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How you're driving down costs--and improving lives.

Health and human services--and particularly health care--eat up a large portion of state and local budgets. The cost of Medicaid, which largely serves low-income individuals, is shared between states and the federal government and accounts for the biggest portion of those expenses. More than one-quarter of all state expenditures and over 15 percent of state-funded expenditures are Medicaid related--and those costs are rising (see table to the right). This section shows how governments are decreasing costs in their Medicaid and other HHS programs.


Medicaid has traditionally reimbursed providers based only on the services delivered, but that is changing. Increasingly, states are incenting health care providers to meet performance measures. This practice, known as paying for performance, focuses on producing better health outcomes for citizens, or put another way, on quality rather than quantity of services rendered. In fiscal year 2014-2015, 34 states implemented quality improvement initiatives such as adding or enhancing pay-for-performance arrangements to their managed care contracts. (12)

What You're Doing:


New York

In the wake of the recession, New York State's Medicaid program was unsustainable, with significant cost increases as state revenues were declining. A Medicaid Redesign Team helped get costs under control, and now the state is using outcome-based payments to lock in those improvements.

Funded with a $7.3 billion grant from CMS, the Delivery System Reform Incentive Payment Program (DSRIP) provides incentives for hospitals and safety net providers to collaborate and form networks that promote integrated and holistic care. Approximately 90,000 providers--including hospitals, practitioners, clinics and behavioral health organizations--are split Into 25 networks that have committed to reforms that link payments to the health outcomes of network members. By the end of 2019, 80 percent of provider payments will be value based.


Combining outcome-based payments and a shared-savings model for providers creates Incentives for efficient, patient-centered care, says New York State Medicaid Director Jason Helgerson. He uses the example of children suffering from asthma: "If 35 percent of the cost of treating them is the result of preventable complications that cost $100 million per year, and we cut those complications by half, the provider networks share the savings. It's a win-win for patients and providers."

The initial results are encouraging. New York's Medicaid expenditures are no longer the highest in the country, and the state's average cost per beneficiary is declining. (13)

2016   $589 billion 5.2% ANNUAL INCREASE
2017   $627 billion 6.5% ANNUAL INCREASE
2018   $662 billion 5.7% ANNUAL INCREASE

Source: Centers for Medicare and Medicaid Services

Note: Table made from bar graph.



One thing government HHS programs are not lacking is data. The challenge has always been in accessing, sharing and analyzing data to produce better outcomes. Once data is tapped, however, the results can be transformative. A lack of funding for systems investment has largely left HHS behind the curve when it comes to the use of sophisticated analytics, but that is beginning to change. CMS launched the Medicaid Innovation Accelerator Program (IAP) in July 2014 with the goal of improving health and health care for Medicaid beneficiaries by supporting states' efforts to accelerate new payment and service delivery reforms, including the use of analytics. (14)

What You Told Us:

We asked respondents to the CDG/Governing Institute 2016 HHS survey if their agency consistently embraces data in new and innovative ways to improve program outcomes.
SOMEWHAT AGREED               40%
STRONGLY AGREED               18%
DISAGREED                      6%

What You're Doing:



Data analytics has been integral to Colorado's Medicaid reform initiative, the Accountable Care Collaborative, which uses coordinated care efforts to produce better outcomes for beneficiaries, improve population health and reduce costs. The foundation of the initiative is a statewide data and analytics contractor (SDAC) that centralizes and tracks Medicaid eligibility and claims data. An online portal allows primary care providers, regional collaborative organizations and Medicaid officials to access actionable data on utilization and spending to identify areas of high need and improve care management. In fiscal year 2013, the Accountable Care Collaborative saw a 15 percent reduction in hospital admissions and a 25 percent reduction in high-cost imaging, contributing to $44 million in savings. (15)


Los Angeles County

In a pilot conducted from 2012 to 2014, the L.A. County Department of Children and Family Services screened youth to assess their risk of committing a crime and entering the juvenile justice system. Using an actuarial tool and predictive analytics, the department identified children as high risk by assessing them based on factors associated with criminal behaviors. Caseworkers then connected these children with drug treatment, additional schooling, therapy and other services intended to address the problem. Another group of high-risk children being monitored by the department did not receive intervention services.

An evaluation by the National Council on Crime and Delinquency found that after 6 months, the children who received services had no arrests, whereas 9 percent of the control group did. For the county, the pilot is a significant step toward keeping children out of the justice system. (16)



Florida's Department of Economic Opportunity (DEO) used a $1.7 million grant to develop its Fraud Initiative Rules and Rating Engine (FIRRE) to help root out fraudulent unemployment insurance claims. The system can almost instantaneously process unstructured data and identify relationships that trigger early detection of fraud. So far it has helped the state stop 110,000 fraudulent claims and prevent wrongful payouts totaling $460 million.

"Businesses pay taxes to fund Florida's unemployment program," says DEO Executive Director Cissy Proctor. "By limiting the amount of fraudulent benefits paid out, we're able to reduce how much businesses have to pay in taxes." Proctor says FIRRE could be modified to detect fraudulent applications in other benefits programs such as SNAP and TANF. (17)


What You Told Us:

We asked our survey respondents if their agencies had effective ways of monitoring and abating fraud with their current systems.
SOMEWHAT AGREED               48%
STRONGLY AGREED                8%

9.8% The percent the federal government conservatively estimates is the annual improper payment rate for the Medicaid program. (18)


Agencies across the U.S. are taking a new approach to serve some of the nation's most vulnerable populations. Instead of relying on historical data and previous experiences to draw insights, they are turning to factors such as geography, income and behavioral responses to identify health disparities and solutions.

What You're Doing:


While habits such as diet and exercise certainly play into a person's health, there are also a range of social, economic and environmental factors that can impact a person's well-being. Social determinants

of health are the conditions in which individuals are born, grow, live, work and age, such as their physical environment, employment and social networks. Analyzing social determinants of health can help government officials determine when and where to target interventions for the greatest impact.

Used wisely, the combination of data, technology and social factors can also drive a transformation within health and human services from a system based on outputs to one that is flexible, patient-centered and responsive to each individual's needs.


The Harlem Children's Zone (HCZ) represents an ambitious place-based effort to support children from birth through adulthood. The program serves 13,000 children in and around a 97-block area of central Harlem that suffers from high rates of chronic diseases, infant mortality, poverty and unemployment.

It provides a range of family and social services, including training and education for expectant parents, full-day pre-kindergarten, after-school and weekend programs, nutritional education and access to healthy meals for students.

One major problem HCZ identified within its community was asthma. Nationally, approximately 8 percent of children suffer from asthma. HCZ officials were stunned to find that about 30 percent of children in the area they cover suffered from the condition--it was the top cause of children missing school and visiting the emergency room. To solve the problem, HCZ partnered with Harlem Hospital and Columbia University to visit homes and identify asthma triggers, educate families and provide access to preventive medication. "We're not just here to identify how our community is ailing," says HCZ Director of Evaluation Dr. Betina Jean-Louis. "We need to develop solutions."

HCZ tracks metrics across its initiatives. By asking the same questions as the CDC, HCZ leaders were able to match data and determine that their asthma efforts reduced the number of missed school days, emergency room visits and overnight hospital stays. (19)

What You Told Us:



Behavioral science--the study of activities and interactions among humans, including the analysis of relationships through aspects such as biology, geography, law and political science--is becoming increasingly popular as a solution to challenges in HHS. In 2015, President Obama ignited a newfound interest in the science with an executive order encouraging agencies to use behavioral science insights to streamline welfare programs, help citizens find better jobs, improve health care outcomes and increase educational opportunities.

Says APHSA's Wareing Evans: "People are using things like rapid-cycle evaluation and applying behavioral economics and other sciences to understand questions such as: How do you actually best engage with children and families? What works and what doesn't?"



Thirty-nine thousand Oklahoma households receive government assistance for child care, however, only about one-third of families renew their benefits on time. Delayed renewal applications result in interrupted payments to families and redundant work for caseworkers, who must re-interview parents and re-verify income information.

With funding from the U.S. Administration for Children and Families (ACF), the Oklahoma Department of Human Services (DHS) partnered with a social policy research organization to resolve this issue through the use of behavioral science. DHS ran an experiment where providers who cared for children participating in the government subsidy program were sent a list of color-coded participants nearing their renewal deadline. Green, orange and red were used to indicate how far families were from missing their renewal deadline. Providers were instructed to notify their clients about the upcoming deadline and offer assistance in collecting the necessary documents. This intervention resulted in a 3 percent increase of on-time renewals, when compared to a control group that did not receive the intervention. While the bump may seem small, statewide it's equal to 1,000 families per year. (20)




Approximately one-third of families in Indiana receive childcare subsidies. However, despite a statewide ranking system to help families find high-quality care, 35 percent still pick providers who have not received the state's seal of approval. Through an ACF grant, the Indiana Office of Early Childhood and Out-of-School Learning partnered with the same policy research organization Oklahoma used to improve participation in high-quality care through behavioral science.

The 12,600 families on the childcare voucher waiting list were split into two groups--the control group and the treatment group. Parents in the control group received a standard letter and brochure about choosing a quality care provider, which the state had already been distributing. The treatment group received a special mailing and a follow-up phone call. The special mailing identified that the majority of parents use their voucher to pay for childcare providers who participate in the state's review program, and included a map of the highest-rated providers near the family's residence. The result was a 2.1 percentage point increase in the use of high-quality providers. (21)
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Title Annotation:Section Three
Publication:Policy & Practice
Geographic Code:1USA
Date:Oct 1, 2016
Previous Article:How maps make a difference.
Next Article:Why easy access to data visualization & self-service analytics is crucial in HHS.

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