Medicaid at 50: More States Using Flexibility to Cut Costs, Improve Health

Colorado and Oregon are using their Medicaid flexibility to adopt innovative strategies that cut costs while improving beneficiaries’ health, such as by reducing emergency room (ER) visits and better coordinating care for people with chronic conditions.  These initiatives — and similar ones in other states — are much better than punitive steps like imposing monthly premiums and excessive copays, which only deprive low-income individuals of coverage or needed medical care.

Colorado’s Accountable Care Collaborative (ACC), launched in 2011, focuses on integrating care from health care providers across multiple disciplines, including primary and specialty care as well as community-based services.  The gains have been significant.  Adults enrolled in ACC for more than six months had about 8 percent fewer ER visits between July 1, 2013 and June 30, 2014 than adults not enrolled, as well as fewer hospital readmissions within 30 days for the same diagnosis.  Colorado also saved $29-33 million from the program.

Under Oregon’s Medicaid waiver, coordinated care organizations have broad flexibility to provide an array of services to improve Medicaid’s service delivery and the health of its beneficiaries.  This approach has generated a 21 percent drop in ER visits and large reductions in hospitalizations for people with chronic conditions: a 48 percent decline for chronic obstructive pulmonary disease, 34 percent for congestive heart failure, and 39 percent for adult asthma. 

Kaiser’s interactive map has more examples of how states are using Medicaid’s flexibility to implement delivery system and payment reforms.