Sponsors Reintroduce Social Innovation Act, Hope to Ease Burden on Health System

Tara Nurin | March 6, 2014 | Health Care
Pilot program would combine public and private funds to help educate Medicaid patients, reduce revolving-door visits to emergency rooms

Assemblyman Angel Fuentes (D-Camden).
During his budget address last week. Gov. Chris Christie spoke of the need to reduce unnecessary repeat hospital visits by patients receiving Medicaid and Family Care. So sponsors of a bill that seeks to raise private money for programs designed to eradicate such overuse are confused as to why the governor pocket-vetoed their legislation just five weeks earlier.

“Maybe the governor thought the Economic Development Authority (EDA) would be overwhelmed,” said primary sponsor Angel Fuentes (D-Camden), speaking of the agency that would funnel funds to the nonprofits selected to develop and administer the programs. “Or maybe with his inauguration coming up in the middle of the (George Washington) bridge fiasco, he didn’t have time to sit down with his lawyers and really look at whether this would be a good law.”

Whatever the explanation, Fuentes and his co-sponsors in the Assembly and Senate have now reintroduced the same bill for reconsideration. After seeing the original bill pass overwhelmingly in both chambers last session before getting blocked by the governor, Fuentes says that this time he feels “confident about it.”

The “Social Innovation Act,” would create a five-year pilot program in which the EDA would guarantee $15 million in loans from investors, foundations, and corporations that want to fund nonprofits interested in teaching “super-utilizers” of the healthcare system to access more stable, preventative, and comprehensive care.

If the state’s healthcare agencies realize savings from the initiatives, the investors recoup their money. If not, they don’t. If the measure is adopted, it would make New Jersey the first state to use this social financing mechanism to solve healthcare financing problems.

“The highest costs in Medicaid and Family Care come from individuals with chronic emergency room visits, repeat inpatient stays, and those who face complex medical conditions,” pronounced Christie in his budget address.
According to the governor, more than 16,000 Medicaid recipients visited emergency rooms six or more times last year, In the same year, five percent of Medicaid recipients accounted for 50 percent of the costs.

In his address, he called on Rutgers University and Newark’s University Hospital to “innovate and improve healthcare delivery under Medicaid and Family Care.”

Specifically, he asked Rutgers to broaden its work for the federal government on controlling Medicaid costs and managing super-utilizers’ healthcare to include New Jersey – a request that Joel Cantor, director of Rutgers’ Center for State Health Policy, says he’ll heed.

“This is something we have been working on for years and the high-level policy interest energizes us,’’ Cantor told the Rutgers Today university news webpage.

Cantor says the center will help the state evaluate Medicaid initiatives and help launch and analyze the much-touted Accountable Care Organization (ACO) pilot program, which explores the ways coordinated care can lower costs and keep patients from unduly overburdening the system.

Dr. Jeffrey Brenner, executive director of the Camden Coalition of Healthcare Providers and recent winner of a MacArthur “genius” grant for his work building an integrated health delivery model to provide better care at a reduced cost, supports the social innovation act as a way to reward successful implementation of ideas.

“When I look at Camden, all I see is obsolete schools, obsolete sewers, obsolete healthcare. American society is full of obsolete systems that we inherited from the last century,” he said. “We need to reevaluate how a lot of parts of government work and then galvanize the nonprofit and private sectors to innovatively contribute.

“There may be a special place in heaven for people who save the government money but often in government programs there’s no reward for success.”

States like New York and Massachusetts are using social financing to combat problems in homelessness and prison recidivism. Fuentes says he plans to introduce some amendments when his bill gets a hearing in committee that will expand his proposed healthcare delivery program to other social ills. His current bill also provides for a study commission and annual progress checks.
Representatives from Christie’s office did not return a request for comment.