State Options to Control Health Care Costs and Improve Quality

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State Options to Control Health Care

Costs and Improve QualityBy Zeke Emanuel, Joshua Sharfstein, Topher Spiro, and Meghan O’Toole April 2016


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State Options to ControlHealth Care Costs andImprove Quality

By Zeke Emanuel, Joshua Sharfstein, Topher Spiro, and Meghan O’Toole

April 2016


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1 Introduction and summary

4 Establish a cost growth goal

7 Publish a health and cost outcomes scorecard

9 Adopt payment and delivery system reform goals

11 Implement bundled payments for all payers

13 Institute global budgets for hospitals

15 Launch all-payer claims databases

18 Expand evidence-based home visiting services

21 Improve price transparency

23 Integrate behavioral health and primary care

27 Combat addiction to prescription drugs and heroin

33 Improve the delivery of long-term care

36 Align scope of practice with community needs

38 Institute reference pricing in the state employee plan

40 Expand the use of telehealth

42 Decrease unnecessary emergency room use

44 Conclusion

47 Endnotes

Contents


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1 Center for American Progress | State Options to Control Health Care Costs and Improve Quality

Introduction and summary

Te recen debae on healh care reorm has occurred mosly a he naional level.

Te Affordable Care Ac, or ACA, was a momenous change or he U.S. healh

care sysem. So ar, 20 million people have gained healh insurance coverage

due o he ACAa hisoric reducion in he number o uninsured people in he

Unied Saes.1

Te ACA also conained several ools designed o conrol healh care coss. I

creaed he Cener or Medicare & Medicaid Innovaion, or CMMI, which isauhorized o es new paymen and delivery mehods in order o lower coss and

improve qualiy or individuals who receive benefis rom Medicare; Medicaid;

or he Children’s Healh Insurance Program, or CHIP.2 CMMI is currenly esing

and evaluaing many differen models, including accounable care organizaions,

bundled paymens or hip and knee replacemens, and primary care medical

homes. Te ACA also reduced Medicare paymens o Medicare Advanage plans;

o hospials wih poor qualiy measures; and o medical providers, which has had

a spillover effec on privae insurance.3

Parly due o he ACA, healh care cos spending growh has slowed in recen

years. Beore 2014, here were five years o hisorically low growh, and 2011

was he firs ime in a decade ha spending on healh care grew slower han he

U.S. economy.4 Healh care coss are sill projeced o grow aser han he overall

economy, however, and healh care spending already pus remendous pressure on

sae and ederal budges and limis spending on oher imporan services.5 More

needs o be done o susain his slowdown in growh.

Te curren poliical environmen makes i unlikely ha reorms o conrol sys-

emwide healh care coss will be achieved a he ederal level in he near uure.Saes, however, are well-posiioned o ake he lead on implemening cos conrol

and qualiy improvemen reorms. Indeed, many saes are already innovaing and

seeing posiive resuls.


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Tere are several advanages o implemening reorms a he sae level. Sae-level

reorms can be ailored o work bes or each sae, depending on he srucure o

is insurance markes, he size o he sae, and is demographics. Saes also have

considerable auhoriy over he regulaion o healh insurance and he provision o

healh care wihin heir borders. Saes conrol heir own insurance markes: Tey

run heir Medicaid and CHIP programs and sae employee plans, and cerainsaes run he exchanges or individual healh insurance. Saes also conrol he

rae review process, scope-o-pracice regulaions, physician licensing, anirus

laws, and provider and insurer regulaions. Lasly, saes and governors have con-

siderable convening power o bring ogeher diverse sakeholders, making reorm

effors more poliically easible.

Te innovaions ha some saes are implemening o reduce coss while main-

aining or improving qualiy can and should be replicaed by oher saes. Tis

repor lays ou a comprehensive summary o opions, as oulined in he ollow-

ing able, ha saes can choose rom o improve he qualiy and susainabiliy oheir healh care sysems. Generally, hese opions relae o implemening new

paymen models, increasing accounabiliy and ransparency, collecing more

daa, increasing he use o high-value services and pracices, and removing barri-

ers o effecive pracices.

We have included examples rom some o he mos pioneering saes and oher

examples where saes are insiuing similar reorms, as well as deails rom hese

saes’ experiences and heir sraegies o make he reorms successul. Tese

examples are no an exhausive lis o all he saes ha may be underaking hese

reorms. Oher ideas and sraegies have no been used beore. Imporanly, hese

reorms are no muually exclusive; in ac, saes should adop as many as possible.

All o hese reorm opions would help saes slow he growh o healh care coss,

improve he qualiy o heir healh care sysems, and proec heir residens.


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Policy options and selected state examples

Establish a cost growth goal.

• Examples from Massachusetts, Maryland, and Rhode Island

Publish a health and cost outcomes scorecard.

• Examples from Maryland and Oregon

Adopt payment and delivery system reform goals.

• Examples from Massachusetts, Maryland, Rhode Island, and

California

Implement bundled payments for all payers.

• Examples from Arkansas, Tennessee, Ohio, and Delaware

Institute global budgets for hospitals.

• Example from Maryland

Launch all-payer claims databases.

• Examples from Maine, Colorado, New Hampshire, and Washington

Expand evidence-based home visiting services.

• Examples from Minnesota and South Carolina

Improve price transparency.

• Examples from New Hampshire and Massachusetts

Integrate behavioral health and primary care.

• Examples from Oregon, Washington, and Colorado

Combat addiction to prescription drugs and heroin.

• Examples from Maryland, Florida, New York, and Rhode Island

Improve the delivery of long-term care.

• Examples from California, Maryland, Montana, Oregon, Texas

and Missouri

Align scope of practice with community needs.

Institute reference pricing in the state employee plan.

• Example from California

Expand the use of telehealth.

• Examples from Maryland, New York, Virginia, the District of

Columbia, and Pennsylvania

Decrease unnecessary emergency room use.

• Examples from Georgia, New Mexico, Indiana, Minnesota,

Washington, and Wisconsin


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Establish a cost growth goal

A cos growh goal conrols healh care coss by seting a cap on he growh o a

sae’s per capia healh care spending. ypically, his cap is deermined by per

capia growh in he sae economy, as measured by he gross sae produc, or

GSP. Tese goals represen a public commimen o hold healh care coss below

a se arge, increasing accounabiliy or all sakeholders. Even i a goal does no

have sancioning power or fines i i is exceeded, i has a powerul impac. Because

saes rack heir goal and repor on progress, seting goals increases ransparency

and improves daa collecion.

In 2012, Massachusets became he firs sae o esablish a cos growh goal. I

enaced legislaion ha limis he annual percenage growh in oal healh care

spending o growh in he sae economy, adjused o remove flucuaions due o

business cycles. Massachusets calculaes oal healh care expendiures using hree

componens: all medical expenses paid o providers by all public and privae pay-

ers; all paien cos-sharing amouns; and he ne cos o privae insurance, such as

adminisraive expenses. Te sae hen compares ha oal o he poenial GSP

o he commonwealh.6 Tis reorm coninued he effors o he sae’s 2006 healh

care legislaion, which ocused on coverage expansion, and 2008 legislaion ha

auhorized he collecion o deailed inormaion rom healh care organizaions.7

Massachusets’ 2012 legislaion creaed he Healh Policy Commission, or HPC,

o esablish and monior he cos growh arge, as well as he Cener or Healh

Inormaion and Analysis o collec healh care daa.8 Each year, he HPC ses he

sae’s healh care cos growh benchmark and moniors he perormance o all

hospials, physician groups, accounable care organizaions, and payers. Te HPC

noifies hose eniies i hey have exceeded he cos growh goal and can require

hem o implemen perormance improvemen plans.9

Te HPC also conducsreviews o mergers and acquisiions and issues annual repors and cos reviews o

inorm he public.


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Massachusets was able o build consensus or a cos growh goal and greaer

ransparency in healh care coss largely because providers preerred hose

reorms o he sronger regulaory sysem ha he sae had iniially proposed.10

Alhough Massachusets did no mee is cos growh arge or 2015, he moni-

oring and daa collecion enabled i o ideniy ha i had ailed he arge, and

no meeing he arge is galvanizing effors or addiional and sronger reorms oconrol coss.11

In January 2014, Maryland also se a cos growh goal in agreemen wih he

Ceners or Medicare & Medicaid Services, or CMS.12 Maryland’s goal builds

upon he sae’s unique all-payer rae seting sysem or hospialsmeaning ha

all payers pay he raes ha are se or each hospialha he Maryland legislaure

esablished in he early 1970s.13 Te goal limis all-payer annual per capia hospi-

al growh, including inpaien and oupaien care, o 3.58 percenhe 10-year

compound annual growh rae in per capia GSP.14 Maryland will also limi annual

Medicare per capia hospial cos growh o a rae lower han he naional annualper capia growh rae or he years 2015 hrough 2018. Te sae has pledged o

achieve hese goals by ransiioning o new paymen models, as well as by imple-

mening several oher iniiaives o lower coss and improve qualiy. For example,

he sae commited o reducing is Medicare readmission rae and is rae o

hospial-acquired condiions.15

Recenly, Rhode Island’s Working Group or Healhcare Innovaioncharged

wih proposing soluions o improve healh, enhance paien experience, and

reduce per capia cossincluded a flexible spending arge as one o is our

primary recommendaions or conrolling healh care spending.16 Tis would

be a nonbinding, annual arge or growh in medical expendiures se a no

greaer han Rhode Island’s long-erm economic growh rae. Te working group

endorsed a flexible arge over a hard cap on healh care spending growh, which

also had been considered bu was deermined o be unnecessary unless healh care

cos growh remains oo high. Te group also recommended ha Rhode Island

regularly calculae and publicize oal medical expenses or he sae, hold hearings

o undersand healh care cos growh, and reques perormance improvemen

plans rom payers or providers i heir coss are increasing unsusainably.


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Options for implementation

Oher saes should se similar cos growh arges and monior and enorce he

goals hrough eiher exising resourcessuch as sae healh commissionsor by

orming a new eniy. Tis reorm would send a srong signal ha governors and

saes are commited o aking acion o reduce healh care coss; i also would norequire a large amoun o unding and could be esablished quickly. For a governor

looking or a simple bu effecive reorm, seting a cos growh goal would be a

good choice.

Sae governmens have muliple opions or implemening and phasing in a cos

growh goal. Firs, a sae could ollow Massachusets’ and Maryland’s example

bu provide more cushion in he firs ew years. Te arge or per capia healh

care cos growh, or example, could be se a growh in he per capia GSP plus

an addiional 0.5 percen over he firs hree years, hen rache down o mach

he growh in per capia GSP in subsequen years. Second, saes have choices orhe ype o healh care coss included in heir goals. Tey could begin by seting

he arge or he cos o hospial care or hree years and hen expand he goal o

cover he oal cos o care in laer years.

A sae also could negoiae an agreemen wih he ederal governmen o share

he significan ederal savings ha meeing he goal would bringan idea ha he

Cener or American Progress has previously proposed.17 I saes mee a arge or

growh in oal healh care spending per capia, he ederal governmen also would

realize savings in Medicare, Medicaid, Affordable Care Ac subsidies, and oher

ederal healh care programs. Tereore, a sae could negoiae an agreemen wih

he ederal governmen, under a waiver wih CMS, o share 50 percen o he ed-

eral savings ha would occur i he sae mees he cos arge while also meeing

qualiy measures. Tis increased savings o he sae could help ge buy-in rom

he legislaure and oher sakeholders or he cos growh goal.

I esablishing a cos arge wih enorcemen auhoriy hrough legislaion is no

possible, a governor could esablish a nonbinding cos growh goal o pu pres-

sure on hospials and providers o hold down cosslike Rhode Island did. In

his way, he governor would use convening auhoriy and he power o he bullypulpi o shine a public spoligh on excessive providers and encourage volunary

compliance wih he arge.


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Publish a health and cost

outcomes scorecard

Publishing a sae scorecard on healh and cos oucomes is anoher simple bu

imporan iniiaive ha all saes should insiue. Tis reorm would require only

limied unding and could be accomplished absen new legislaion bu would

emphasize ha he sae is ocused on addressing healh and cos issues. A score-

card would enable sae sakeholders o undersand he curren sae o he sysem

and le he sae publicly rack progress oward goals, increasing he accounabiliy

o providers, payers, and oher sakeholders. Saes also could use he scorecard as a

managemen dashboard or heir highes prioriies. Addiionally, saes would havehe opion o build on he saewide scorecard by publishing similar, more specific

scorecards wih relevan measures or individual hospials and physician groups.

A poenial lis o measures or a sae scorecard is shown below; oher liss

which overlap somewhahave been recommended recenly by he Insiue o

Medicine and implemened in Maryland and Oregon.18 Such measures would pro-

vide an excellen assessmen o he healh o he sae’s populaion as well as he

qualiy and affordabiliy o care delivered o residens. Addiional measures could

be added and exising measures could be updaed over ime o reflec he sae’s

prioriies. In general, measures should be undersandable, measure broad sysem

impac, and be validaed and readily available.

o he exen possible, measures should show rends over he previous five years

and should be broken down by couny, race and ehniciy, and socio-economic

saus. For each measure, saes should adop boh absolue argesperormance

compared wih he naional median or 75h percenileand improvemen ar-

ges, in erms o percenage change.

A public commen period can help wih public engagemen and accepance o hemeasures. When Maryland esablished a scorecard in 2011, more han 350 public

commens were received. Te sae now makes daa on is measures available on

an ineracive websie, wih daa broken down by couny and by race and ehniciy

where possible.19


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Health measures

• Life expectancy

• Rate of infant mortality

• Rate of age-adjusted mortality fromheart disease

• Rate of age-adjusted mortality

from cancer

• Rate of diabetes

• Rate of clinical depression

• Rate of children and adults who are

overweight and obese

• Rate of births with low weight

• Rate of preterm birth

• Self-reported well-being

System quality measures

• Rate of immunization for children

• Rate of influenza immunization

• Rate of hospital-acquired infections• Rate of avoidable hospitalizations (for

diabetes, chronic obstructive pulmo-

nary disease, congestive heart failure,

and asthma)

• Rate of hospital readmission

• Rate of tobacco use and alcohol and

drug misuse or poisoning deaths

• Screening for clinical depression

• Elective delivery before 39 weeks

• Rate of developmental screening up

to age 3

• Emergency department utilization

• Percentage of all-payer provider rev-

enue that is not fee for service

• Surveys on access to care and satisfac-

tion with care

• Adoption of electronic health records

Community measures

• Rate of child poverty

• Rate of teen pregnancy

• Air quality and drinking waterquality index

Cost and affordability meas

• Family spending burden: me

individual health care spending—

premiums and out-of-pocket co

as a share of median individual i

• Population spending burden

health care spending in the stat

share of gross state product

• State spending burden: healt

spending by the state as a share

state budget

Example health care scorecard


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Adopt payment and delivery

system reform goals

Seting goals o change paymen and delivery sysems o reward high-value care

is anoher way or saes o increase ransparency and signal a commimen o

sysem ransormaion.

Value-based payment goals

Alernaive paymen models are a ransiion away rom volume-based care where providers are paid based on he quaniy o services providedo value-

based care, where paymens o providers are based on he healh and well-being

o heir paiens as well as heir oal cos o care. Secreary o healh and human

services Sylvia Burwell recenly announced a naional arge o making 50 percen

o Medicare paymens hrough alernaive paymen models and linking 90 percen

o paymens o value or qualiy by 2018.20 Saes should adop similar arges or

heir Medicaid programs and all payers and should ideniy and annually repor

he percenage o paymen in he sae ha is value based. Saes could se hese

arges hrough legislaion or a publicly saed goal. Massachusets’ 2012 cos con-

rol legislaion, or example, creaed a requiremen or 80 percen o is Medicaid

beneficiaries o be in alernaive paymen conracs by July 2015 and or com-

mercial plans o implemen alernaive paymen models as much as possible.21 Te

Massachusets Healh Policy Commission repors annually on he percenage o

alernaive paymen models by payer ype.

In Maryland’s agreemen wih he Ceners or Medicare & Medicaid Services,

he sae agreed o ransiion a leas 80 percen o hospial revenue in he sae o

populaion-based paymen mehods.22 Similarly, Rhode Island’s Working Group

or Healhcare Innovaion recommended ha all o he sae’s payers move awayrom ee-or-service paymen oward alernaive paymen models and ha hey

align around he ederal goals.23


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DSRIP waivers

Delivery Sysem Reorm Incenive Paymen, or DSRIP, waivers offer anoher way

or saes o access significan ederal unding and ake concree acions o sup-

por paymen and delivery sysem reorm, ye only a ew saes so ar have aken

advanage o hese waivers. DSRIP waivers are par o Medicaid’s broader Secion1115 waiver program, which gives saes flexibiliy in esing paymen and delivery

sysem reorms and offering a broader se o services in heir Medicaid program.24

Te waivers provide unding o suppor healh care providers in changing he pay-

men and delivery sysem or Medicaid beneficiaries.25

DSRIP waivers provide millions o dollars o healh care providers ha mee

perormance merics in our general areas esablished by CMS.26 Over he firs

hree years, hese merics ocus on processsysem redesign and inrasrucure

developmen. In he laer years, he merics are based on oucomesclinical ou-

come improvemens and populaion healh. Te specific merics or each o heour areas vary by sae. Under Caliornia’s DSRIP waiver, or example, is public

hospials are implemening 15 care-delivery reorm projecs, and he hospials

have seen posiive progress in decreasing wai imes, reducing hospial-associaed

inecions, and improving paien ineracions.27

While DSRIP waivers mus be budge neural o he ederal governmen, hey

allow saes o ronload ederal unding given ha early invesmens are needed

o realize savings in laer years.28 Tese waivers also can be used in effec o repur-

pose saey ne paymens o hospials or delivery sysem reorm and o smooh a

financial glide pah or providers, increasing provider paricipaion in and accep-

ance o reorm.

Te unds available under DSRIP waivers are subsanial and vary by he size o

he projecssaes such as New York and exas have received more han $6

billion and $11 billion, respecively, over a five-year period, while New Jersey

received $167 million or a smaller iniiaive.29


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Implement bundled payments

for all payers

Under he predominan ee-or-service paymen sysem, healh care providers

are paid separaely or each individual service. In conras, a bundled paymen

compensaes all o a paien’s healh care providers wih a single, fixed, compre-

hensive paymen ha covers all o he clinically recommended services relaed o a

paien’s episode o care, or all reamen and services provided o rea a paricular

condiion over a defined period o ime. Tese paymens can be adjused based on

he paien’s healh saus. Bundles can enable care coordinaion, reduce variaion

in spending and clinical reamens, provide greaer ransparency and accounabil-iy on price and qualiy, and allow providers o ransiion o wider-scale paymen

reorms.30 Tey are also associaed wih qualiy measures o assure ha he qualiy

o care ha paiens receive is preserved or enhanced.

Te ederal governmen is currenly esing several new approaches or bundled

paymen models, bu saes also have a grea opporuniy o implemen bundled

paymens. Several saes are adoping bundled paymen models o shif he ocus

o carerom providing more services o improving qualiy and reducing he

cos o care. Arkansas iniiaed his effor, and ennessee, Ohio, and Delaware are

among oher saes ha have since adoped bundled paymens. Te mos common

approach is o use he bundles as widely as possible across providers and payers

wihin he sae. Tus, here is an effor o require he bundles in boh Medicaid

and privae insurance, or a leas wih hose insurers on he exchange and provid-

ing coverage o sae workers.

Te Arkansas Healh Care Paymen Improvemen Iniiaive is he only saewide

paymen reorm ha involves all major public and privae payers. Te iniiaive

aligns bundled paymens across Medicare; Medicaid; privae insurers; and some

sel-insured employers, including Wal-Mar. Arkansas’ iniiaive also ocuses onexpanding access o medical homes.31 Te sae projecs ha he iniiaive will save

$1.1 billion over hree years and $8.9 billion by 2020.32


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Arkansas iniially launched five mulipayer episodes: upper respiraory inecion;

oal hip and knee replacemen; congesive hear ailure; atenion defici hyper-

aciviy disorder; and perinaal care. Currenly, he sae has launched or sared

work on 16 episodes o care,33 and i has se a goal o applying bundled paymens

o 50 percen o 70 percen o oal healh care spending in he sae over he nex

ew years.34

In he Arkansas iniiaive, providers are sill paid on a ee-or-service basis. Payers

designae a principal accounable provider, or PAP, who is he main decision-

maker or mos care and coordinaes wih oher providers during an episode.

Payers rack qualiy and coss across all episodes during a ime period. I a PAP

keeps he average cos below a hreshold and mees qualiy sandards, hen i can

keep a share o he savings. Bu i he average cos is above he hreshold, hen he

PAP mus pay back a share o he excess coss. Since perormance is measured

based on he average cos across all episodes, raher han he cos o an individual

episode, providers have less incenive o sin on care in any given case. Oherproecions include paien risk or severiy adjusmens o he hresholds; paien

oulier exclusions; and sop-loss adjusmens, or maximum downside risk.


Given bundled paymens’ poenial o save money or saes while improving he

qualiy o care, all saes should ac o implemen bundled paymens saewide,

ideally wih he paricipaion o all payers. However, saes also could iniially sar

wih bundled paymens in heir Medicaid program, require Medicaid managed

care companies o include bundles in heir conracs, or use bundles in he sae

employee plan.

o sreamline work and allow rapid deploymen o he bundles, saes should

uilize bundles ha have already been developed in oher saes or or Medicare.

Tese bundles include: hip replacemens; knee replacemens; prenaal care and

delivery; ashma hospializaions; coronary arery bypass graf surgery; sen

placemen; coronary caheerizaion; and breas cancer adjuvan herapy.


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Institute global budgets

for hospitals

Global budges are a ool o conrol healh care coss and encourage hospials o

ocus on he healh o heir communiy raher han only he provision o healh

care services. Insead o separae payers reimbursing hospials or each individual

service or procedure, under a global budgeing sysem, a sae agency ses a fixed

budge or each hospial each year based on acors including pas expendiures,

pas clinical perormance, and projeced changes in levels o services, wages, and

populaion growh.

Global budges conrol coss by eliminaing he incenives or hospials o increase

heir volume o services because he amoun o revenue hey receive each year is

fixed and predicable and does no depend on he number o paiens served or

services perormed. Wihin prese limis, a he end o he year, hospials keep

money lef over. I hey overspend heir budge, he hospials are responsible or

hese exra coss and do no receive addiional revenue.

Maryland is he only sae ha has esablished global budges. In 2010, 10 rural

hospials in Maryland signed ono he sae’s global budge pilo because hey

waned o ransorm heir care delivery sysems and improve he healh o heir

communiies, bu hey required a sable revenue base while doing so. Ten, in

2014, Maryland esablished global budges or all o is hospials as par o an agree-

men wih he Ceners or Medicare & Medicaid Services.35 Alhough he saewide

effor was volunary, all 46 hospials in he sae had signed on wihin six monhs. 36

Hospials in Maryland suppored he ransiion o global budges.37 Payers also

suppored global budges because hey help conain healh care coss by reducing

volume and avoidable hospial use. Imporanly, he sae undersood ha i would

be criical o build consumer suppor or his reorm, which i accomplished inpar hrough a consumer engagemen ask orce.38

Te Maryland Healh Services Cos Review Commission, or HSCRC, has he

auhoriy o se each hospial’s oal annual revenue a he beginning o each fiscal

year. Annual revenue is deermined rom a hisorical base period ha is adjused


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o reflec a number o acors, including inflaion, populaion change, inrasruc-

ure requiremens, changes in levels o uncompensaed care coss, and qualiy.

Annual revenue also may be modified or changes in service levels, marke share

shifs, or shifs o services o unregulaed setings.39 Te HSCRC also collecs and

disribues paien-cenered daa o hospials monhly on poenially avoidable

uilizaion and on high-uilizaion paiens.

Since he inroducion o saewide global budges in Maryland, oucomes have

improved across he board. Poenially avoidable hospial uilizaion, Medicare

readmission raes, and inpaien admissions have all declined.40 Furhermore, in

2014, all-payer hospial spending growh per capia grew jus 1.47 percen, which

is lower han he 3.58 percen limi se by he sae’s cos growh goal. Tereore,

he sae saved Medicare more han $100 million in jus he firs year.41

Maryland’s unique all-payer rae seting sysem helped aciliae he sae’s ransi-

ion o global budges. Bu global budgeing is possible wihou cenralized raeseting, and oher saes are invesigaing his model.


Addiional saes should consider seting global budges or hospials. An iniial

sep would be o convene a group o hospials, payers, physicians, and consum-

ers o assess global budge seting wihin he sae and deermine wha would be

needed or effecive implemenaion.

A second sep would be o pilo global budges or hospials in a ew regions o

build suppor or a saewide iniiaive, as Maryland did. A sae could use is

convening auhoriy o encourage payers and a ew hospials o implemen global

budges volunarily. Hospials sruggling o mainain volumes o paiens and rev-

enue levels, such as rural hospials, are good candidaes or global budges; reed

rom ee-or-service incenives, hese hospials can ocus on reducing avoidable

admissions and improving oucomes.

o move orward, he sae would need a mechanism o se a arge budge or eachhospial, develop an approach o enorce i, and promoe payer paricipaion. A

waiver rom CMS would be necessary or Medicare paricipaion. A sae also could

incenivize paricipaion and help prepare hospials or he ransiion o global

budges by providing grans or inrasrucure and new saffing needed or global

budges. Maryland provided such grans when i inroduced global budges.42


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Launch all-payer claims databases

All-payer claims daabases, or APCDs, are large-scale daabases ha sysemaically

collec medical claims, pharmacy claims, denal claims, and eligibiliy and pro-

vider files rom privae and public payers in a sae.43 Te daa include he acual

prices ha healh plans have negoiaed wih providers. Currenly, 18 saes have

enaced laws o creae APCDs.44

APCDs are usually creaed by a sae mandae, which requires all payers in a sae

o submi heir daa. Tere are also a ew volunary APCDs ha are esablished wihou legislaion; wih hese, he sae canno compel all payers o submi heir

daa, and he sae has no auhoriy o assess penalies or nonreporing.45

All saes should have an APCD, as hey are insrumenal in enabling cos conrol

and qualiy improvemen effors. APCDs can help saes undersand cos, uiliza-

ion, and qualiy baselines rom which o evaluae he impac o reorms. Tey

enable saes o undersand he healh o heir ciizens and he healh care ha is

being provided o hem. Saes can ideniy variaion beween high- and low-cos

providers and differences in coss or reamen opions or a given condiion; hey

also can deec dispariies in access o services in differen pars o a sae.

Daa provided by APCDs can help consumers choose high-qualiy care and make

inormed decisions.46 Insurers can use APCD daa o negoiae appropriae raes

and seer heir consumers oward high-value care.47 Finally, APCDs are used in

premium rae-review processes o allow saes o veriy i proposed rae increases

are in line wih increases in claims or changes in he risk pool.

Te efficien use o APCD daa can lead o significan cos savings. For example,

a sudy based on daa rom Maine’s APCD ound ha i poenially avoidablehospial admissions and he use o oher hospial services ha are high cos and

have wide variaion in cosas idenified hrough he APCDwere reduced by

50 percen, medical spending by commercial payers could be reduced by 11.5

percen, and Medicaid spending could be reduced by 5.7 percen.48


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Anoher example rom Colorado shows how saes can ideniy rends hrough

APCD daa, calculae poenial savings, and arge inervenions. Te Cener

or Improving Value in Healh Carea nonprofi ha adminisers Colorado’s

APCDanalyzed daa on he prevalence o cesarean deliveries, which can pose

healh risks and also are more expensive han vaginal deliveries. Te Unied Saes

has pledged o decrease he rae o cesarean deliveries in low-risk women by 10percen by 2020.49 Tey ound ha he rae o cesarean deliveries was increasing

in Colorado, as well as ha people wih commercial insurance were significanly

more likely o have cesarean deliveries han Medicaid enrollees. Alhough he daa

could no reveal why he raes o cesarean deliveries differed by ype o coverage,

hey showed areas ha policymakers could arge o reverse he rend o increas-

ing cesareanshereore prevening unnecessary healh risks o mohers and

children. Te analysis also ound ha reducing he rae o cesarean deliveries only

10 percen would save he sae $6.5 million per year.

Te coss o develop and operae an APCD vary depending on he size o hesae, he scope o he daa colleced, and oher acors. In he saes ha already

have APCDs, he average cos o develop and implemen hem was $1.1 million,

and annual ongoing coss average $600,000.50 Saes use a variey o sources o

und he developmen and operaion o heir APCDs, ypically unding par o

heir APCDs hrough general appropriaions or ees assessed on healh plans or

providers.51 Many saes also receive gran unding o suppor APCD develop-

men.52 Some saes have included APCD developmen and improvemen as

a componen o ederal rae review grans, while ohers have used he ederal

Beacon Communiy Programwhich suppors communiies in adoping elec-

ronic healh records and healh inormaion exchangeso obain unds. New

Hampshire has leveraged Medicaid unding or is APCD. Finally, saes can und

heir APCDs in par hrough selling daa o researchers and oher sakeholders.

Tere are many resources o help saes esablish an APCD, and he bes pracices

rom oher saes can be applied o address sakeholders’ concerns. For example,

healh care providers may be concerned abou daa proecions in an APCD

such as making public he discoun arrangemens ha providers have wih pay-

ers.53 I is imporan o include payers and providers in he APCD creaion process

and gain heir inpu on he bes way o srucure daa collecion and release inorder o build buy-in. Te APCD Councila nonprofi ha helps saes wih

APCD developmenhas creaed model legislaion or APCD developmen, as

well as a model or saes o ollow when seting up an APCD, and i can provide

guidance on daa collecion and daa release rules.54


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An APCD is an imporan ool or all saes. Te 2016 U.S. Supreme Cour

decision Gobeille vs. Liberty Mutual Insurance Company ruled ha he Employee

Reiremen Income Securiy Ac o 1974 exemps sel-unded insurers rom

reporing daa o APCDs.55

Tereore, saewide mandaory APCDs may no lon-ger be possible, unless he U.S. Deparmen o Labor issues new rules o require

sel-unded plans o submi daa, bu saes can sill esablish saewide APCDs

wih required reporing excep or sel-unded insurers. Saes hen could ask sel-

unded insurers o submi daa o he APCD volunarily.

I a saewide APCD is no possible immediaely, a sae also could recrui one

large healh sysem o agree o work wih he sae in esablishing an APCD; his

would creae more pressure or oher healh sysems o similarly sign ono an

APCD. Saes also could hink abou saring wih a volunary APCD and ransi-

ioning laer o a required APCD. Washingon ook his approach in 2004 and isnow implemening an APCD wih mandaory reporing.56 Saes ha are iner-

esed in creaing an APCD should use exising resources and organizaions in heir

saes, such as academic or oher healh care insiuions, wih experise in healh

care daa o help wih he creaion or running o he APCD.


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Expand evidence-based

home visiting services

Home visiing programs connec parens wih nurses, social workers, or oher

proessionals who provide coaching and guidance on healhy child developmen

and link amilies wih oher imporan services. Tese programs are among he

mos effecive governmen programs ever sudied in erms o consisenly produc-

ing boh posiive oucomes and cos savings, and hey are an imporan ool o

reduce rising income inequaliy.57 Randomized conrolled rials esing he impac

o home visiing services have ound ha he mos effecive models reduce he risk

o inan deah; reduce he need or paymens rom he Supplemenal Nuriion Assisance Program, or SNAP, and emporary Assisance or Needy Families,

or ANF; lower criminal offenses and subsance abuse; preven child abuse and

malreamen; increase breaseeding and immunizaion; and increase amily

economic securiy.58

In addiion o improving he lives o he amilies ha paricipae, evidence-based

home visiing services acually pay or hemselves. A CAP analysis o exensive

research on he reurn on invesmen o he Nurse-Family Parnership, or NFP

one o he mos widespread and sudied home visiing programsound ha,

even accouning or he coss o providing he program, a sae can expec average

savings o more han $7,400 rom each birh enrolled in NFP by he ime a child is

18 years old.59

However, evidence-based home visiing programs serve only a small porion o

he eligible amilies, largely due o unding challenges. In 2015, he larges ederal

unding source or home visiing programshe Maernal, Inan, and Early

Childhood Home Visiing Program, or MIECHVwas only able o serve abou

115,000 parens and children, a small racion o he children and amilies who

live in povery in he Unied Saes.60

Saes mus piece ogeher muliple undingsources, which is adminisraively complicaed and ime-consuming, inhibiing

saes rom providing hese imporan services o all eligible amilies. Home visi-

ing also requires invesmens in he firs ew years o a child’s lie ha are paid off

laer in savingsa challenge or saes because hey are required o balance heir

budges on an annual or a biannual basis.


22/57


Despie hese challenges, saes should ac quickly o expand home visiing pro-

grams and provide coverage o all eligible amilies, raher han spending money

in he uure on cosly services. Combining curren unding sources and using

innovaive financing mehods can provide he invesmen needed now o realize

significan savings and improved oucomes or amilies in he uure. I saes were

o offer home visiing services consisenly o eligible residens, he savings romproviding hese services would more han cover he coss afer he firs ew years.61


Saes have several opions o expand he reach o heir home visiing programs.

Firs, saes can work o increase Medicaid unding or heir home visiing pro-

grams. Greaer Medicaid reimbursemen would require ha saes employ home

visiing adminisraors wih experise in Medicaid benefis and reimbursemen

bu would provide a sable unding source. Saes would also save more han heirshare o he coss o unding increased home visiing hrough Medicaid. Home

visiing aciviies ha saes have ound o be eligible or Medicaid coverage and

paymen include: assessmens; developing care plans and monioring progress;

reerrals; amily planning aciviies; and providing menal healh services.62 Recen

guidance rom he Ceners or Medicare & Medicaid Services and he Healh

Resources and Services Adminisraion oulines he Medicaid financing mecha-

nisms available o saes or home visiing programs.63 However, Medicaid unding

is insufficien o und he enire range and duraion o home visiing programs, so

saes would need o supplemen Medicaid wih oher unding sources.

Second, saes could encourage or require Medicaid managed care organizaions

o offer home visiing services as a benefi o all eligible Medicaid beneficiaries.

All Medicaid managed care organizaions in Minnesoa, or insance, volunarily

offer home visiing programs because hey recognize he cos effeciveness o

hese programs.64

Tird, saes could negoiae a Medicaid waiver wih CMS o provide ederal

maching unding and ronload unding or home visiing. Medicaid Secion

1115 waiverswhich give saes flexibiliy o es innovaions and offer servicesno usually covered by Medicaidwould allow saes o und he ull range o

home visiing services compleely hrough Medicaid and offer hese imporan

services o every eligible amily. Secion 1915(b) waiverswhich allow saes o

implemen services ha are no oherwise available hrough managed care orga-


23/57


nizaions, arge specific populaions, and resric he choice o providersare

anoher opion. Souh Carolina recenly received approval or a 1915(b) waiver

rom CMS ha he sae will use o launch a pilo program or NFP.65

Lasly, saes could use innovaive Pay or Success models o und home visiing,

as several saes are in he process o doing.66

In hese models, also known as socialimpac bonds, local banks, communiy oundaions, naional oundaions, and

invesmen banks pu up capial o scale home visiing programs, and he govern-

men pays hese invesors back only i resuls are achieved and savings maerialize.

In Souh Carolina, Gov. Nikki Haley (R) is pioneering such a social impac bond

modelin conjuncion wih he 1915(b) waivero und home visiing and

expand hese imporan services o more mohers and children.67 Tis ype o pay-

men model can solve he iming issue inheren o home visiing services: Capial

is needed upron, bu savings accrue over a longer ime period.


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Improve price transparency

Te U.S. healh care sysem, especially healh care prices, is characerized by a lack

o ransparency. Tis impedes marke compeiion and prevens paiens and heir

providers rom making inormed healh care decisions. Consumers do no know

how much a procedure, medicaion, or hospial say will cos. Prices or he same

service can vary significanly by provider, and providers charge differen payers

differen amouns or he same service.

However, here is no consisen evidence ha higher prices are correlaed wihhigher-qualiy healh care services.68 Even when prices are lised, hose are ofen

no he prices ha paiens acually will be charged. Prices may differ, or example,

because o he paiens’ insurance coverage or because o he coss o oher provid-

ers who may be involved in he paiens’ care. Docors make reerrals wihou

knowing he prices charged by oher providers and prescribe medicaion and

medical devices wihou knowing heir prices. Widespread price variaion, which

is enabled by he lack o price ransparency, adds abou $36 billion o he expenses

o people wih employer-sponsored healh insurance.69

Price ransparency provides consumers wih accurae and imely inormaion

ha hey can use o make inormed healh care choices.70 ransparency also

can expose marke condiions and make markes more compeiive, resuling in

prices ha reflec he cos and value o he healh care services ha are provided.71

Despie he challenges o achieving price ransparencyincluding he variey o

insurance benefi designs and legal barriers o disclosing pricesall saes should

expand price ransparency effors by offering consumer-riendly esimaes o com-

mon healh care services and qualiy inormaion.

New Hampshire is a pioneer in price ransparency and is he only sae o havereceived an “A” grade or sae ransparency rom Caalys or Paymen Reorm,

a nonprofi working o promoe higher-value healh care in he Unied Saes.72

New Hampshire uses is all-payer claims daabase o publish he acual coss ha


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consumers can expec o pay or healh care services.73 Te sae recenly added

addiional procedures, qualiy daa, and a consumer-riendly inerace o encour-

age consumers o shop around or he bes-value services.

Massachusets also has been a leader in price ransparency. Since 2014,

Massachusets has required insurers and healh plan adminisraors o offerconsumers provider-specific esimaes o heir ou-o-pocke coss or specific

hospial says or procedures.74 Tese prices include coss or boh docors and

healh care aciliies insead o discree services. Tese esimaes are binding,

unless he paien receives addiional services ha were no anicipaed o be par

o he reamen.75 Te Massachusets law also requires providers o give paiens

inormaion ha heir insurer migh need o calculae heir ou-o-pocke coss.

In addiion o hese consumer-ocused requiremens, healh care providers in

Massachusets also mus disclose heir esimaed charges. Te sae has insiued

iniiaives aimed a sudying prices and increasing access o qualiy and cosdaahe Healh Policy Commission sudies price variaion, and all healh care

organizaions mus submi annual cos and qualiy daa o he commission. A

public websie liss daa abou he relaive coss o differen providers, increasing

consumers’ access o crucial inormaion.


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Integrate behavioral health

and primary care

Behavioral healh issues are associaed wih poor physical healh oucomes.

Paiens wih boh ype 2 diabees and menal illness, or example, have a higher

moraliy rae han hose wih jus diabees or jus menal illness.76 Individuals

wih severe menal illness, depression, demenia, and subsance use disorders have

reduced chances o survival afer a cancer diagnosis, independen o he cancer

sage a diagnosis.77 People wih menal disorders have a lower age o deah by an

average o 8.2 years.78

Tose wih comorbid behavioral and medical healh issues do no only have worse

healh oucomeshey also produce subsanial coss o he healh care sysem.

Milliman, an acuarial and consuling firm, conduced an analysis ha ound ha

hose wih chronic medical and comorbid menal healh condiions or subsance

use disorders can incur coss ha are 2 imes o 3 imes he coss o hose wih-

ou comorbid menal healh condiions or subsance use disorders.79 Because

Medicaid is he larges payer or behavioral healh reamen, saes shoulder

significan coss rom behavioral healh issues.80

Behavioral healh services are ofen provided compleely separaely rom he

physical healh sysem. Addiionally, many paiens preer o seek care or behav-

ioral healh issues rom heir primary care docors, who are ofen ill-equipped o

deliver appropriae care.81 However, he effecive inegraion o behavioral and

medical services can help improve healh oucomes and lower coss. For example,

he Milliman analysis ound ha he effecive inegraion o care could save abou

9 percen o 16 percen o he addiional spending on hose wih comorbid menal

healh condiions or subsance use disorders.82

Tere is a coninuum o approaches o inegrae physical and behavioral healhcare.83 In an inegraed care pracicehe mos inegraed on he coninuuma

eam o primary care and behavioral healh providers work ogeher o address

behavioral healh issues ha presen in primary care.84 Oher less ully inegraed

bu sill helpul approaches include coordinaed caresuch as universal screening

or behavioral healh disorders in primary care, or co-locaionwhere physical

and behavioral healh care services are provided a he same locaion.


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One example o an inegraed care inervenion is he Improving Mood-

Promoing Access o Collaboraive reamen, or IMPAC, care managemen

program developed a he Universiy o Washingon ha is designed o rea lae-

lie depression in primary care. Tis model is also known as Collaboraive Care.

Depression is a common and expensive condiion in older adulsone ha ofen

occurs wih oher healh problems.85

However, ew older aduls receive effecivereamen, ofen because hey are no diagnosed. Addiionally, more han 90 per-

cen o older aduls wih depression preer o receive care rom heir primary care

provider raher han a menal healh specialis, even hough primary care docors

do no have he same experise in menal healh.86

Wih he IMPAC inervenion, paiens have a depression care manager,

supervised by a psychiaris, who works direcly wih he paien’s primary care

provider. Tis eam sysemaically racks he paien’s oucomes and adjuss he

reamen i he paien is no improving.87 Te paien also receives educaion,

an anidepressan medicaion when recommended, and individual counselingsessions. In conras, usual care or paiens diagnosed wih depression in primary

care consiss o jus a prescripion or an anidepressan or a reerral o a menal

healh provider.88

A randomized conrolled rial o he IMPAC inervenionacross 18 diverse

primary care clinics in five saesshowed ha i more han doubled he effec-

iveness o depression reamen or hese older aduls in primary care setings,

increased paien saisacion, improved physical uncioning, and saved abou

10 percen o oal healh care coss or he inervenion paiens.89 Te IMPAC

program has since been expanded o include adolescens and nonelderly aduls,

as well o oher behavioral healh condiions, including anxiey and subsance

abuse.90 Tis model o care has now been implemened in hundreds o organiza-

ions across he counry.91

Several saes are implemening new paymen models or innovaive models o care

o promoe he effecive inegraion o behavioral and physical healh.

Oregon is piloing an Alernaive Paymen Mehodology a hree communiy

healh ceners, which is allowing or beter inegraion o behavioral healh and pri-mary care.92 Te Alernaive Paymen Mehodology pilo is designed o promoe

comprehensive care or a populaion by paying he communiy healh ceners a

per-member-per-monh, or PMPM, ee insead o on a ee-or-service basis. Te

pracices are able o look broadly a how hey rea heir paiens and have he

flexibiliy o use some o he PMPM paymen on behavioral healh services. For


28/57


example, some o he pracices are embedding behavioral healh docors in pri-

mary care eams, so ha he primary care physicians can immediaely reer paiens

o he behavioral healh providers in person a he end o a primary care visi.

In several saes, Medicaid managed care organizaions are implemening pro-

grams o coordinae care or paiens wih comorbid behavioral and physicalhealh condiions.93 For example, Communiy Healh Plan o Washingon,

which is a nonprofi plan serving he Medicaid populaion, has implemened

he IMPAC model. Te Washingon healh plan suppors he creaion o he

reamen eams ha are required as par o IMPAC and invess in addiional

raining or he providers o implemen he model. Afer he healh plan expanded

he model rom wo pilo sies o saewide, i achieved savings o abou $11 per

member per monh in jus he firs 14 monhs.

Colorado is using a Sae Innovaion Models gran rom he Ceners or Medicare

& Medicaid Services o implemen a saewide behavioral healh iniiaive. Teiniiaive aims or 80 percen o Colorado residens o have access o inegraed

care or behavioral healh and primary care in primary care setings by 2019, and

projecs ha his will save $330 million over five years.94 As par o his effor, he

sae will implemen inegraed care in Medicaid and he sae healh employee

plan o spur broader adopion o inegraed care across he sae, and i will pro-

vide pracice ransormaion suppor o 400 primary care pracices o enable hem

o inegrae behavioral and physical healh services.95

Privae insurers also have insiued programs o help coordinae behavioral and

physical healh care. Aena, or example, developed a Depression in Primary

Care Program o suppor primary care physicians in diagnosing and monioring

paiens wih depression.96 Tis program provides primary care physicians wih a

diagnosic ool and reimburses hem or heir ime spen screening or depression

and ollow-up monioring.


Tese examples show how saes can ake a lead role in inegraing behavioralhealh and primary care. Firs, a sae could enac legislaion o require primary

care providers o screen all paiens or menal healh issues and hen reer hem


29/57


or appropriae care. Tis approach would no inegrae care ully, bu i would

require he sae o assess paiens’ access o menal healh providers and ake

seps o improve access as needed.

Second, saes could aciliae and operaionalize he inegraion o behavioral

and physical healh by removing paymen barriers ha hinder he inegraion ocare. For example, some saes do no allow healh ceners o bill or he coss o

muliple servicessuch as boh a physical healh and a behavioral healh ser-

viceo he same person in he same day, which discourages he co-locaion o

hese services.97 In some saes, Medicaid will no reimburse or healh behavior

and assessmen inervenion codes a Federally Qualified Healh Ceners.98 Some

saes do no uilize billing codes ha were esablished or Medicaid paymen or

Screening, Brie Inervenion, and Reerral o reamen, or SBIRa mehod o

screening or subsance use disorders. Anoher issue is ha in some saes, mos

payers do no reimburse or communiy healh workers o suppor care manage-

men o behavioral and physical healh issues.99 And he ee-or-service paymensysem does no allow or reimbursemen o he ype o care coordinaion ha

Oregon is promoing wih is Alernaive Paymen Mehodology pilo.

Tird, saes could implemen, wih a pilo or wih a saewide expansion, an

effecive inegraed care model, such as he IMPAC inervenion described

above. Healh Homes, which is a reamen model ha was esablished by he

Affordable Care Ac o coordinae care or Medicaid beneficiaries wih more han

one chronic condiion, can be used o implemen collaboraive care programs

such as IMPAC.100

Fourh, saes could reduce barriers o he sharing o inormaion beween

primary care and behavioral healh providers. Confidenialiy laws or behavioral

healh are ofen more resricive han hose or physical healhor example, i

a paien’s consen is required o share daa on menal healh reamen across

providers.101 Saes wih resricive confidenialiy laws should amend hese laws

o permi greaer sharing o inormaion while sill proecing paien privacy.

Saes can, or example, permi he sharing o daa on behavioral healh or rea-

men purposes. However, saes do no have he auhoriy o overcome resric-

ive ederal law around he sharing o daa relaed o addicion reamen, houghhe U.S. Deparmen o Healh and Human Services is proposing o modiy

hese regulaions.102


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Combat addiction to prescription

drugs and heroin

Drug overdose deahs, addicion, and emergency deparmen visis relaed o

subsance use disorders have surged in recen years, and he Ceners or Disease

Conrol and Prevenion has labeled i an epidemic.103 Addicion o prescripion

opioids and heroin, which is ound across all demographic and income groups,

is driving his epidemic. From 2002 o 2013, here was a 286 percen increase in

he number o heroin-relaed overdose deahs.104 Ofen, people become addiced

o prescripion opioid painkillers, obained boh legally and illegally, and hen

become addiced o heroin, which is much cheaper.105 Te coss associaed wihdrug overdose and addicion are large and growing, and Medicaid bears a large

percenage o hese coss.106

Te ederal governmen has aken seps o implemen policies o reduce drug addic-

ion and overdose, such as providing greaer raining on opioid prescribing or ed-

eral healh care proessionals.107 Bu saes have he abiliy o effec greaer change

because hey regulae he pracice o medicine wihin heir saes.108 However, saes

mus overcome several barriers o reducing prescripion drug and heroin use.

Sigma and misconcepions surrounding addicion are common and presen a

serious barrier o effecive reamen. Addicion is a chronic diseasea ac ha

is commonly misundersood and ha conribues o sigma. Sigma, in urn, can

preven access o effecive reamen. For example, he use o medicaion-assised

reamen,* or MA, has been shown o produce subsanial cos savings as well as

reduce drug use, disease raes, and criminal aciviy among addiced people, and

i is more effecive han shor-erm managed wihdrawal reamen, or deoxifica-

ion.109 Te Insiue or Clinical and Economic Review has ound ha or every

addiional dollar spen on MA, $1.80 in savings are realized.110 Ye a judge or

parole officer may order an offender o end MA because he or she believes heperson is no ruly in recovery.

* With MAT, medications are used in conjunction with behavioral therapy to reduce the symptoms of substance use withdrawal. Three medi-

cations are approved by the Food and Drug Administration to treat opioid use disorders: methadone; buprenorphine; and naltrexone. SeeCindy Mann and others, “Medication Assisted Treatment for Substance Use Disorders” (Baltimore: Centers for Medicare & Medicaid Services,

2014), available at http://www.medicaid.gov/federal-policy-guidance/downloads/cib-07-11-2014.pdf.

http://www.medicaid.gov/federal-policy-guidance/downloads/cib-07-11-2014.pdfhttp://www.medicaid.gov/federal-policy-guidance/downloads/cib-07-11-2014.pdf


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Second, access o effecive reamen is limied. Only 10 percen o Americans

wih addicions and subsance use disorders receive any care each year.111 An esi-

maed 65 percen o people in prison have a drug or alcohol addicion, ye only 11

percen receive proessional reamen while incarceraed. Shorages o clinicians

who care or individuals wih subsance use disorders and limied spos available

or reamen resric he number o people who can access reamen. People whoare uninsured also have rouble affording reamen.

Even hose who are able o access reamen find i hard o access effecive rea-

men. As o 2014, only 13 saes included all approved addicion medicaions on

heir Medicaid preerred drug liss, many insurers impose onerous requiremens

on addicion reamensuch as quaniy or lieime limisand many privae

insurers do no cover mehadone reamen.112 For example, in order o prescribe

buprenorphinean effecive medicaion approved o rea opioid addicion

docors mus ake an eigh-hour course and apply or a special license, which

limis he number o docors permited o prescribe his addicion medicaion.113 Tese resricions mean ha only 2.2 percen o docors me he requiremens o

prescribe buprenorphine in 2012.114 Since addicion is a chronic disease, limis on

how long an individual can receive reamen misundersand drug addicion, are

counerproducive, and can resul in higher long-erm coss.

Tird, many saes lack access o imely and comprehensive daa. Many saes rack

overdose deahs bu wih significan lag ime and wihou deailed inormaion.

Addiional daa on overdose deahs and on nonaal overdoses can help saes,

local jurisdicions, police deparmens, and healh proessionals pinpoin rouble

areas and where o launch inervenions sraegically.

State strategies for combating addiction and overdose deaths

Examples rom our saes illusrae how saes are using some o he available

ools o couner drug addicion and overdose deahs.

In 2014, ormer Gov. Marin O’Malley (D) o Maryland signed an execuive order

o esablish an Overdose Prevenion Council o reduce he number o overdose-relaed deahs in he sae. Te sae also creaed a saewide plan and anoher

plan or correcional insiuions. Gov. Larry Hogan (R) coninued his work by

esablishing he Heroin and Opioid Emergency ask Force and an Iner-Agency

Coordinaing Council in 2015.115 Oher acions he sae has aken include:


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• Adding a requiremen or educaion on opioid prescribing or all docors as a

condiion o licensure.116

• Making naloxone, which reverses a heroin overdose, available wihou

prior auhorizaion.117

• Auhorizing via sae legislaion amily members and ohers o carry naloxone.118

• Launching a major campaign o link people o reamen and o educae on

overdose and addicion. Te sae also is working wih he Sae Deparmen o

Educaion o include educaion on he consequences o prescripion painkillers

and heroin in school curricula.119

• Promoing evidence-based reamen and increasing capaciy a

reamen ceners.120

• Working wih hospials on a volunary reporing sysem or nonaal overdoses

so ha he sae can offer reamen o preven aal overdoses.121

• Releasing deailed annual and quarerly repors, which include daa on deahs

by ypes o drug- and alcohol-relaed inoxicaion deahs.122

Maryland heavily ocuses on daa and underook a projec o link daa across

muliple sae agencies o make policy improvemens.123 Te Overdose Prevenion

Council was able o coordinae aciviies among differen sae agencies, break

down silos, overcome legal barriers o sharing daa, and develop a comprehensive

daa se o individuals who died o an overdose. Tese seps helped he sae and

local jurisdicions ideniy paterns o overdose aciviy and arge heir public

healh responses and planned inervenions. For example, he sae was able o

ideniy ha individuals released rom correcions aciliies were a much higher

risk o overdose deah ollowing release. As a resul, he sae correcions agency

ook on a greaer role in educaing inmaes on overdose prevenion and reamen,

and he Deparmen o Public Saey and Correcional Services made recommen-

daions o improve access o reamen.

In recen years, Florida was home o a large number o “pill mills,” or pain man-

agemen clinics ha were improperly prescribing and dispensing prescripion

drugs. In 2010, 93 o he op 100 oxycodone dispensing docors were in Florida;

he number o people dying rom oxycodone overdoses in he sae was skyrock-


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eing. People across he counry were flooding ino Florida o obain prescrip-

ions.124 Beginning in 2010, sae officials, wih assisance rom he ederal Drug

Enorcemen Adminisraion, aced o sop hese abuses. Te sae:

• Required pain managemen clinics o regiser wih he sae and be owned

by docors125

• Required physicians o regiser in prescripion drug monioring programs,

or PDMPs126

• Disallowed physicians rom dispensing prescripion painkillers rom

heir offices127

• Increased penalies or docors who overprescribed drugs128

Tese iniiaives have been successul: Te number o oxycodone pills in Floridaand he number o pain clinics have been halved, and he number o oxycodone

deahs in 2012 was less han hal he number in 2010.129

In 2012, New York passed legislaion o make changes o is PDMP in order o

increase is effeciveness and uilizaion. PDMPs are saewide elecronic daa-

bases ha collec daa on conrolled prescripion drugs dispensed in he sae.

New York made he sysem more user riendly, included greaer deail in repors

o encourage docors o use hem, allowed docors o designae saff o access he

sysem o run repors or hem, and allowed access or licensed pharmaciss.130

New York also now requires physicians o consul he PDMP beore prescribing

cerain conrolled subsances.131 Addiionally, beginning in 2016, here is manda-

ory elecronic prescribing or all prescripions in he saemaking New York he

firs sae o require his.132 Elecronic prescribing connecs docors and pharma-

ciss elecronically and allows or easier communicaion and deecion o raud.133

Rhode Island has insiued deailed reporing o boh aal and nonaal drug over-

doses; he level o deail and imeliness o he daa are rare.134 For every opioid-

relaed overdose, a hospial is required o noiy he sae healh deparmen and

provide demographic inormaion on he paien, as well as sae wheher naloxone was adminisered and a wha dose, where he overdose occurred, and wheher he

person died. Te sae also quickly publicizes he number o drug overdoses and

wha drugs were involved in he overdose, such as by heroin mixed wih he pow-

erul painkiller enanyl. Tis inormaion helps he sae ideniy risk acors or

overdoses, inorms is policies, and draws greaer public atenion o he problem.


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Alhough none are a silver bulle, key componens o effecive sraegies or saes

o comba addicion o prescripion drugs and heroin include he ollowing acions.

Improving data collection and utilization

• Improve he daa collecion and analysis o measures relaed o addicion and

overdose. Real-ime daa help healh proessionals undersand where overdoses

are occurring and allow hem o pinpoin where o deploy resources. Daa also

help overcome parisan differences and sigma around addicion by allowing

people o undersand he exen o he problem and wha is happening in heir

own communiies.

• Esablish an effecive PDMP. PDMPs can be used o analyze prescribingpracices by physicians and pharmacies and ideniy he uilizaion o high-risk

paiens. Mos saes currenly have PDMPs, bu hey differ in heir unding,

use, and capabiliies, and PDMP paricipaion by providers is very low in mos

saes.135 For insance, only 16 saes currenly require docors o use PDMPs.136

In a sample o saes where docors can choose wheher o consul heir sae’s

PDMP beore prescribing an opioid, hey did so only 14 percen o he ime in

2015.137 Funding is available rom he U.S. Deparmen o Jusice o plan, imple-

men, and enhance PDMPs.138

• Collaborae and link daa wih oher saes. For example, Maryland recenly

announced ha is PDMP will now link o Virginia’s, and evenually o oher

saes, o ideniy wheher paiens are filling prescripions ouside Maryland.139

Increasing access to evidence-based treatment

• Reimburse or Screening, Brie Inervenion, and Reerral o reamenan

evidence-based pracice used o ideniy, reduce, and preven abuse o and

dependence on alcohol and illici drugs.140

Saes could obain ederal granunding or SBIR hrough he Subsance Abuse and Menal Healh Services

Adminisraion, or SAMHSA, and also draw down Medicaid maching unds.

• Increase access o reamen by expanding Medicaid. Te Affordable Care

Ac requires coverage or subsance abuse reamen or all insurers, including

Medicaid, bu many aduls in he 19 nonexpansion saes sill lack access o


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insurance and, hereore, subsance abuse reamen.141 A recen repor rom

he Deparmen o Healh and Human Services ound ha abou 1.9 million

uninsured people wih a menal illness or subsance use disorder live in saes

ha have no ye expanded Medicaid.142

•Increase Medicaid reimbursemen raes or oupaien reamen and provideaddiional unding o reamen ceners o help increase ceners’ capaciy.

• Leverage available ederal unding o increase he accessibiliy o naloxone

and increase access o MA.143 In March 2016, he Obama adminisraion

announced ha SAMHSA is releasing new unding opporuniies or saes o

expand heir MA services and or saes o purchase and disribue naloxone.144

Training and education

• Develop policies o improve he prescribing o opiaes, involving physicians,

paiens, insurers, pharmacies, and licensing boards. Licensing boards could,

or example, require educaion o docors or conrolled subsances licensure.

Insurers and pharmacies could esablish lock-in programs ha limi cerain

paiens’ access o prescripions a paricular pharmacies and allow providers o

monior paiens’ medicaion uilizaion.

• Creae public awareness and educaion campaigns o encourage he respon-

sible use o opioid medicaions, preven addicions, and reduce sigma. Lack o

public awareness is a major driver o opioid addicion; almos hal o users o

opioid painkillers do no know ha hey are as addicive as heroin.145 And hose

addiced o opioid painkillers are 40 imes more likely o become addiced o

heroin han hose who are no dependen on opioid painkillers.146 For example,

he Rhode Island Deparmen o Healh recenly launched a media campaign

called “Addicion is a Disease. Recovery is Possible” ha highlighs eigh resi-

dens’ sories o addicion and recovery.147

• Require ha medical schools in he sae include insrucion on addicion and

subsance abuse. Currenly, he Hospial o he Universiy o Pennsylvania is heonly medical school in he counry o require his, bu more han 60 medical

schools have pledged ha hey will require heir sudens o ake some orm o

prescriber educaion beginning in all 2016.148


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Improve the delivery of

long-term care

Long-erm care is a range o services and suppors o mee a person’s daily

personal care and healh needs over an exended period o ime.149 oday, more

han 12 million elderly or disabled Americans rely on long-erm care, and he

demographics o many saes creae significan challenges or heir long-erm care

sysems.150 In paricular, he number o elderly Americans is increasingand

projeced o coninue o increasea a aser rae han he nonelderly populaion.

Given hese rends, he need or long-erm care is projeced o double over he

nex ew decades.151 Because Medicaid is he larges financer o long-erm care,sae budges will bear a significan amoun o he coss rom his increased need

or long-erm care.152

Reorms o saes’ curren long-erm care delivery sysems can no only improve

access and qualiy bu also lower coss. Policymakers have recenly ocused

increased atenion on hese challenges. Some saes ook advanage o he

Balancing Incenive Program in he Affordable Care Ac o increase access o

home and communiy-based services and o rebalance he sysem oward nonin-

siuional setings.153 However, his unding expired in Sepember 2015.

Options for improving long-term care

Saes can choose rom several opions o increase he susainabiliy o heir long-

erm care sysems.

Rebalancing toward home- and community-based services

Policymakers should iniiae or build on curren effors o rebalance heir saes’

long-erm suppors and services oward home- and communiy-based services.

Services provided in communiy setings are ar less expensive han services

provided in nursing homes.154 Tis ocus is paricularly imporan as saes increas-

ingly move oward managed care delivery or hese services.


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Te Communiy Firs Choice Opion or Medicaid programs, esablished by he

ACA, offers enhanced ederal maching unds or providing home- and commu-

niy-based atendan services and suppors.155 In order o qualiy or he enhanced

6 percen maching rae, hese services mus be offered hroughou he sae and

wihou a wailis. Tis enhanced maching rae can generae a significan amoun

o new unding or a sae.156

Five saesCaliornia, Maryland, Monana, Oregon, and exascurrenly have

approved sae plan amendmens or his opion.157 All saes should modiy heir

Medicaid programs o include he Communiy Choice Firs Opion, which would

make permanen he ypes o incenives ha were available on a emporary basis

under he Balancing Incenive Program or under waivers rom he Ceners or

Medicare & Medicaid Services, which allow saes o adop Medicaid policies ha

differ rom sandard Medicaid requiremens.

Offering Health Homes to patients with multiple chronic conditions

Sae Medicaid programs also should offer Healh Homes, which are an opional

Medicaid sae plan benefi ha les saes coordinae care or Medicaid beneficia-

ries wih chronic condiions, such as people who suffer rom serious menal healh

condiions, subsance use disorders, ashma, diabees, hear disease, or obesiy.158

Healh Homes can help inegrae and coordinae acue, primary, menal healh,

and long-erm care or hese high-risk paricipans.159 Tis inensive care coordina-

ion aims o reduce emergency room use, hospial admissions and readmissions,

and reliance on long-erm care aciliies. In Missouri, Healh Homes have reduced

blood pressure and choleserol, reduced hospializaions, and saved $15.7 million

in he firs wo years.160

Healh Homes have designaed healh care providers working wih a healh care

eam, which could include a nurse coordinaor, a menal healh proessional, and a

pharmacis. Tey receive a ee or providing he ollowing services:161

• Care managemen

• Prevenion and screening o menal illness and subsance use disorders

• ransiional care rom inpaien o oher setings, such as discharge planning


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• Reerral o communiy and social services

• Use o healh inormaion echnology

• Reporing daa on paien oucomes

Te ACA offers significan unding or saes ha wish o implemen his program

or heir Medicaid enrollees. For he firs wo years o he program, he ederal gov-

ernmen will pay or 90 percen o he coss.162 Saes reain flexibiliy in designing

paymen mehodologies and choosing eligible Healh Home providers. Currenly,

19 saes have approved Healh Home sae plan amendmens wih CMS.163

Saes wih managed long-erm care should require insurers o offer similar Healh

Homes o Medicaid-eligible individuals wih chronic condiions.

Encouraging the purchase of private long-term care insurance

Mos Americans are no able o pay or heir long-erm care and incorrecly

assume ha Medicare, privae healh insurance, or reiremen plans will cover he

coss.164 Saes should encourage he purchase o privae long-erm care insur-

ance by offering reundable ax credis o people who purchase minimum levels

o privae long-erm insurance. Tese ax credis would be an upron invesmen

ha would over ime help lower coss in he Medicaid program because individu-

als may have oherwise relied enirely on Medicaid o und heir long-erm care.

Compared wih he curren, limied ederal ax deducion, a reundable, sliding-

scale sae ax credi exclusively or he purchase o long-erm care insurance

would offer ar greaer assisance or hose who wish o buy hese producs.

Individuals would qualiy or a credi i hey bough a qualified long-erm care

insurance policy. o proec consumers, hese policies would be guaraneed issue

and would include a minimum level o benefis ha could no vary based on age or

healh saus and have proecion agains inflaion. o proec agains adverse selec-

ionpeople waiing o buy long-erm care insurance unil hey begin o need

ihere also would be a five-year waiing period. Te new ax credi would beavailable o hose who firs purchase a policy when hey are ages 60 and under; his

would urher reduce adverse selecion and keep premium amouns affordable.


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Align scope of practice with

community needs

Scope o pracice reers o he services ha a healh care proessional is legally

allowed o provide or a paien in a paricular seting.165 In paricular, scope-o-

pracice laws regulae he role o nurse praciioners and physician assisans.

Nurses make up he larges segmen o he healh care workorce in he Unied

Saes, ye many o hem ace barriers o uilizing heir raining o he ulles exen

possible.166 Removing hese barriers would improve he produciviy o he healh

care sysem. In addiion, sysemaic reviews o randomized conrolled rials have

ound ha nurse praciioners and physicians provide similar qualiy care and hapaiens are saisfied wih he care provided by a nurse praciioner.167

Inappropriae or overbearing scope-o-pracice regulaions can preven rained

healh care proessionals rom uilizing heir ull se o skills, limi paiens’ access

o care and choice o providers, and increase healh care coss.168 Allowing nurse

praciioners and physician assisans o pracice wih more independence would

increase marke compeiion and increase he supply o primary care providers,

hereby improving paiens’ access o providers.169 In 2014, more han 58 million

Americans lived in areas wih primary care physician shorages.170 Saes wih large

rural populaions ace paricular challenges: One-fifh o all Americans live in rural

areas, bu only one-enh o physicians pracice in hese communiies.171

As a 2010 repor rom he Insiue o Medicine on he uure o nursing saed,

“Te asks nurse praciioners are allowed o perorm are deermined no by heir

educaion and raining bu by he unique sae laws under which hey work.”172

Mos saes, or example, require a physician’s supervision or nurse praciioners

o see paiens.173 In many saes, nurse praciioners are limied or prohibied rom

prescribing medicaions, admiting paiens o a hospial, assessing paien condi-

ions, and ordering and evaluaing ess. Nurse praciioners also ace paymenissues. In some saes, nurse praciioners are cerified insead o licensed, which

creaes billing obsacles wih insurance companies and prevens nurse praciio-

ners rom esablishing heir own pracices.174


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A 2013 sudy o he scope-o-pracice laws ha govern nurse praciioners working

in reail clinics, which provide quick diagnosis or reamen or common condi-

ions in reail setings such as grocery sores, ound ha eliminaing resricions on

scope o pracice could resul in large cos savings.175 Te sudy ound ha he cos

per episode reaed in a reail clinic was lower in saes where nurse praciioners

were allowed o pracice and prescribe independenly. I also ound ha care provided by nurse praciioners was o similar qualiy o care provided by physicians.

Saes also have conduced analyses ha show poenial cos savings rom

expanding he scope o pracice or nurse praciioners and physician assisans

in primary care. For example, Florida’s Office o Program Policy Analysis and

Governmen Accounabiliy ound ha he sae’s healh care sysem could annu-

ally save $44 million in Medicaid and $2.2 million in he sae employee healh

insurance plan by expanding scope o pracice.176


Progress is being made: By he end o 2015, 21 saes had changed heir laws o

give nurse praciioners ull pracice and prescripive auhoriy, and anoher six

saes had expanded heir scope-o-pracice laws.177 However, more progress is

possible, especially in he mid-Alanic and Souhern saes, where scope-o-prac-

ice regulaions end o be more resricive. Oher saes should amend heir sae

laws o remove burdensome barriers or nurse praciioners. For example, saes

should require payers o direcly reimburse nurse praciioners who are pracicing

wihin heir scope o pracice as deermined by sae law.178

Apar rom modiying scope o pracice hrough legislaion, sae officials can ake

addiional acions. Saes can review curren scope-o-pracice regulaions and

recommend modificaions. Saes also can se up independen commissions o

review evidence and make deerminaions or recommendaions o he legislaure

and governor on scope-o-pracice issues.


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Institute reference pricing in the

state employee plan

Healh care benefis or sae employees and reirees accoun or a majoriy o he

growh in sae and local governmen healh care spending. Spending on hese

benefis grew 61 percen in jus he pas six years.179

Wih reerence pricing, insurers or employers se a maximum price or wha hey

will pay or a paricular procedure, and paiens are encouraged o shop around o

choose a high-value provider.180 I paiens choose a provider wih a higher price

han he reerence price, hey mus pay he difference. Reerence pricing also canhelp consumers make inormed decisions on heir

Documents

State Options to Control Health Care Costs and Improve Quality