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Vorys Health Care Advisors

Transforming Health Care Delivery – If not now, when?

Posted in Health Care Reform, Medicaid, Physical and Behavioral Health Integration

Change may be the only constant in health care. Some suggest that the Affordable Care Act (ACA), with its emphasis on the integration of services, elimination of system inefficiencies and commitment to payment reform, is synonymous with the changing tides in health care – even though the political debate around its merits is far from over.

What is certain is that the health care delivery system we’ve known for the last half century is changing, perhaps radically, for patients (consumers), providers, payers and the public. 

Researchers at PricewaterhouseCoopers have identified an emerging trend in major health systems around the world, including the United States.  In response to the global recession and pressure to keep a lid on rising health care costs, policy leaders are preparing for fundamental structural changes in the delivery of health care.  Further, PwC expects that:

[O]ver the next five years, the trend will lead to significant health industry business model changes, more regulatory reforms focused on efficiency and effectiveness, greater investments in prevention and a growing role for information technology to enable information-sharing and provide interactive, customized care in a virtual world.

This projection gives us a rather ambitious if not daunting change agenda, part of which is already being framed. Integration of physical and behavioral health care is but one example of this movement toward large-scale structural change.

Federal health policy today requires state Medicaid directors along with their counterparts in agencies delivering Medicaid-funded services to develop new business models that promote successful outcomes and cost efficiencies by integrating physical and behavioral health services. It also requires health insurers – both public and private – to make sure treatment limitations and financial requirements are no more restrictive for patients seeking mental health and substance use disorder services than for patients seeking medical/surgical services.  True parity between physical and behavioral health services is another example of impending systemic change.  [Click here for a PDF version of the Mental Health Parity and Addiction Act of 2008] 

Why integration?

The case for integration and funding equity is compelling.

Systemic Obstacles

A compelling case is not enough to produce change. To be effective, the integration of care delivery must overcome a variety of systemic obstacles, including these:

  • The bifurcation of physical and behavioral health care is a powerful tradition that is embodied in historical practices – and often in states’ statutory and constitutional laws. Effective integration will require new practices that involve greater short-term costs, even as they promise long-term savings and better care, which mostly likely will make this innovation less attractive for states faced with tight budgets and mounting deficits.
  • New practice structures require organizations to reach beyond traditional boundaries – to work with other entities to achieve a common objective. Many organizations find it difficult to overcome the “defenses” that stand in the way of this kind of collaboration. In the case of behavioral health, reimbursement issues, certifications, licensure and other legal requirements can frustrate efforts to integrate health care delivery.
  • All managers have two jobs – handling today’s issues and preparing their organizations for the future. Yet, the cultures of many organizations compel their leaders to focus on immediate needs, placing a premium on stability and short-term performance. Innovation and the urgency for change are resisted because they involve risks, require imagination and creativity, and offer only limited and often delayed rewards.

Back to the Future

Overcoming some of the historic obstacles to integrated care, while enhancing care coordination in the treatment of both physical and behavioral conditions, is a challenging task – not one for the timid. Yet, those daring enough to confront this challenge would be well advised to take another look at existing and emerging Medicaid resources that hold some promising answers. Because of the significant role Medicaid plays in the payer mix, it acts as a huge lever to facilitate change in the health care delivery system as a whole.

Vorys Health Care Advisors respects the importance of Medicaid in providing essential services. We also appreciate its role in driving widespread change. Consider, for example, how existing and new Medicaid policy “tools” – embraced creatively – can change health care delivery:

  • North Carolina: Medicaid-funded services for mental health, substance abuse and developmental disabilities are provided on a capitated basis through a prepaid inpatient health plan (PIHP) under a 1915(b)/(c) Medicaid waiver. The combined (b)/(c) waiver will work in conjunction with Community Care of North Carolina, a primary care case management model already in place, to coordinate physical health care services to portions of the state’s Medicaid population. [LINK]
  • Arizona: Already operating under a 115 waiver, state health officials are developing an integration plan under the authority of section 2703 of the Affordable Care Act, which allows for the development of health homes for people with serious and persistent mental illness (SPMI) and co-occurring disorders.  This work will be supported by an already awarded CMS dual-eligible planning grant. Under the program, specialty Regional Behavioral Health Authorities (RBHAs) will manage all physical and behavioral health services for Medicaid consumers with SPMI, under the authority of the state’s behavioral health agency. Implementation will begin in Maricopa County, with possible expansion into other geographical areas and/or behavioral health categories over time.  [LINK]
  • Kansas: The state is working to enroll nearly all Medicaid recipients into managed care plans (MCPs) that will provide comprehensive health, mental health and long-term care services on a capitated basis, using a health home model. Along with other interesting features, 1915 (B) and (C) waiver authority will be utilized to provide home- and community-based services to seriously emotionally disturbed children under the authority of the managed care plans.

These are common sense yet innovative solutions for those who see the integration of physical and behavioral health services as an imperative whose time has come. Integration has huge benefits for the consumers of health care, just as it has serious implications for service providers and for those who pay for them.

This kind of service integration has been talked about for a long time and there have been some serious efforts to transform care delivery in this way. It’s time!

Let us know how Vorys Health Care Advisors can help your organization meet this and other challenges in a health care system that demands more accountability with expectations for better results.