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Fiscal Fitness: How States Cope
DE Medicaid looks to disease management for long-term savings
Not surprisingly, the biggest current fiscal challenge for Delaware Medicaid is the dramatic increase in enrollment over the past two years, according to Rita M. Landgraf, secretary of the state's Department of Health and Social Services.
The Medicaid program's total enrollment was 194,200 as of December 2010, which is a 25% increase over enrollment two years earlier, says Ms. Landgraf. "At the same time, we are facing a loss of enhanced federal funding at the end of June 2011," she says. "This means additional state funds will be needed just to maintain the current level of services."
Since Maintenance of Effort requirements in the Patient Protection and Affordable Care Act (PPACA) prohibit restricting eligibility, says Ms. Landgraf, the department is looking to benefits and provider rates to control costs.
Ms. Landgraf expects health care reform to bring an additional 17,000 to 25,000 people onto Medicaid, with the expansion of eligibility to 133% of the Federal Poverty Level (FPL) in January 2014.
Health benefit exchanges, in combination with changes in insurance regulations and government-administered programs, will offer individuals seamless and continuous coverage, says Ms. Landgraf. "Enhanced technology will benefit both the Medicaid program and private insurers," she adds. "Of course, developing that technology by January 2013 could bring its own challenges."
Currently, about 79% of the Medicaid population is enrolled in two managed care organizations, reports Ms. Landgraf. "We are exploring expanded managed care service delivery to our long-term care population, as a way to enhance community supports for this population," she adds.
Potential fiscal savings
Delaware qualifies as an expansion state under the ACA, says Ms. Landgraf, because eligibility was extended to all adults at or below 100% of FPL as part of a demonstration program implemented in 1996. "We will receive an enhanced federal matching rate for this group of individuals," she says.
For long-term savings, though, Ms. Landgraf says that "the most effective changes can be made with regard to lifestyle issues."
Delaware's Medicaid managed care programs currently provide disease management programs, including smoking cessation and obesity initiatives, notes Ms. Landgraf.
"The ACA provides for grant opportunities that would allow us to do even more," she says. "While they are not defined as disease management programs, there are a number of provisions or demonstration projects that may assist states in their efforts to improve the quality of health care."
Ms. Landgraf notes that the leading cause of death for Delawareans is heart disease, "with the actual causes of heart disease being tobacco, poor diet, and lack of exercise."
Obesity is the second leading preventable cause of death, she adds. "In 2009, 36.1% of adults in Delaware were overweight, and an additional 27.6% were obese," says Ms. Landgraf. "Sadly, the numbers aren't much better for children."
In 2008, 17% of Delaware's children were overweight, with 24% considered obese, notes Ms. Landgraf, and in the period from 1990 to 2007, the number of obese adults in Delaware doubled. In 2009, 54,400 adults in Delaware were told they had diabetes, says Ms. Landgraf, and 36,000 were told they were pre-diabetic.
Studies show that a two-year window exists to keep a pre-diabetic person from developing the disease, says Ms. Landgraf. "If pre-diabetics undertake lifestyle changes allowing them to achieve a five-to-seven percent weight loss, we will reduce the onset of Type II diabetes by 58%," she says. "Strong financial benefits can be felt as well."
Today, medical expenditures in Delaware connected to obesity are $207 million, says Ms. Landgraf, with the cost of care related to smoking coming in at $473 million. Adults in Delaware diagnosed with diabetes have medical expenditures that are 2.3 times higher than those without diabetes, she adds.
"It is estimated that medical expenditure savings following a 50% reduction of prevalence in diabetes and high blood pressure, and the heart disease, cerebrovascular disease, and renal disease that accompany it, would be $33 million per year in the short run, and $92.4 million in the medium run," says Ms. Landgraf.