“Change is not easy,” Sangvai told the panel. “We encourage you to look at the infrastructure that’s been put in place to implement new value-driven systems for the private sector and Medicare.”
Sangvai was one of 50 representatives of health care groups and individuals who addressed the panel during their all-day public forum in Raleigh.
Adoption of value-driven principles, which are already proving effective in Accountable Care Organizations (ACO) like Coastal Carolina Health Care in New Bern, would accomplish the state’s goals of budget predictability and sustainability for Medicaid as well as treating the whole patient. Coastal Carolina recently shared quarterly results of 25-30 percent savings for their Medicare/Medicaid dual eligible patients.
Shifting from the fee-for-service model, which has led to the current “silos” where the basis for payment is on the volume of services delivered, to a reimbursement system based on coordinating care across all providers to serve the patients’ entire spectrum of needs would help break down the silos and provide powerful incentives for everyone to work together.
As Sangvai pointed out, “Right now there are Medicare-approved ACOs that geographically cover 50 percent of North Carolina’s population. With the addition of other qualified ACOs, the large majority of Medicaid recipients could be in a value-driven arrangement in less time than it would take to implement a traditional managed care program.”
Part of that success would depend on NOT dividing the state into regions as the North Carolina Department of Health and Human Services has stated it is considering. Such regionalization would undermine competition and prevent Medicaid from using private sector and Medicare infrastructure already in place.
As the ACO gains expertise it would begin a gradual shift to increase the financial risk to providers when costs exceed projections.
Dr. Sangvai concluded: “It is important to consider that this approach to payment reform is being embraced by private sector plans, primarily because they are facing the same challenges as Medicaid, and strategies of managed care companies of the past 30 years have not been successful.”
The NCMS will continue to work as partners with the NC Department of Health and Human Services as well as other stakeholder groups to strengthen the state’s Medicaid program and increase access for our state’s most vulnerable citizens.