A disproportionate share of U.S. healthcare spending is focused on a relatively small number of people, many with multiple chronic diseases. This is especially true for Medicaid, the health insurance program for people with low income. Just 5 percent of Medicaid beneficiaries account for more than half of all Medicaid spending, and 1 percent account for 25 percent of total spending, according to an analysis of national Medicaid spending.
So, if you want to improve health outcomes for Medicaid recipients and hold the line on state Medicaid spending, it makes sense to improve care for high-cost, high-needs patients, many of whom live in New Jersey’s poor, urban communities.
Last week, the state of New Jersey took a major step toward that goal by certifying community-based healthcare coalitions in Newark, Camden, and Trenton, to coordinate healthcare and social services for Medicaid recipients as part of the Medicaid Accountable Care Organization (ACO) Demonstration Project.
New Jersey’s approach to Medicaid ACOs is ground up and community driven. The Medicaid ACOs are nonprofit coalitions of community-based medical, behavioral health, and dental providers, social service organizations, and residents formed to address holistically the complex health and social-service needs of Medicaid patients.
If the new Medicaid ACOs can improve outcomes and reduce costs to New Jersey’s Medicaid program, they will get to keep a share of any Medicaid savings. This provides a financial path to keep the Medicaid ACOs operating, innovating and improving care. These ACOs hold great promise for transforming how healthcare is delivered to the state’s poor and underserved patients, while also ensuring that taxpayers’ money is spent effectively.
The long-awaited Medicaid ACOs are the result of a 2011 law signed by Gov. Chris Christie that drew on the groundbreaking work of Dr. Jeffrey Brenner and the Camden Coalition of Healthcare Providers.
As famously documented in The New Yorker, Brenner analyzed hospital records and discovered that the same patients visited Camden hospitals dozens of times, even hundreds of times, at enormous cost. Brenner and the Camden coalition worked to limit their costly hospital visits by linking these patients with community-based primary care and coordinated social and economic support.
Many organizations across New Jersey have worked to facilitate the development of Medicaid ACOs. The Nicholson Foundation itself has invested more than $10 million over the past several years to foster the development of Medicaid ACOs by funding a range of interrelated projects, including those with the Rutgers State Health Policy Center, the Center for Health Care Strategies, the New Jersey Health Care Quality Institute, the Camden Coalition of Providers and the Trenton Health Team.Our support will continue. We will provide financial assistance, education, and technical expertise to both the Medicaid ACOs and to the community-based health care coalitions that did not receive the Medicaid ACO certification today but who are committed to working to improve healthcare in their communities. We will also co-fund with the federal Agency for Healthcare Research and Quality an evaluation of the New Jersey Medicaid ACOs Demonstration Project to be conducted by the Rutgers State Health Policy Center.
It is called a “demonstration project” for a reason. There are bound to be bumps on the road ahead. But what we do know is that the road we are on isn’t taking us where we want to go -- to more accessible, affordable and higher-quality healthcare for some of New Jersey’s most vulnerable residents.
During the depths of the depression, Franklin Roosevelt said, “The country demands bold, persistent experimentation. It is common sense to take a method and try it. If it fails, admit it. But above all else, try something.” That time has come for New Jersey. We should rally behind these communities to help them succeed, learn from them, and then spread what works. The need is urgent.