Study: Large savings elusive in state dual eligibles demonstrations

As the federal government evaluates state demonstrations for providing Medicare-Medicaid eligible Americans with better, more cost-effective care, a new study suggests that large savings will be elusive without specialized models and some improvisation.

In a report commissioned by the Kaiser Family Foundation, Randall Brown and David Mann from Mathematica Policy Research culled prior evidence on dual eligible pilot programs and care management programs for high-risk Medicare patients.

They found some patterns of success for improved care, reduced hospitalizations and cost savings, but overall, the evidence on dual eligible programs that’s available today is sketchy, they noted in their report, with “typically modest” savings among even the more successful models.

However, they noted, some evidence does suggest modest savings are achievable.

Personalized care based on health conditions, age, mobility and other factors, is one key to successful programs studied, the authors found, because there’s considerable variability even among patients with similar chronic conditions.

Frequent in-person and over-the-phone contact with case managers, nurse practitioners or community organizations, along with motivational interviewing, education programs and pharmaceutical management assistance has been shown to help reduce hospitalization and possibly yield savings, the study found.

With costs around $300 billion a year, care for dual eligible patients is one area where the federal government hopes to find cost savings under the Affordable Care Act.

The Centers for Medicare & Medicaid Services is currently reviewing state applications for dual eligible demonstration programs. Eighteen states want to test the capitated model, five want to test managed fee-for-service and three want to test both. So far CMS has approved Massachusetts’ capitated model, with community organizations acting as patient-centered medical homes, and Washington state’s fee-for-service coordinated care plan.

[See also: Massachusetts launches dual eligibles demonstration plan.]

Among the capitated managed care models that were studied for the report, the Program of All-Inclusive Care for the Elderly (PACE), EverCare Hospice and Palliative Care, Minnesota Senior Health Options and the Wisconsin Partnership Program brought reduced hospitalizations, although they didn’t necessarily lead to cost reductions because the demonstration’s payments were set higher than normal.

Created in 1997, PACE has been considered an effective intervention program, but Brown and Mann found that while it has been shown to decrease hospitalizations by blending acute and long-term care, it hasn’t led to lower Medicare expenditures for seniors with significant long-term care needs.