OR: Legislators Look at Cost-Containment Ideas for “High Utilizers”

This legislative session is the first that Oregon lawmakers haven’t spent a lot of time on the state’s coordinated care organizations (CCOs) since the Oregon Health Plan was overhauled and the organizations were created in 2011.

Unlike Cover Oregon, the other large reform effort undertaken that year, Oregon’s CCOs have gotten off to a solid start and have shown steady progress in containing Medicaid spending and efficiently coordinating physical, mental and dental care.

But the House and Senate healthcare committees recently held sessions on the potential to reap even more savings by focusing on the costliest and least healthy patients.

Mary Kay Owens, a healthcare consultant and executive director of the Institute for Healthcare Innovation Strategies in Tallahassee, Fla., presented an analysis of the costs of patients known as “high utilizers” who often suffer from co-occurring physical and mental conditions and lack of access to primary care.

Owens said the Institute developed state-specific algorithms based on indicators of uncoordinated care, such as avoidable emergency room visits and inconsistent use of prescription medication, and analyzed claims data from nine million patients in six states.

The algorithms were then used to identify high-utilizing patients and analyze associated costs, based on fee-for-service claims data.  A similar analysis of managed care data revealed similar results, she said.

Owens’ research found that high utilizers accounted for approximately 10 percent of patients but nearly 35 percent of health care costs, and that approximately 35 percent of the high utilizers’ care was avoidable.

Nationally, such patients cost five times more than an average patient, and their total cost is approximately $240 billion each year (including $133.5 billion paid by Medicaid programs).

In Oregon, CCOs have recognized that providing efficient, coordinated care to high-utilizing patients is crucial to their success.  Many of the CCOs have created pilot programs and tailored programs targeting those patients.

One such pilot program conducted in central Oregon in 2011 focused on 144 patients who used the emergency room 10 or more times a year and worked with those patients to increase their use of primary care homes and coordinated care.  As a result, emergency room use decreased by 49 percent and generated roughly $750,000 in savings.

Owens said such programs are key to effectively treating high utilizers and making the coordinated care model successful.

Based on the findings, she told legislators that CCOs should create a separate risk pool and performance standards for high-utilizing patients.  CCOs would then know exactly who those patients are and would more carefully track savings specifically linked to their health outcomes.

“If you really want to know if your interventional activities are impacting the very patients you think have the most return on investment, you would want to pull those patients out and track and monitor them separately,” Owens said.

She also said that CCOs should not be held to a statewide standard. “One might have a small number of uncoordinated patients, and another might have a large number,” she explained.

Currently, CCOs don’t necessarily identify and stratify their patients in such a way, and they are held to statewide performance standards.

Sen. Laurie Monnes Anderson, D-Gresham, noted the value of the Institute’s report “as we go forward with healthcare reform.”