Jim Tallon: Getting from Here to There
It’s truly been a remarkable year. No sooner had President Obama signed into law the Affordable Care Act—establishing health care reform policies that had eluded enactment for more than half a century—than it became apparent that the extended political debate on reform, and now on the national debt, had not only continued but intensified. That debate continues to build: we are, as a nation, moving forward, but questioning every move along the way.
States, too, have engaged in intense ACA-related activity. Even as they prepare for implementing its provisions, almost two dozen states are vigorously opposing the law in the courts. Feeling the intensity of budget deficits, many are also debating the very existence of the Medicaid program.
New Yorkers have also had a remarkable year. Led by the new administration in Albany, there has been building consensus on the need for broad Medicaid reforms. But while recognizing our financial constraints, New York’s legislators avoided wholesale redesign. In fact, the New York discussion—though built on caps and cuts—has, in effect, created bipartisan affirmation of our revised but still comprehensive $50 billion Medicaid program.
A CLASH OF NEEDS
Those unresolved tensions so prominent throughout the country reflect the extraordinary challenges at hand. Four issues, in particular, exemplify the significant conflicts underlying our work in New York.
The first stems from New York’s decision to significantly cap the growth in Medicaid spending this year and next, while also acknowledging the chronic problem of some 800,000 legally resident New Yorkers who are eligible for Medicaid but not enrolled. In reining in growth while vigorously improving enrollment and retention procedures, and moving from local to full State administration of Medicaid, New York has set itself an immense challenge, one requiring stringent management and transparency.
A second issue, periodically highlighted by Fund analyses, is the dire financial condition of the “safety net” hospitals that have traditionally served large numbers of Medicaid beneficiaries. The approach to this critical issue by the Medicaid Redesign Team has been to focus on plans for mergers, closures, and restructuring. This means implementation of significant change in Medicaid at the same time that at least several of its major providers will be subjected to downsizing or closure. Again, transparency will be critical to achieving support for these painful transitions.
The third challenge relates to New York’s planned strategy of adding, to the more than three million Medicaid beneficiaries already enrolled in managed care, patients whose needs are medically complex and whose costs are historically high—many of them individuals with complex chronic illness or mental illness, or those dually eligible for Medicaid and Medicare, among them high intensity users of long-term care services. While the vision, for these patients, of better-coordinated care is almost universally endorsed, the organizational responsibility and skill needed to implement this major strategy of the Medicaid redesign effort must be developed in the months and years ahead.
Finally, the various policy changes inherent in the issues highlighted above need consistency with each other if lasting improvement is to occur. In supporting the development of a new category of provider, accountable care organizations, Medicare will be modifying and enhancing its fee-for-service payment system. In grappling with the complex physical and mental health care needs of its highest-cost beneficiaries, New York will expand on a managed care approach long rooted in insurance plans. Commercial insurance companies will continue their practice of negotiating varying rates of payment with health care providers. Evolving and advancing coherent and improved payment practices among the varied payment approaches of Medicare, Medicaid, and commercial insurance may well prove the key to achieving large-scale improvement in how services are delivered.
THE WAY FORWARD
These are all enormously complex problems, but they are also all solvable. The signing of legislation, I’ve learned over the years, is a moment of great ceremony, but one that actually begins a process rather than concludes one. Successful implementation of a dramatically improved health care system will require leadership, adult conversation, and the will to embrace innovation. Here at the Fund we’ll be increasingly focusing on that last element, innovation, as we seek and create opportunities for significantly better-coordinated delivery of services.
This commentary in the "A Word with Jim" series was originally published in Blueprint.