Took Seven Years, But Feds Finally Approve a State Plan to Rein in Some Medical Spending

Plan Will Integrate Medicaid and Medicare for Patients Eligible for Both Programs

Gov. Christine Gregoire is flanked by Robin Arnold Williams, secretary of the Department of Social and Health Services, and Mary Anne Lindeblad, director of the state Health Care Authority.

OLYMPIA, Oct. 26.—Gov. Christine Gregoire Thursday announced that one of her big health reform plans – vintage 2005 – has finally won federal approval, demonstrating perhaps just how hard it is to wring big savings from public medical assistance programs.

The federal Department of Health and Human Services has given the green light to a plan that will integrate services for patients who are eligible for both Medicaid and Medicare programs. Ultimately it will establish “medical homes” for 115,000 elderly and disabled Washington residents who receive benefits under the two programs. It is expected to save the state $14 million over five years, and if all goes as the state hopes, will boost the quality of care patients receive.

But one of the lessons, Gregoire said, is that big changes in government health care programs are not quickly and easily done – a lesson for those who think big savings can be achieved in a snap. “You can’t just change the system overnight,” she said. “You have to do it right or the chances of your success are limited. So I am encouraged by the talk of how we are going to drive down costs and drive up quality, and I’m hearing it on the campaign trail. It just won’t happen overnight.”

State Will Monitor

Under the plan, dubbed HealthPath Washington, the state will monitor and manage the treatment of patients who are eligible for both programs, many of whom suffer chronic illnesses and are among the state’s highest-need patients. The goal is to eliminate duplicative procedures and prescriptions. The dual-eligibles represent about 13 percent of the state’s Medicaid recipients, but consume about 30 percent of the program’s spending. About 30 percent of the dual-eligibles will be enrolled in the program starting in April.

Here’s what it means. Gregoire said she had an aunt, now deceased, whose cancer treatment was covered by both programs.  Medicare steered her to one set of doctors and one set of prescriptions, and Medicaid steered her to other doctors and other prescriptions, and the governor’s bewildered relative wound up hospitalized for adverse drug interactions. “My aunt did not need to go to the hospital. The lack of coordinated care threw her into the hospital. That hospitalization cost a lot of money — she was there several days. That’s what this is intended to avoid.”

Coordination of the two government medical-assistance programs might seem a no-brainer, Gregoire said, but it wasn’t easy putting it over.

Whiteboard to White House

It took years of lobbying by state governments, and Gregoire herself took a lead role in the effort as president of the National Governors Association. At one point she said she brought her whiteboard to the White House and so that she could diagram the way the programs worked, or rather, didn’t. “It isn’t that easy to move the bureaucracy to be perfectly honest with you, and the bureaucracy is in Washington D.C. But I want to credit them. This is the first [administration] ever to step off the curb and say let’s tackle this problem, let’s open up the doors to coordinated care, let’s share savings.”

In the past, Medicaid and Medicare haven’t talked to one another, Gregoire said. Medicare is a federally managed program, whereas Medicaid is jointly funded by the state and the feds and is managed on the state level. Just getting the feds to share Medicare data was a victory, she said. The state has integrated Medicare data into a clinical decisionmaking tool that will be used in managing care.

Some elements of the program already have been tested in Washington, including disease and chronic care management programs that aim to provide support for patients with conditions like heart disease and diabetes. The thinking is that intensive support might prevent patients from getting sicker and requiring more expensive care. Washington was one of 15 states authorized last year to develop plans to coordinate the two programs, and the second to win final approval, after Massachusetts.