangements that are being made with States is that they will get payments or providers will get payments from Medicare and Medicaid that are cut from the get-go and taking the savings out up front on the assumption that we will produce results and we will have better care at lower cost now the reliance on managed this is relying heavily on managed care arrangements in the states and states made Medicaid programs do have a great deal of experience with managed care but that experience is with the healthy segments of the generally healthy segment of the Medicaid population it’s with moms and kids neither Medicaid nor Medicare which also has some managed care plans for disabled populations neither one has experience with much experience with this population so essentially in good tradition of economists we’re going to assume that the delivery system works right take the money out up front and and forge ahead and and and put this population and untested arrangements now I think you can tell from my tone I find that kind of a risky proposition and risky in a variety of ways it’s the the easiest way for these inexperienced plans to save money is to pull down provider payment rates so these these are Medicare beneficiaries and these plans will now be controlling the use of Medicare services so they can pay less to to hospitals and and box and they can limit both in that way in other ways actually limit access to care I’m a little I know about the the incentives to give better care mmm but they’re the same as the incentives to give less care so this is a little a little problematic at the same time this these arrangements by treating Medicare beneficiaries or making them Medicaid beneficiaries it threatens rights that Medicare beneficiaries have to open access to care low-income beneficiaries have those rights the same as as higher income beneficiaries and these arrangements as the law allows pretty much override these these protections and on the grounds that the the the program is looking out for them I find it particularly strange that that see that this approach is going so forward so rapidly afraid strains from the the federal perspective because the services

although we believe and there is some promising evidence which I’ll talk about that by integrating health and health services coordinating services getting our doctors to talk to each other there are improvements significant improvements to be made in care and and potentially savings to be had but the the evidence and the expectation in terms of savings for dual eligibles all comes from better managing their health care services it’s better managed it’s essentially keeping them out of the hospital through preventive and good primary and nursing care it’s not about good long-term care and personal assistance may help with that but that’s not where anybody’s expects to see any savings it’s all on the hospital side or on the Medicare side the side that Medicare pays for and from a fiscal perspective it seems to me that this is again odd that Medicare which is where I’m gonna know that that the federal government is not taking the lead this slide shows you what portion of the spend on on dual eligibles is federal and what portion is state and you see that that will Pitt salon the right of state spending is twenty that that’s coming from from state revenue state Treasuries is twenty percent of the spending on dual eligibles is coming from states eighty percent of the spending is coming from the federal government through a combination of Medicare mostly Medicare but also the federal dollars that that Medicare that excuse me that the federal government the dollars that the federal government spends on Medicaid so it seems odd that from a fiscal percent perspective as well as a delivery system perspective that the feds are turning this over to the states it’s another reason I find it odd is that it is not only dual eligibles who need long-term care who can benefit from this coordination there are about roughly an equal number of Medicare beneficiaries with higher incomes who have long term care needs who could also benefit from better coordination of care in fact it is this population in the populations whose chronic conditions create a need for personal assistance and other services to support their daily living they are the poster children for better for the possibility to achieve the promise of the ACA in terms of divet delivering better quality care at lower at equal or lower cost so and if we’re going to bend the cost curve this is the population that you want to focus on because we can improve their care as well and though I’m going to show you is that I think CMS is missing a real opportunity in not targeting their demonstrations on this population the rhetoric behind much of the payment and delivery reforms talks about focusing on people with chronic conditions but it is actually people whose chronic conditions create the need for long term care who are the costly as and the care beneficiaries and who could most benefit who could get this better quality at lower cost so I’m just I’m going to show that to you now this slide shows you distinguishes between the chronic the people Medicare beneficiaries with chronic conditions and now I’m looking at Medicare beneficiaries not just dual eligibles and Medicare beneficiaries of all ages so the younger disabled population as well as the older population that it’s the it is the population with chronic conditions and functional impairments that the part of the bar at the top the lightest color they’re the ones who account for a disproportionate share of spending a 15 percent accounting for 32 percent of spending if instead you look just at people with chronic conditions it’s they are not the ones who were using so many services this slide puts that that gives you a dollar perspective on this what this disproportionate is about and you can see in the in the bar on the left that the people with chronic care needs and long-term care needs spend at least twice as much as other people with chronic conditions work and obviously vastly more than people without chronic conditions this slide shows you that this is the that this relationship is more that it’s actually functional limitations the impairments that create the need for personal care that are driving cause no matter how many chronic conditions you have so if you go from left to right you can see doesn’t really matter it’s always the functional limitations that are driving

spending and here you can see that the result of this the disproportionate spending by the people who need long-term care is that they count for on the far right 61% this population accounts for 61 percent of Medicare’s highest spenders and about half of the of the top 20 20% where’s the spending coming from it’s the places when I said at the outset that is the spending that we’re talking about getting a handle on or there are the hospital use of hospital services and hopefully inappropriate use of service I’m not hopefully inappropriate I’ll get to that because we can fix that these this shows you that it is the inpatient or inpatient hospital services and the emergency departments which comes when you don’t have good primary or preventive care and a little more detail here you can see that the big dollars the differential in spending for this population versus others is coming from the hospital’s services the skilled nursing facility services and the home health services so it’s that those are not long-term care services those are services associated within the cute care stay and so that’s that’s really the story it’s all about the hospital that piece of the story now I said this was good news and so I told you I’d be optimistic the the good news is that we do have lots of evidence that this accepts excessive or disproportionate or higher use of hospital and Hospital related services is actually preventable the research that looks at the hospitalizations now back particularly to the dual eligible populations so shows that when you look at conditions for which hospitalizations are regarded as unnecessary if there is good primary and preventive care so I need to look at my notes since I am NOT I’m not that kind of doctor but hospitalizations for for bed sores for pressure ulcers for diabetes for UTIs for pneumonia all are believed to be preventable with good medical care which this population is not getting then all the rates of hospitalization are far higher for dual eligibles than for other Medicare beneficiaries now there are a lot of skeptics about the our ability to achieve the results that the ACL excuse me that the ACA counts on our promises from to really achieve the delivery reform that will prevent these kinds of unnecessary and expensive services and by providing better coordinated care but we and the skepticism comes from the fact that we’ve had a number of demonstrations and the results are are not what we would like them to be let me put it that way but when you look at some of that the experience of those demonstrations the one of the reasons that they are not producing results or have not yet is because the the coordination services can be quite expensive you have to invest in in having good care managers and strong relationships between care managers and patients and their families good access to services it takes it takes a change in the way medical care is actually practiced so it takes a big investment that investment is not costless and if you provide those services to a population that really wasn’t going to use those expensive services anyway if your intervention is not well targeted then you’re going to end up spending more than you save even if you reduce the service use by the most expensive population so the the challenge really is to target interventions to the population who you know is going to need services and then you’ve got a real shot at having the savings from reducing those high bars those high levels of hospital and post hospital and emergency department use reducing that those levels and save more than you spend on the coordination so my argument is that Medicare ought to be taking the lead in this effort and that it is a they ought to be focusing their initiatives at least some of them pilot directed to them on people who need long-term care coordinate the services across the full spectrum of care for dual eligibles those long-term services and supports will be paid for

but other people that won’t be the case but that the families can use a lot of help in terms of managing the array of services they need they need to provide or arrange for the void disabled family members and they ought to have this help as well and can benefit to it and that consequently if Medicare takes the lead we would be applying these innovations to the full population who needs long-term care not just to the poorest among them so we know that these promising there are examples as I said if you look closely at some of the demonstrations that do exist around the country you do find that it within their broad population there are groups who are benefitting this is a population that that can benefit there are others but this is one that clearly can and that we ought to build on that experience and that does not mean that Medicare can’t work with States and Medicaid in terms of developing good services for this population they can but the it is I would argue or am arguing it is Medicare’s responsibility to lead in taking care of this population and I think that in abdicating that responsibility to the States they are essentially throwing poor people under the bus thanks you you