So if we're thinkng about modifying the formula for determining the State and local shares of Medicaid expenditures and if we should change the focus of policymaking and reporting from providers to clients – less client eligibility than managing client health, then why not combine the two into an integrated whole?
The intent of these proposals is not merely to shift the financial burden from one jurisdiction and one set of taxpayers to another. Rather, it is intended to reinforce shifting from a provider to a client focus and to align financial with policy and managerial responsibilities. To the degree that this alignment encourages the necessary efforts to optimize care of vulnerable clients, it will pay for itself with increased cost-effectiveness and productivity.
We offer two approaches both of which would cause the State to focus more management attention on chronically ill and/or high cost clients, and neither of which is provider-based.
The more dramatic approach would be for New York State to gradually assume full financial responsibility for Medicaid expenditures for the SSI and SSI-Related population. This is client focused, but would be quite expensive. (There is a proposal floating around to pick up the local share of costs of Family Health Plus. It's also client focused, but it doesn't take on the higher cost population with more opportunities to manage health and simultaneously control costs.)
We could also align the State's management and financial responsibilities for Medicaid by having the State assume full financial responsibility either for all SSI clients or for all clients whose total costs of care exceed pre-set financial thresholds For example, the State could assume full responsibility for expenditures for any client:
That are in excess of a given amount (say $30,000) during a given year; a higher amount for a given multi-year period (say $100,000 for a three-year period); and a still higher amount for the client’s life (say $250,000);
Who has been continuously enrolled either as an elderly person or as disabled for a period exceeding a given period (say 36 months); or,
Who has been discharged from a State institution or any other program for which the State assumed full non-federal financial responsibility.
We have not yet estimated the financial effects of this proposal, but note that it is quite flexible because the dollar thresholds can be easily moved up or down, changing the financial effect. It also has the advantages of being client/patient focused rather than provider focused and would be equivalent to creating an individual insurance “stop-loss” program to protect county finances.
But there would be another managerial/operational benefit as well. As discussed earlier, the next key stage in managing the Medicaid program is managing the health of high risk Medicaid clients. These tend to be complex cases with long term effects both for the client and for expenses. While the State sets the policy and has the tools and resources, in the current environment the State does not have much incentive to engage with respect to these client-patients. The above formula change would more closely align financial, managerial, and policy responsibilities. Unlike some other proposals like those that focus on long term care, this proposal does not create a financial incentive to focus on a class of providers. Simply put, the higher the total cost of care for all services for an individual client, the greater the financial incentive for the State to effectively optimize their health and functioning. This is consistent with the approaches offered to do just that.