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.

Woman in wheelchair in community

 

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.

Hospital

 

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.

Trailblazer

 

3. The number of truly well-integrated programs that take disabled dual-eligibles is small.

Many health industry players have complained that the number of truly well-integrated accountable care organizations is small, and that the number of private health insurance exchanges that meet a strict definition for the term “exchange” is small.

The GAO analysts see similar types of barrier — resistance to true integration, and resistance to crossing boundaries to help new types of patients — affecting the ability of disabled dual-eligibles to get access to the plans that seem most likely to improve the quality of their care and control the cost.

Truly well-integrated dual-eligible managed care plans are about four times as likely to be high-quality plans as less integrated plans, but the GAO found that few well-integrated plans serve young, disabled dual-eligibles.

See also: Medical homes don’t reduce ER visits

Capitol

 

4. Older, high-quality care coordination programs show little potential for saving money, whether or not they take disabled dual-eligibles.

The GAO analysts found that, in 2013, only 3 of the 14 plans in an older category of care coordination plans — FIDE-SNPs — bid with prices below what the traditional Medicare program thought it would spend on the enrollees.

None of the older dual-eligibles plans that take disabled dual-eligibles submitted a bid with a price below the traditional Medicare program spending market, Cosgrove writes.

On average, the bids for the high-quality dual-eligibles plans were 3 percentage points higher than the traditional Medicare spending benchmark, Cosgrove writes.

Image: U.S. Capitol (AP photo/Jacquelyn Martin)

See also: A Medicare Market Niche – Health Plans for Seniors with Special Needs

Blood tests

 

5. Better health outcomes did not reduce acute care costs.

Commercial wellness program and care management program managers have faced the problem that, even if improving the quality of care does cut care costs, it might not have a noticeable effect on acute care costs for years, or on LTC costs for decades.

In the dual-eligibles plan market, there’s still no firm data showing that successful efforts to improve the quality of care translated into lower medical services costs, Cosgrove writes.

Integrated plans have gotten somewhat better health outcomes results for disabled dual-eligibles than traditional Medicare Advantage plans have, but ordinary dual-eligibles and those with six or more chronic conditions were about as likely to enter the hospital, and return to the hospital soon after leaving it as comparable enrollees in traditional Medicare Advantage plans, and they were more likely to go the emergency room.

The results suggest that officials’ “expectations regarding the extent to which integration of benefits will produce savings through lower use of costly Medicare services may be optimistic,” Cosgrove writes.