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Better Health, Better Care, and Cost Savings Through Improvement Greg Moody greg.moody@governor.ohio.gov The Center for

Better Health, Better Care, and Cost Savings Through Improvement Greg Moody greg.moody@governor.ohio.gov The Center for Community Solutions March 24, 2011. Medicaid is Ohio’s Largest Health Payer.

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Better Health, Better Care, and Cost Savings Through Improvement Greg Moody greg.moody@governor.ohio.gov The Center for

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  1. Better Health, Better Care, and Cost Savings Through Improvement Greg Moody greg.moody@governor.ohio.gov The Center for Community Solutions March 24, 2011

  2. Medicaid is Ohio’s Largest Health Payer • Provides health coverage for low-income children, parents, seniors, and people with disabilities • Covers 2.2 million Ohioans (1 in 5) including 2 in 5 births1 • Spends $18+ billion annually all agencies, all funds (SFY 2011) 1 • Accounts for 4.0% of Ohio’s total economy and is growing2 • Funds are federal (63.69%) and state (36.31%)3 SOURCES: (1) Ohio Department of Job and Family Services, (2) SFY 2011 estimate based on $18.0 billion in Medicaid spending per ODJFS and $498 billion Ohio gross domestic product per the State of Ohio Office of Budget and Management, and (3) Federal Register Vol. 76 No. 22 page 5811.

  3. Ohioans Covered by Employer-Sponsored Health Insurance, Medicaid, or Uninsured Employer-Sponsored Insurance Uninsured Medicaid Source: Ohio Colleges of Medicine Government Resource Center, “Quantifying the Impact of the Recent Recession on Ohioans: preliminary findings from the 2010 Ohio Family Health Survey” (February 16, 2011)

  4. Federal Health Care Reform: Government Coverage Expansions Private Insurance $89,400 for a family of 4 400% Health Benefit Exchange Federal Poverty Level $30,843 for a family of 4 138% Medicaid Medicaid Expansion Medicaid Expansion Medicaid Expansion Source: X

  5. Ohio’s Health System Performance Health Outcomes – 42nd overall1 • 42nd in preventing infant mortality (only 8 states have higher mortality) • 37th in preventing childhood obesity • 44th in breast cancer deaths and 38th in colorectal cancer deaths Prevention, Primary Care, and Care Coordination1 • 37th in preventing avoidable deaths before age 75 • 44th in avoiding Medicare hospital admissions for preventable conditions • 40th in avoiding Medicare hospital readmissions Affordability of Health Services2 • 37th most affordable (Ohio spends more per person than all but 13 states) • 38thmost affordable for hospital care and 45thfor nursing homes • 44thmost affordable Medicaid for seniors Sources: (1) Commonwealth Fund 2009 State Scorecard on Health System Performance, (2) Kaiser Family Foundation State Health Facts (updated March 2011)

  6. A few high-cost cases account for most Medicaid spending 3% 1% of the Medicaid population consumes 23% of total Medicaid spending 4% of the Medicaid population consumes 51% of total spending Source: Ohio Department of Job and Family Services; SFY 2010 for all Medicaid populations and all medical (not administrative) costs

  7. SOURCE: Adapted from Melanie Bella, State Innovative Programs for Dual Eligibles, NASMD (November 2009)

  8. “The critical flaw in our health care system … is that it was never designed for the kind of patients who incur the highest costs. Medicine’s primary mechanism of service is the doctor visit and the emergency room visit. It’s like arriving at a major construction project with nothing but a screwdriver and a crane.” Source: The New Yorker (Jan 24, 2011).

  9. Medical Hot Spot:Emergency Department Utilization: Ohio vs. US Hospital Emergency Room Visits per 1,000 Population 29% Source: American Hospital Association Annual Survey (March 2010) and population data from Annual Population Estimates, US Census Bureau: http://www.census.gov/popest/states/NST-ann-est.html.

  10. Medicaid Hot Spot:Medicaid Enrollees Who Get Care Primarily from Hospitals* * Indicating a lack of primary care and/or care coordination Source: Ohio Department of Job and Family Services for SFY 2010. Note that medical costs include those incurred by MCPs and paid by FFS, excluding institutionalized consumers and their costs. Consumers may have been in both FFS and MC delivery systems within SFY 2010. This analysis includes consumers costs in both systems.

  11. Medicaid Hot Spot:Hospital Admissions for People with Severe Mental Illness Avoidable hospitalizations per 1000 persons for ambulatory care sensitive conditions (avoidable with proper treatment) Source: Ohio Colleges of Medicine Government Resource Center and Health Management Associates, Ohio Medicaid Claims Analysis (February 2011)

  12. Ohio Medicaid Spending Trend9 percent average annual growth, 2008-2011 Billion $20.8 +8% $19.3 +7% $18.0 +14% $15.8 +4% $15.2 +12% $13.5 + 42.8% Source: Office of Health Transformation Consolidated Medicaid Budget, All Funds, All Agencies; actual SFY 2008-2010 and estimated SFY 2011-2013; “All Other” includes Federal Funds and Non-General Revenue Funds (non-GRF)

  13. The current Ohio HHS Medicaid organization Governor JFS DD MH ADAS Aging Health Medicaid Single State Agency 130 County Offices 88 County Boards 56 Combined County Boards 12 Area Agencies on Aging 130 Local Health Departments Source: Legislative Service Commission, “Total Medicaid Spending by Agency” (State Fiscal Year 2010).

  14. John R. Kasich, Governor Greg Moody, Director Leadership Team • Elise Spriggs, Government Affairs • Eric Poklar, Communications • Monica Juenger, Stakeholder Relations Policy Teams “All Cabinet Agencies, Boards and Commissions shall comply with requests or directives issued by OHT, subject to supervision of their respective directors.” Consultant Team “OHT shall contract with state and/or private agencies for services in order to facilitate the implementation and operation of the OHT’s responsibilities.” Stakeholder Partners Prioritize stakeholder communication Michael Colbert (JFS) John McCarthy (Medicaid) John Martin (DODD) Tracy Plouck(ODMH) Orman Hall (ODADAS) Bonnie Kantor (Aging) Dr. Ted Wymyslo(Health) Source: Ohio Governor John R. Kasich, Executive Order 2011-02K (January 13, 2011)

  15. Executive Order • Plan for the long-term efficient administration of the Ohio Medicaid Program and act to improve overall health system performance. In the next six months: • Advance the Administration’s Medicaid modernization and cost-containment priorities in the operating budget; • Initiate and guide insurance market exchange planning; • Engage private sector partners to set clear expectations for overall health system performance; and • Recommend a permanent Ohio health and human services organizational structure and oversee transition. Source: Ohio Governor John R. Kasich, Executive Order 2011-02K (January 13, 2011)

  16. The Vision for Better Care Coordination • Create a person-centered care management approach – not a provider, program, or payer approach • Services are integrated for all physical, behavioral, long-term care, and social needs • Services are provided in the setting of choice • Easy to navigate for consumers and providers • Transition seamlessly among settings as needs change • Link payment to person-centered performance outcomes

  17. Medicaid Hot Spot:Enrollment Spending by Top Managed Chronic Conditions Consumers with TWO OR MORE of the top managed chronic conditions Consumers with ONE of the top managed chronic conditions Consumers without one of the top managed chronic conditions Source: Ohio Department of Job and Family Services. Institutionalized consumers excluded. Based on SFY 2010 total medical cost either by ODJFS or Medicaid managed care plans. Top managed conditions = Diabetes, CAD, CHF, Hypertension, COPD, Asthma, Obesity, Migraine, HIV, BH, & Sub. Abuse.

  18. Ohio Health Transformation Priorities • Improve Care Coordination • Integrate Behavioral and Physical Health • Rebalance Long-Term Care • Modernize Reimbursement www.healthtransformation.ohio.gov

  19. A Case Study in Transformation: Ohio Department of Developmental Disabilities

  20. A Case Study in Transformation: Ohio Department of Developmental Disabilities

  21. Ohio Medicaid Spending per Member per Month by Setting People with developmental disabilities $12,937 $8,473 $5,568 $4,819 $1,418 People with other disabilities or over age 65 $4,463 $4,584 $4,067 $2,058 $1,869 $1,695 $1,356 $530 Other children and parents $298 $254 Source: Ohio Department of Job and Family Services. Includes claims incurred from July 2009 through June 2010 and paid through October 2010; cost differences between institutional and waiver/community alternatives do not necessarily represent program savings because population groups being compared may differ in health care needs.

  22. Ohio Medicaid Residents of Institutions Compared to Recipients of Home and Community Based Waivers Home and Community Based (Aging, JFS, and DD waiver recipients) Facility-Based (NF, ICF/DD, Developmental Center residents) Source: Ohio Department of Job and Family Services; based on average monthly recipients for SFYs 2006-2010.

  23. Medical Hot Spot:Per Capita Health Spending: Ohio vs. US Source: 2004 Health Expenditure Data, Health Expenditures by State of Residence, Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, released September 2007; available at http://www.cms.hhs.gov/NationalHealthExpendData/downloads/res-us.pdf

  24. Medicaid Hot Spot:Per Enrollee Medicaid Spending: Ohio vs. US Source: 2007 The Urban Institute and Kaiser Commission on Medicaid and the Uninsured estimates based on data from Medicaid Statistical Information System (MSIS) and CMS-64 reports from the Centers for Medicare and Medicaid Services (CMS), 2010.

  25. Unused Nursing Home Capacity In 70 counties more than 10% of beds are empty Ashtabula Lake 21.0% Lucas 11.8% Fulton 15.4% Williams 9.2% Ottawa 25.6% Geauga 35.1% 6.6% Cuyahoga Wood 14.1% Sandusky Erie Defiance Henry Trumbull Lorain 14.6% 14.0% 16.4% 19.4% 23.2% 14.5% 13.6% Portage Huron Paulding Summit Seneca Medina 10.8% 14.6% 29.4% 10.4% 14.4% 16.1% Putnam Mahoning Hancock 21.2% 14.8% 9.9% Van Wert Wyandot Crawford Ashland Wayne Stark Richland 17.8% Allen 14.5% 14.7% 11.9% 16.6% Columbiana 14.5% 13.5% 15.6% 12.0% Hardin 21.3% Marion Carroll Auglaize Holmes Mercer Morrow 13.0% 13.8% 18.6% 8.0% 15.9% 21.1% Tuscarawas Knox Jefferson Logan 16.3% Shelby 21.2% 17.1% 12.5% Union Harrison Coshocton 8.0% Delaware 11.9% 9.2% 17.2% 11.2% Darke Champaign Licking 18.5% 31.8% Miami Guernsey 15.7% Belmont 9.6% 20.4% Franklin Muskingum 10.0% Clark 12.6% Madison 10.4% 16.5% 7.0% Noble Montgomery Preble Fairfield Perry Monroe 22.3% Greene 11.5% 9.5% 12.3% 17.8% 8.5% Pickaway 13.4% Morgan 7.2% Fayette 7.2% Hocking Washington 9.2% Butler Warren 13.3% Clinton 10.5% 15.1% 9.8% 19.4% Ross Athens 7.8% Vinton 6.6% Hamilton 25.4% Highland 12.7% 10.5% Meigs Nursing Facility Surplus Pike Clermont 11.7% Jackson 12.0% 11.7% Percentage of total bed days vacant 10.5% Brown Adams Scioto 20.0% 6.6% - 10.4% Gallia 13.6% 12.3% 13.7% 10.5% - 12.5% Lawrence 12.6% - 16.3% 13.5% 16.4% - 23.0% 23.1% - 35.1%

  26. Rebalance Long Term Care • Enable seniors and people with disabilities to live with dignity in the settings they prefer • RECOMMENDATIONS: • Create a Single Point of Care Coordination • Consolidate and Streamline Waiver Programs • Reward Person-Centered Outcomes in Nursing Homes • Expect Greater Efficiency from NF and Waiver Providers • Decrease payments to “hold” empty beds • Reduce the nursing home franchise fee • Saves $427 million all funds over the biennium

  27. Source: 2010 Annual Quality Report, Alliance for Quality Nursing Home Care and American Health Care Association Research suggests that person-centered care is associated with improved organizational performance including higher resident and staff satisfaction, better workforce performance and higher occupancy rates.

  28. Ohio Health Transformation Priorities • Improve Care Coordination • Integrate Behavioral and Physical Health • Rebalance Long-Term Care • Modernize Reimbursement www.healthtransformation.ohio.gov

  29. Balance the Budget • Contain Medicaid program costs in the short term and ensure financial stability over time • RESULTS: • A sustainable system • $1.4 billion in net savings over the biennium • Align priorities for consumers (better health outcomes) and taxpayers (better value) • Challenge the system to improve performance (better care and cost savings through improvement)

  30. Total Ohio Medicaid Expenditures, SFY 2010 Source: Ohio Department of Job and Family Services and the Governors Office of Health Transformation. Managed care expenditures are distributed to providers according to information from Milliman. Hospitals include inpatient and outpatient expenditures as well as HCAP Home and community services include waivers as well as home health and private duty nursing.

  31. Medicaid Budget:Savings and Investments in millions Source: Office of Health Transformation (March 15, 2011)

  32. Medicaid Budget:Impact on Rates by Provider Estimated change in rate Source: Office of Health Transformation (March 15, 2011)

  33. What this budget does NOT do • Does not cut eligibility • Does not cut optional services, including dental • Does not make arbitrary across-the-board cuts • Does not resort to smoke and mirrors • Does not count hypothetical savings

  34. Thank you. Greg Moody, Director Governor's Office of Health Transformation 77 South High Street, 30th Floor Columbus, Ohio 43215 Phone: 614-752-2784 Email: greg.moody@governor.ohio.gov

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