As Lawmakers Look to Cut Medicaid Costs, Academy Leader Points to Possible Solution

As Congress, the Obama administration and states struggle to find ways to cut Medicaid costs while improving the quality of patient care, lessons learned from a primary-care-based Medicaid management program in North Carolina could hold the answer, according to AAFP Director Conrad Flick, M.D., of Cary, N.C., who spoke here recently at a briefing on the status of Medicaid.

The Community Care of North Carolina, or CCNC, program could improve the quality of Medicaid services and save billions of dollars in the process during the next few years, said Flick during a June 28 Partnership for Medicaid briefing. The Partnership for Medicaid is a nonpartisan, coalition of organizations, including the AAFP, that represent physicians, other health care professionals, safety net health plans, counties and labor. The goal of the coalition is to preserve and improve the Medicaid program.

During the briefing, Flick, who practices at Family Medical Associates of Raleigh, and other speakers pointed to the CCNC program as an example of how Medicaid could be reformed. CCNC has improved quality and saved billions in health care costs by relying on patient-centered medical homes and care coordination to deliver care to most of the state's Medicaid population, according to Flick.

"We cut costs primarily by providing greater quality and improving efficiency," he said. "By that, I mean we provide the same services that we always have. We don't decrease the access, and we don't decrease the number of needed services. We just find the efficiencies in the services themselves."

Flick described CCNC as a public-private partnership composed of 14 physician-led networks, 4,500 primary care physicians and more than 1,400 medical homes that cover the entire state and provide care to 1.1 million Medicaid beneficiaries. CCNC links local community providers, including health systems, hospitals, health departments and other community providers, with primary care physicians. Each network provides local care managers, pharmacists, psychiatrists and medical directors to improve local health care delivery, according to Flick.

The networks also conduct pilot projects to determine what works best, Flick said. "When we find something that works, that is (then) shared throughout the network, and it is shared across the state."

For its part, North Carolina identifies priorities and provides financial support through an enhanced per member, per month fee to the community networks. In addition, the state provides data to the networks and the physicians themselves through an informatics center, which allows physicians and other providers to see what needs to be changed, said Flick. It "is our database -- our data exchange," said Flick of the informatics center. "The information is there at our fingertips."

During the briefing, Flick also reviewed some of the cost savings generated by the CCNC. For example, he noted, the program saved an estimated $1.5 billion in Medicaid costs from 2007 to 2009, even though North Carolina has one of the highest Medicaid payment rates in the nation, and the state pays the networks and the primary care physicians the per member, per month fee.

"These are real dollars saved, both for the state and the federal Medicaid match," Flick said.

At the same time, CCNC is in the top 10 percent in Healthcare Effectiveness Data and Information Set measurements for diabetes, asthma and heart disease compared to commercial managed care, said Flick.

He also noted that the highest-cost patients in Medicaid are the hardest to manage because they often have multiple conditions. These patients require the kind of care that primary care physicians specialize in, said Flick. "A lot of (physicians) out there can take care of a single acute illness, but when you talk about having four or five things together -- that is what I do many times a day, every day."

During the briefing, Dan Hawkins, senior vice president for public policy and research at the National Association of Community Health Centers, described CCNC as "the best example of where a financing system chose to recognize and revamp the delivery system of care to focus on patient-centered care. This is not just widget-counting, fee-for-service gerbils on a treadmill kind of care," he said. "It is proactive, not reactive."

The ailing economy has created a greater need for Medicaid services, noted Flick, putting patients and physicians in a Catch-22 situation as state governments attempt to reduce services. "If access to the providers is not there, then (beneficiaries) end up in the emergency departments in hospitals -- with an increase in the overall cost of the program," he warned.