The MaineCare Redesign Task Force impaneled earlier this year fell short of its immediate goal of identifying $5.25 million in savings for the current fiscal year. If the group’s proposals to achieve short-term savings gain approval from the Maine Legislature and federal officials, they would save the state about $1.35 million this fiscal year, providing little relief to state officials seeking to close an estimated $100 million hole in the current MaineCare budget.
However, the task force’s 71-page draft report released last week does offer several realistic recommendations to achieve more than $35 million in savings during the next two fiscal years. Among them are tighter controls on funding approval for elective procedures, such as C-sections, high-cost imaging services, psychiatric care for children and some medications.
A proposal to save MaineCare funding in the short term by cutting payments to nursing homes that hold a bed for residents who are hospitalized runs counter to the report’s overriding theme: Eschew quick fixes and instead produce “coordinated, quality services for Maine’s most vulnerable citizens” and foster “effective and efficient use of services.”
Ensuring that nursing home residents know where they will live after a hospital stay represents sound fiscal and medical policy. The proposal to eliminate nursing home “leave” payments, which aims to save $160,000 in this fiscal year and $640,000 in each of the next two, should not make it from the draft to the final report.
Two recommendations that would add short-term costs — the reinstitution of coverage for smoking-cessation and some dental services — demonstrate the task force’s acknowledgment that preventing unhealthy behaviors and treating minor conditions before they require emergency care will help contain overall health care costs.
More important than any specific cost-reduction proposal is the report’s call for a structural overhaul that would shift the way MaineCare pays for services to an outcome-based system, less prone to cost spikes that have become annual budgetary headaches in recent years.
The nine-member panel recognized that the need for medical services, especially among people with acute and chronic disabilities, doesn’t go away if government stops paying for them. With 5 percent of the MaineCare caseload accounting for 54 percent of overall spending, finding a more cost-effective way to pay for their care would address the system’s budgetary problems more directly than tightening standards with the intent of denying eligibility to individuals whose reliance on the system consists mainly of health maintenance and preventive care.
The draft report identifies the 5 percent of MaineCare recipients who account for 54 percent of the spending as being “primarily between the ages of 18 to 44, in the SSI disability category with a diagnosis of developmental disability.” The next most expensive 5 percent of enrollees are also primarily between the ages of 18 and 44 with long-term developmental disabilities, according to the report.
The average annual cost per recipient for the top 5 percent exceeds $68,000. The average annual cost per person for the next 5 percent is more than $21,000. For the next 10 percent, the average annual cost is about $9,200. For the remaining 80 percent, the average annual per-person cost is $937.
Those figures provide evidence that different approaches are necessary to account for the complexity of different populations, as the report states.
The task force recommends further study of separate care management programs for the 20 percent of the MaineCare caseload with the most pronounced needs, with a goal of balancing quality care with greater budget certainty. It suggests monitoring initiatives in 16 other states for models that convert fee-for-service payments for individuals, whose medical conditions require the most expensive coverage, to more predictable payment- and care-management systems.
The need to address factors driving the cost of MaineCare beyond sustainable levels is urgent, but, as the report makes clear, the bulk of those costs derive from care for people with severe disabilities. As state officials move ahead with plans to reform MaineCare, the task force provides a compassionate reminder that their focus must be on “aggressive care management to slow the progression of chronic diseases and avoid unnecessary hospitalization and institutionalization,” home- and community-based care, support for family caregivers and assistive technology.
Meanwhile, continued exploration of and conversion to programs that incentivize prevention and primary care for the 80 percent of MaineCare recipients without acute needs represents an investment in public health now that offers a reasonable expectation of future cost-containment.