Modernizing Medicare, Medicaid Could Reduce Debt and Improve Care for Dual Eligibles

Modernizing Medicare and Medicaid could improve patient health and save the federal government $542 billion over the next ten years, according to a new report by UnitedHealth Group’s Center for Health Reform & Modernization.

Lawmakers have come up with a third strategy for modernizing healthcare and improving patient outcomes, as current debates on entitlement reform rage on, officials say. The strategy involves adopting best practices as an alternative to simply cutting benefits or provider payments. Savings could include up to $202 billion in Medicare, and up to $157 billion for dual eligibles, amounting to up to $542 billion in Medicare and Medicaid spending over the next 10 years, officials say.

Around 75 percent of the nation’s roughly $1 trillion of Medicare and Medicaid annual spending still relies on outdated indemnity-style benefits and siloed FFS provider reimbursement. This alternative strategy involves unlocking savings through applying best practices for improved prevention, care coordination and payment reform to Medicare and Medicaid.

The report provides a menu of individual savings options, as well as a combined estimate of net savings from comprehensive Medicare and Medicaid modernization. They include the following:

  • Making health programs and incentives similar to those used by large self-insured national employers available to seniors in traditional Medicare.
    This would include transparent information about high-quality and efficient providers, with opportunities and incentives for consumers to share in savings from making smart choices. The federal government could save $202 billion by providing care management services to seniors enrolled in traditional FFS Medicare who are not also Medicaid-eligible. This approach would transform the traditional FFS Medicare program by adopting administrative support services similar to those used by many large self-insured employers.
  • Expand the use of coordinated care for dual-eligible Medicare and Medicaid beneficiaries.
    Full integration of Medicare and Medicaid benefits for the dual-eligible population could yield savings of $153 billion for the federal government. Under this approach, all states would enroll their dual-eligible beneficiaries in managed health plans. A health plan or other similar entity (such as an ACO) would receive two payment streams — one from the federal government (Medicare) and one from the state (Medicaid) — which would then be blended together.
  • Provide coordinated care for all Medicaid enrollees.
    The federal government could save $30 billion if all states adopted comprehensive managed care for their FFS Medicaid enrollees. Many states already have turned to Medicaid managed care and realized significant savings and better outcomes.
  • Accelerate programs to improve health, particularly diabetes initiatives.
    By adopting innovations that already have been proven to prevent and control pre-diabetes and type 2 diabetes, the federal government could save an additional $53 billion. These solutions include interventions aimed at preventing type 2 diabetes among high-risk populations and providing greater support to help patients with type 2 diabetes control their weight and manage their condition.

To read the full report, click here.

Source: UnitedHealth Group, January 9, 2013

Care Coordination for Dual Eligibles: A Results-Oriented Approach

Care Coordination for Dual Eligibles: A Results-Oriented Approach provides details on SCAN Health Plan’s strategic approach to serving the dual eligible market from Dr. Timothy Schwab, chief medical officer.

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