This paper reviews proposed reforms to strengthen Medicare’s long-term fiscal outlook. Looking beyond provider payment reductions, the author assesses leading strategies to improve quality of care and efficiency within Medicare as well as the overall health care system. The paper argues that many of the most prominent proposed reforms are not likely to achieve savings for Medicare in the next 10 years, but identifies approaches that hold real promise for generating savings by either reducing chronically ill beneficiaries’ need for expensive services or changing providers’ practices in ways that decrease unnecessary procedures and inefficiencies. A companion paper synthesizes evidence on cost-effective interventions, identifies issues to resolve for ongoing research, and recommends care coordination policies supported by available evidence.

Numerous studies have documented that a relatively small percent of Medicare beneficiaries with multiple chronic conditions account for the vast majority of Medicare spending. This paper synthesizes evidence on cost-effective interventions and their components, identifies issues that must be resolved for ongoing research, and presents recommendations for care coordination policies in health care reform that can be supported by available evidence. The author highlights three interventions that have reduced hospitalizations for the target population: transitional care, self-management education, and coordinated care. Policy recommendations include offering vehicles for physicians in small practices to participate in an effective care coordination intervention, targeting medical homes and care coordination interventions to beneficiaries at substantial risk of hospitalization in the coming year, and creating incentives for hospitals to participate in transitional care interventions.

Presents findings from the third report to Congress on the Medicare Coordinated Care Demonstration.

This report presents the research design for the evaluation of the Money Follows the Person program implementation and effects on participants and the long-term care system. Under the program, 31 participating states are providing enhanced services to help interested Medicaid beneficiaries in long-term care institutions move back to the community. States receive funds from the program’s augmented federal matching rate for support services provided to those who make the transition. States are expected to use these funds to improve long-term care systems and options for beneficiaries wishing to remain in the community.

This study randomly assigned Medicare fee-for-service beneficiaries who had chronic illnesses and volunteered to participate in 15 care coordination programs to treatment or control status. Nurses provided patient education (mostly by telephone) to improve adherence and ability to communicate with physicians. The findings after two years show that few programs improved patient behaviors, health, or quality of care. The treatment group had significantly fewer hospitalizations in only one program; no program reduced gross or net expenditures. However, effects may be observed after four years of followup are available and sample sizes increase.

This articles examines interim impacts of a disease management demonstration for Medicare fee-for-service beneficiaries also enrolled in Medicaid (dual eligibles). The study randomly assigned dual eligibles with congestive heart failure, coronary artery disease, and/or diabetes to treatment or control groups for a population-based program that provides telephone patient education and monitoring services. Findings during the first 18 months show virtually no overall impacts on hospital or emergency room use, Medicare expenditures, quality of care, or prescription drug use for the 33,000 enrollees. However, for beneficiaries with congestive heart failure who resided in high-cost counties, the program reduced Medicare expenditures by 9.6 percent.

Before Medicare Part D, Congress authorized the Medicare disease management demonstration to evaluate whether disease management programs—in conjunction with a comprehensive prescription drug benefit—could improve health outcomes and reduce Medicare expenditures. The demonstration targeted fee-for-service Medicare beneficiaries with advanced congestive heart failure, diabetes, or coronary artery disease. This congressionally mandated study found that, based on the population-based random assignment design, none of the three demonstration programs had impacts on key outcomes of Medicare Part A and B expenditures and service use.

Beneficiaries with chronic diseases account for nearly two-thirds of all Medicare expenditures. The mandated Medicare Coordinated Care Demonstration tested specifically whether care coordination programs reduced hospitalizations and Medicare expenditures and improved quality of care for chronically ill Medicare beneficiaries in 15 demonstration sites. This third report to Congress synthesizes findings from more than four years of the demonstration programs’ operations, and provides the most comprehensive and rigorous estimates ever presented on the effectiveness of care coordination interventions in a Medicare fee-for-service setting. Only 2 of the 15 programs resulted in reduced hospital admissions, and none of the programs generated net savings. There were few effects on beneficiaries’ adherence to prescribed medication, diet, or exercise regimens. The report describes ways in which the more successful programs differed from the unsuccessful ones and concludes that programs with these features could generate savings for Medicare if implemented for a high risk target population.

Presentation for the annual conference of the National Academy of State Health Policy held in Denver, CO.

To address the needs of Medicaid beneficiaries who are elderly or disabled and desire greater control over their personal care, the federal government has encouraged states to offer consumer-directed options. One of the most innovative and flexible consumer-directed-care models is Cash and Counseling, recently tested in a demonstration program in Arkansas, Florida, and New Jersey. The program gives consumers a monthly allowance that they may use to hire workers and to purchase care-related services and goods. This report summarizes findings from five years of research on how each of the three demonstration states implemented its program, and on how the programs have affected consumers who participated, consumers’ paid and unpaid caregivers, and costs to Medicaid. The findings from the randomized trial study design show that the program had overwhelmingly positive effects on consumers of all ages and their caregivers. However, in each state, total Medicaid expenditures were higher under the program than what they would have been in its absence, for different reasons. States interested in offering a Cash and Counseling program or similar consumer-directed options may benefit from the report’s discussion of lessons learned about how to control costs.

Briefing to the Congressional Budget Office, Washington, DC.

Presentation for the AcademyHealth Annual Research Meeting, Orlando, FL.

Care for beneficiaries with chronic illnesses, such as heart disease and diabetes, is a major expense to the Medicare program, and a major detriment to beneficiaries’ quality of life. The Medicare Coordinated Care Demonstration is testing whether case management and disease management programs can lower costs and improve patient outcomes and well-being in the Medicare fee-for-service population. This publication, the source for a recent report to Congress, details findings from 15 programs during the first two years of Mathematica’s study, the largest random assignment study to date of disease management/case management programs. The report focuses on program impacts over the first year after enrollment for beneficiaries who enrolled during the first year, and over the first 25 months of operation for all enrollees. Findings include program-specific estimates of impacts on survey-based measures of patients’ health status, knowledge, behavior, satisfaction with their health care, quality of care, and quality of life; and claims-based measures of patients’ Medicare service use and expenditures, and the quality of care received. The findings in brief indicate that patients and physicians were generally very satisfied with the program, but few programs had statistically detectable effects on patients’ behavior or use of Medicare services.

Reviews key elements of the evaluation design and resolution of methodological issues. Includes a discussion of research questions, data sources, random assignment, measurement, analytic methods, and design limitations.