Insurers and employers are hoping wellness programs and condition management programs for working-age people and children will help improve the quality of health care over time and hold down the costs.
The Obama administration is hoping ambitious coordination programs — efforts to integrate Medicare medical care benefits with Medicaid acute care and long-term care (LTC) benefits — will hold down the budget-busting cost of care for the federal government.
The Patient Protection and Affordable Care Act (PPACA) recently created a new type of private plan for disabled “dual eligibles” — the 4 million U.S. residents who are eligible for both Medicare and Medicaid and are also younger than age 65. In 2009, Medicare and Medicaid spent a total of $103 billion just on young, disabled dual-eligibles. PPACA also encourages experimentation with other types of care coordination programs.
The “dual-eligible special needs plan” (D-SNP) program is supposed to create a managed care plan that can get past the traditional division between acute care and long-term care and save money both by cutting through layers of bureaucracy and by keeping acute medical care problems from destroying people’s ability to handle the activities of daily living.
Now analysts at the U.S. Government Accountability Office (GAO) have taken a hard look at the potential of D-SNPs and other care coordination programs to reduce costs for severely disabled enrollees who happen to be under age 65. The officials have warned that, whatever else the programs do, they may not yield huge cost savings.
Here’s a look at five reasons GAO officials believe the financial impact of integrating benefits for the disabled dual-eligibles may be disappointing.
1. For the costliest dual-eligibles, the big spending is on long-term care (LTC).
The insurers that issue private long-term care insurance (LTCI) and the producers who sell it try to make the point that about half of the users of long-term care services are under 65.
When the GAO analysts looked at the dual-eligibles who rank in the top 20 percent in terms of total expenditures, they found that they accounted for about 60 percent of all spending on dual-eligibles, James Cosgrove, a GAO director, writes in a summary of the GAO’s findings.
About 63 percent of the spending was on Medicaid, and about 52 percent of the Medicaid spending for the high-expenditure disabled dual-eligibles was for those using community-based LTC services. Many of those dual-eligibles have relatively modest acute care costs to manage.
2. Disabled dual-eligible beneficiaries typically have many chronic conditions.
The GAO analysts found that the disabled dual-eligibles who did have high Medicare expenditures often had many serious conditions at the same time.
About 35 percent had six or more chronic conditions, and 25 percent had three or more mental health conditions.
Among dual-eligibles with high Medicaid expenditures, rather than high Medicare expenditures, just 14 percent had six or more chronic conditions and just 13 percent had three or more mental health conditions.
For those enrollees, simply managing acute care was more likely to hold down costs than combining management of acute care and LTC costs.