Coordinated Care as a Cost-Saving Solution: Don’t Count on It

Existing empirical evidence suggests policymakers shouldn’t count on the large Medicare savings some have projected will stem from either a managed care or coordinated care solution, according to a Kaiser Family Foundation Issue Brief.

The approximately seven million Americans who are dually eligible for full Medicare and Medicaid benefits are costing both systems a significant amount of money, but programs meant to achieve cost savings while providing better care are barely saving any money, says Kaiser.

While several pilot programs meant to improve care for the dual eligible population have been successful in reducing hospitalizations, only a couple programs have actually achieved cost savings to Medicare and Medicaid.

The two capitated managed care plans that did reduce hospitalizations and spending are the Commonwealth Care Alliance’s Disability Care Program (Medicaid savings) and the SCAN Health Plan (Medicare savings).

The report notes that none of the FFS-based care management programs that showed strong evidence of cost-savings served populations who required substantial amounts of long-term supports and services. That makes it hard to say whether these approaches would work for the 36% of dual eligibles who require these services, Kaiser says, and those care coordination programs might not be as effective at reducing hospitalizations among that more complex and expensive “subgroup” of dual eligibles.

“A careful review of the literature thus far raises questions about the potential to achieve large savings, without jeopardizing the quality of patient care, through capitated managed care programs or care coordination approaches in the [fee-for-service] environment,” says Kaiser in the brief. “At the same time, there is evidence to suggest more modest savings are achievable, if programs are highly targeted.”

Read the Issue Brief.

Written by Alyssa Gerace