The Transformative Impact of the Chronic Care Act

The elderly special needs population now has more options for long-term care outside of traditional health services.

(Photo: Getty Images)

 

On a recent episode of “The Business of Healthcare” on Sirius XM Business Radio Powered by the Wharton School channel 111, we discussed the newly passed Chronic Care Act, part of the Bipartisan Budget Act of 2018. My guests for the show were: Cheryl Phillips, MD (President & CEO of Special Needs Plans Alliance); Catherine McPherson (Purfoods, LLC); Kevin Parks, MD (Medical Director of Care Wisconsin), and John Lovelace (President of University of Pittsburgh Medical Center’s UMPC For You organization). All are experts in serving the needs of the dual eligible special needs population.

Within the chronic care act are provisions in caring for dual eligibles (meaning people who are Medicare and Medicaid eligible) with multiple chronic conditions, such as diabetes and heart failure—also called the special needs population. This population, which totals 11 million people, consumes over $350 billion per year in medical expenses, or $31,800 per person. This equates approximately to 10 percent of the total health care spend in the United States. To put this into perspective, the average yearly per person health care cost in the U.S. is around $10,500, meaning people with special needs are three times costlier than the average American.

The legislation that passed permanently authorizes Medicare Advantage dual eligible special needs plans to care for this population. It also loosens the definition of primary health related benefits and provides for additional supplemental benefits that have a “reasonable expectation of improving or maintaining the health or function of a chronically ill enrollee.” Embedded in these plans are supplemental benefits which are not direct medical expenses, but which affect the health of patients and include: nutrition, transportation, housing, clothing, their neighborhood, and social support mechanisms. These types of expenditures can be described as social determinants of health.

The passage of these provisions opens up the definition of what health and care insurance coverage provides in order to improve the health and lives of patients. Considering care is increasingly being provided outside of traditional sites of service (e.g. home), this legislation is another major step in providing potentially less expensive but high-quality care. This is how people preferred to be cared for—in their home and their community.

The state of Wisconsin provides a great example of alternative options. As part of the 2015 state budget, Wisconsin expanded programs that provide long-term care benefits in a patient’s home or in a community-based residential facility. This effectively promoted and pushed care from nursing homes into the home/community setting. Care Wisconsin, noted above, has developed programs/services around this model by coordinating with caregivers, community resources (e.g. transportation, housing, and nutrition, through companies such as Purfoods), and family members in the care of these individuals.

As these types of plans demonstrate clinical and cost effectiveness, we are likely to see them being introduced in other types of insurance coverage.  These are welcome additions in the effort to solve our very costly health care system.

 

 

 

 

Wharton Magazine - Background

Type to Search

See all results