B I E N N I A L R E P O R T 2 0 0 6

I N T E G R AT E C A R E

I M P R OV E Q UA L I T Y

R E D U C E D I S PA R I T I E S

Improving Medicaid Quality:Opportunities to Lead

Center for Health Care Strategies, Inc.

CHCS

TRANSFORMING MEDICAID requires a bold shift in focus — from an emphasis on con-trolling costs in the short-term to a focus on investments in quality that will improve health

outcomes and enhance the long-term viability of thenation’s health care safety net.

IT REQUIRES INNOVATIVE THINKERS willing toroll up their sleeves, forge new partnerships, designand test novel programs, relentlessly measure results,learn from mistakes, and press on.

IT REQUIRES LEADERS who truly believe thatimproving the quality of heath care services can bothdeliver better outcomes and lower costs, particularlyfor people with chronic health needs.

MEDICAID’S TRANSFORMATION IS UNDERWAY.And the Center for Health Care Strategies (CHCS)is fortunate to be partnering with states, health careorganizations, physicians, and consumer groups acrossthe country that are committed to providing the bestpossible, most cost-effective care for the millions ofAmericans served by Medicaid and other publiclyfinanced programs. Together we are creating oppor-tunities to lead improvements in the national healthcare system.

CHCS is promoting national efforts to shift the focus from

managing costs to managing care.

Medicaid provides essential care for an ever-increasing number of Americans. Improvingcare for the program’s highest-cost individuals can significantly stretch the value of thepublic health dollar.

The Medicaid program:• Covers more than 55 million people.• Costs $329 billion annually.• Spends 70% of its resources on 25% of population.

Coverage versus Cost

The Face of Medicaid

25%

75% 70%

30%

Children and Non-disabled Adults

Elderly and Disabled Adults

Sour

ces:

Con

gres

sion

al B

udge

t O

ffice

and

Kai

ser

Com

mis

sion

on

Med

icai

d an

d th

e U

nins

ured

.FY

200

5.

Beneficiaries Costs

I M P R O V E Q U A L I T Y

ALL AMERICANS, NO MATTER WHO THEY ARE, RECEIVE

RECOMMENDED HEALTH CARE ONLY ABOUT 50 PERCENT

OF THE TIME. FOR SOME, ESPECIALLY LOW-INCOME

PEOPLE WITH CHRONIC DISEASES, THE WRONG CARE

CAN TRANSLATE INTO COSTLY EXACERBATIONS OF THEIR CONDITIONS.

FOCUSING QUALITY IMPROVEMENT EFFORTS ON MEDICAID’S HIGHEST-COST

POPULATIONS CAN BETTER DIRECT RESOURCES AND DELIVER HIGHER VALUE

FOR PUBLIC HEALTH INVESTMENTS.

CHCS PROGRAMS

• Regional Quality Improvement: Leveraging Medicaid’s ability to lead system-wide improvements in chronic care.

• Medicaid Value Program — Health Supports for Consumers with Chronic Conditions:Developing and testing new models of care delivery for Medicaid consumers with multiple chronic conditions.

• Business Case for Quality: Testing whether “quality pays” by measuring the costs and benefits of evidence-based quality improvement efforts.

• Plan/Practice Improvement Project: Working with Medicaid health plans and providers toimprove asthma care, with the goal of dramatically reducing asthma-related hospital utilization.

• Best Clinical and Administrative Practices (BCAP): Applying a quality improvement framework designed specifically for Medicaid health plans.

• CHCS Purchasing Institute: Assisting states on salient issues such as aligning reimbursementwith quality and designing programs for people with disabilities.

CHCS is fostering new solutions to improve the qthe cost of care for peopl

National Participation in CHCS Quality Initiatives

• 43 states have participated in thePurchasing Institute.

• 150 health care organizations have participated in Best Clinical andAdministrative Practices.

quality and reduce le with chronic health needs.

Action Steps for Medicaid QualityThrough a decade working with national Medicaid leaders, CHCS has identified eight essentialstrategies critical to comprehensive chronic care. States and health plans participating in CHCSinitiatives are pursuing these strategies.

1. Endorse evidence-based practices to guide appropriate care.

2.Adopt standardized process and outcome measures.

3. Support innovative health information technology to inform quality decisions.

4. Promote continuous quality improvement for states, plans, and provider practices.

5. Implement pay-for-performance strategies to reward improvements in care.

6. Build multidisciplinary care management approaches.

7. Integrate acute, long-term, and behavioral health services.

8. Engage consumers in managing their own care.

HEALTH CARE DISPARITIES ARE AN UNACCEPTABLE REALITY IN THE UNITED

STATES. MEDICAID, WHICH SERVES A DISPROPORTIONATE NUMBER OF

RACIALLY AND ETHNICALLY DIVERSE CONSUMERS, CAN LEAD THE NATION

IN UNCOVERING HEALTH DISPARITIES AND DEVELOPING STRATEGIES TO

REDUCE INEQUITIES IN CARE.

CHCS PROGRAMS

• Leveraging Data to Reduce Racial and Ethnic Health Disparities: Assisting statesin applying new data analysis and contracting strategies to reduce health disparities.

• Improving Health Care Quality for Racially and Ethnically Diverse Populations:Testing Medicaid health plan strategies to improve care and reduce disparities in theareas of birth outcomes, asthma, diabetes, and immunizations.

• National Health Plan Collaborative to Reduce Disparities and Improve Quality:Testing ways to improve diabetes care and reduce disparities within nine of the nation’slargest commercial health plans, serving 76 million members.

RE

DU

CE

D

IS

PA

RI

TI

ES

CHCS is driving

efforts in Medicaid

and commercial

markets to identify

and eliminate gaps

in health quality

experienced by

racially and

ethnically diverse

populations.

CHCS PROGRAMS

• Integrated Care Program: Developing innovativeapproaches to integrate and finance care for consumerswho are dually eligible for Medicaid and Medicare.

• Managed Care for People with Disabilities:Designing new Medicaid managed care approaches toaddress the unique needs of adults with disabilities andchronic health conditions.

CHCS is uncovering new ways to

integrate services for Americans

with complex, costly health

and long-term care needs.

MORE CARE IS NOT NECESSARILY BETTER CARE.

FRAGMENTED, OFTEN DUPLICATIVE, CARE IS TOO

OFTEN THE NORM FOR PEOPLE WITH MULTIPLE

CHRONIC CONDITIONS AND DISABILITIES. THIS IS

PARTICULARLY TRUE FOR THE SEVEN MILLION

AMERICANS WHO ARE COVERED BY BOTH MEDICAID

AND MEDICARE, AND ACCOUNT FOR 40 PERCENT

OF MEDICAID SPENDING. TRULY INTEGRATED CARE

— CONNECTING THE DELIVERY AND FINANCING OF

MEDICAL, BEHAVIORAL, AND LONG-TERM CARE SERVICES — CAN SIGNIFICANTLY

IMPROVE THE QUALITY AND COST-EFFECTIVENESS OF PUBLICLY FINANCED PROGRAMS.

I N T E G R A T E C A R E

(as of June 2006)

JESÚS M. AMADEO, TREASURERSenior Vice President, MDRC

JO IVEY BOUFFORD, MD, CHAIRProfessor of Public Service, Health Policy, andManagement,The Robert F. Wagner GraduateSchool of Public Service, New York University

ROBERT CURVIN, PhDRetired from the Greentree and FordFoundations respectively

ARNOLD EPSTEIN, MDJohn H. Foster Professor and Chairman of theDepartment of Health Policy and Management,Harvard University School of Public Health

CLIFFORD A. GOLDMAN, PhDPartner, Goldman, Beale Associates, FinancialAdvisors

CHRISTINA H. PAXSON, PhD, SECRETARYProfessor of Economics and Public Affairs,Woodrow Wilson School of Public andInternational Affairs, Princeton University

STEPHEN A. SOMERS, PhDPresident, Center for Health Care Strategies

RICHARD L.WRIGHT, ESQIndependent Policy Consultant

CHCS Board of Trustees

In Appreciation CHCS is grateful for support from the nation’s leading healthcare philanthropies, as well as federal agencies and corporationscommitted to innovative solutions to the health care challengesfacing vulnerable Americans:

• Agency for Healthcare Research and Quality• The Annie E. Casey Foundation• The California HealthCare Foundation• The Commonwealth Fund• The David and Lucille Packard Foundation• Kaiser Permanente Community Benefit• Robert Wood Johnson Foundation• Schaller Anderson, Incorporated• Evercare

Center for Health Care Strategies, Inc.

CHCS

CH

CS

Financial H

ighlights

200 American Metro Blvd, Ste. 119Hamilton, NJ 08619(609) 528-8400(609) 586-3679 fax

Promoting the delivery of high quality health care services to low-income populations and people

with chronic illnesses and disabilities.

W W W. C H C S . O R G

Combined Statements of Financial Position

2005 2004 Cash and Cash Equivalents $2,961,536 $3,204,564Grants Receivable 18,676,977 18,246,268Equipment and Other Assets 128,143 141,785

Total Assets $21,766,656 $21,592,617

Liabilities 394,472 425,646Net Assets 21,372,184 21,166,971

Total Liabilities and Net Assets $21,766,656 $21,592,617

Combined Statements of Activities2005 2004

Total Revenues 6,342,119 4,290,101Total Expenses 6,136,906 7,154,082

Change in Net Assets 205,213 (2,863,981)Net Assets, Beginning of Year 21,166,971 24,030,952Net Assets, End of Year $21,372,184 $21,166,971

As of June 30, 2005 and June 30, 2004.The above financial information is derived from audited statements by Amper, Politziner & Mattia.