Here’s a surprising outcome of the COVID-19 pandemic: Medicaid managed care plans (MCPs) likely find themselves in a financially advantageous situation. Medicaid enrollment is rising significantly across the country as the result of increases in unemployment and streamlined enrollment processes. At the same time, overall utilization of the health care system has fallen off a cliff due to shelter-in-place orders and social distancing guidelines. Health systems in most places nationwide (New York being a notable exception) have seen declines in emergency department visits for causes such as stroke, heart attack, injuries from car crashes, and gunshot wounds. Hospitals have canceled elective surgeries, and visits for outpatient and primary care services have plummeted to less than half their usual levels. The federal government has also pledged to cover costs for one category of utilization that has risen: COVID-19 response and treatment. To sum it up, income through capitation payments is going up due to increased enrollment, while expenses through payments to providers for services are declining.
At the same time, MCPs, as part of the social safety net—along with all public agencies, philanthropies, community-based organizations, etc.—have to be deeply concerned for the tsunami of social needs that is only beginning to take shape as result of the pandemic and pre-existing resource gaps and structural inequities. Some of these issues have immediate, evident connections to health such as increases in domestic violence, food insecurity, and depression and anxiety brought on by social isolation and pre-existing and new barriers to use of mental health and substance use services. Other issues such as housing instability and economic insecurity will take an enormous toll on health over upcoming years. The social impacts of the pandemic are likely to follow the same racial and socioeconomic contours as the medical impacts, shaped by the same structural and historic factors.
This presents an opportunity. Medicaid generally, and MCPs specifically (given their windfall), could be part of an effective, coordinated response to social needs if federal and state governments clearly signal encouragement for this type of response. In this post, we first discuss the services and sectors in which MCPs should invest and then highlight approaches states can take to support such investments.
Making Effective Use Of Medicaid Managed Care Plans’ Windfall
In the COVID-19 recovery landscape, Medicaid managed care plans can contribute to the nation’s physical, behavioral, and social wellbeing by investing in several key strategies. These include: supporting community health centers, rural hospitals, and community based organizations; training and hiring community health workers; and, providing resources for coordinating entities.
Support Community Health Centers And Rural Hospitals To Address Social Needs
Despite some additional resources from the federal government, the funding of many community health centers (CHCs) and rural hospitals remains extremely precarious, and staff furloughs and layoffs are already happening. MCPs and state Medicaid offices have a major stake in maintaining stability within provider networks, and discussions are underway in many states and at a federal level about how to maintain primary care staffing. With MCP support, CHCs could allocate staff to address behavioral health and social needs – for example, by working with individual patients on housing and economic security and coordinating with other service providers (both of which can happen by phone and video). Such support could both address immediate health-related issues and build relationships and infrastructure that enable effective longer-term partnerships.
Fund Community-Based Organizations On The Frontlines Of The Response And Recovery
Food banks, operators of permanent supportive housing, domestic violence shelters, and other service providers are already seeing a massive increase in demand. Social supports and behavioral health services are going to be increasingly vital as the economic fallout from COVID-19 continues. MCPs have been increasing investment over the past few years to address those issues in partnership with community organizations. Now is the time to expand those investments to support the needs of enrolled individuals, to bolster organizations that serve low-income communities of color, and to expand community capacity broadly.
Train And Hire Community Health Workers
Community health workers (CHWs) play crucial roles in providing support, connecting individuals to services, monitoring community needs, interfacing between clinical and community organizations to ensure efficient use of resources, and supporting contact tracing. Growing the CHW workforce was already a strategy recommended by numerous entities including the California Future Health Workforce Commission. Now, such growth is called for as part of the recovery strategy to respond to unprecedented social needs and the public health priorities of communities. In addition, if implemented carefully, CHW workforce growth could offer new employment opportunities in communities most impacted by COVID-19. Organizations that train and coordinate CHWs are in place in many communities and can help to manage and scale up operations quickly.
Support Coordinating Entities
Resources from government, philanthropy, and the private sector are going to flow quickly into communities. Communities with greater collective health capacity fare better under normal circumstances; those distinctions can only become more pronounced in the fog and chaos of an outbreak. It is easy to imagine scenarios in which existing silos lead to duplicative and wasteful spending. Existing resources in each state will look different; in California, for instance, there are number of recent efforts such Whole-Person Care pilots and Accountable Communities for Health sites that are notable for the explicit focus on improved coordination and priority setting with robust community participation. Even modest MCP contributions to coordinating efforts would go a long way to supporting traditionally unfunded, but critical, activity and drawing other key entities to the table.
Support From Medicaid Administrators Is Necessary
As noted previously, it is unrealistic to expect MCPs to make these sorts of investments if there is not a clear signal of support from state and federal leaders. Without some assurance, plans will likely be concerned that profits will be “clawed back” by the state or negatively affect long-term financial health. When John Snow, Inc. surveyed and interviewed California MCP leaders last year, we heard clearly that the greatest barrier to expanded investment to address social determinants of health were concerns about financial risk and effects on rate setting. Our colleagues at Episcopal Health Foundation found a similar sentiment when researching the perspective of Medicaid plans in Texas.
States across the country have developed a number of different models to support expanded MCP investment to address social issues. North Carolina designed the Healthy Opportunities Pilot to fund regional coordinating entities to implement evidence-based non-medical services to address priority health concerns. Oregon’s Coordinated Care Organization 2.0 proposal includes expanded payment for health-related services and a Bonus Fund for achieving milestones related to social determinants and health equity. A number of states, including Washington, are exploring ways to build social spending directly into the rate-setting process for MCPs through a social-loss ratio or other mechanism. States could use their existing authority and/or request flexibility from the Centers for Medicare and Medicaid Services through waivers or Disaster State Plan Amendments to support the strategies described above and these existing state models.
There are important questions about the right way to create more flexibility in the use of health resources to address social factors sustainably. This crisis creates an imperative for the public sector to test answers to those questions immediately while becoming an integrated part of local recovery. The alternative is to be cautious, wait for social and economic despair to manifest as health conditions, and provide clinical treatment then.