Policy Brief Tackles Waiver Policy

A policy brief issued this week summarizes the many facets and programs of the recent federal Medicaid waiver agreement — including one program that few people know about, and which could have a profound effect on public hospitals in California.

“It’s a very exciting and critical element of the waiver,” according to Melissa Stafford Jones, president and CEO of the California Association of Public Hospitals and Health Systems.

“It embodies the principles of health care reform into a system that’s smarter and provides more coordinated care,” Stafford Jones said. “It really puts California at the leading edge of that national effort.”

The idea, spelled out in the CAPH policy brief,  is for public hospitals to pool money, and have the federal government match those funds at a rate of $600 million the first year, $650 million the second year, and $700 million for three more years.

But the twist is, those hospitals only get that money if they hit certain predetermined quality and improvement markers — giving those hospitals strong incentive to improve care and make their delivery system work better.

“It’s the ultimate pay for performance,” Stafford Jones said. “It combines payment reform with accountability for public hospital delivery systems — establishing medical homes, reducing readmission rates, integrating specialty and primary care,” she said.

“And public hospitals will only be able to access that funding if they can achieve those goals.”

For instance, she said, hospitals could target improvement of care for patients with chronic illness, such as diabetes.

“So if you wanted to treat diabetes in a better way, not only improving care of diabetics but also their health status, you could increase the number of patients assigned to a medical home, you could make sure they’re getting all of the tests they should be getting, and doing that on a proactive basis, you could set milestones like do diabetics have blood sugar levels that meet a certain standard for making sure those levels are under control.”

If public hospitals meet some of those milestones, she said, they get paid for it, the quality of patient care rises and more effective systems are put in place to make sure those improvements happen on a regular basis, even after those incentive payments are gone.

“The [pool] is doing all of that in ways that are reflective of our hopes for the entire delivery system,” Stafford Jones said. “That is, a delivery system that is grounded in better patient care and care management, that is more efficient and provides higher quality care.”

Related Topics

Capitol Desk Medi-Cal