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The Next Step in Leading the Nation—Empowering Smart Use of Healthcare Through Health Homes

In the early ’80s, a revolution in Washington state began with a simple notion—people who need long-term support want to stay at home for as long as possible. State and federal budget writers loved it because giving people long-term support at home is less expensive than providing it elsewhere. Thirty years later, Washington is hailed as the nation’s leader in providing long-term services and supports in AARP’s latest scorecard. Plus, we do it for less—Washington state ranks 35th in Medicaid per-capita costs.

As the Age Wave moves across our state and the rest of the nation and Medicare costs continue to rise, another simple notion has sparked a new revolution that will give people what they want and help to reduce the stress on budget writers. People want to stay as healthy as possible for as long as possible and do not want to go to the emergency department or hospital unless absolutely necessary. Washington now leads the nation with its Health Home Program that helps people stay healthy, get the care they require when they need it, and get support in a way that makes sense to them. Over its first two years, Washington’s Health Home Program saved Medicare $67 million that would have otherwise been paid for unnecessary care.

How did Health Homes generate these savings? The Health Home Program funds care coordination for people. In this particular case, the CMS-funded Health Home managed fee-for-service model demonstration launched in 2013 serves people who are on both Medicaid and Medicare who have the most expensive chronic health problems. Care coordinators help people get the care and medications they need to keep their chronic conditions from getting out of control and avoid more costly healthcare interventions. By reducing hospital and nursing home visits, care coordinators lowered per-capita Medicare costs by six percent. The savings from the first year of the demonstration were over $34 million, resulting in a 6:1 return on the state’s $5 million investment to launch the demonstration.

Based on the success of this demonstration effort in other parts of the state, Health Homes are now coming to King County. As a leader in innovation, Aging and Disability Services hopes to play a key role as a care coordination organization. Our only stumbling block now is convincing policymakers that it is essential to reinvest those savings into the program in order to provide a rate that covers care coordination costs. Reinvesting shared Medicare savings in health home care coordination will ensure that seniors and people with disabilities can improve health and avoid expensive emergency department, hospital, and nursing home stays. It will also help generate ongoing future shared savings rebates to the state general fund.

During the 2017 legislative session, we were successful in convincing the state legislature to reinvest some of the savings back in the program. The challenge now is to maintain this current investment and convince the legislature to reinvest a greater percentage of the savings into the program. Washington could ultimately share in up to half of the gross Medicare savings, which presents a tremendous opportunity to strengthen and support our state’s long-term care system.

You can read more about the Medicare savings results of our state’s Health Home demonstration model in the Report for Washington’s Managed Fee-for-Service (MFFS), produced by the Centers for Medicare and Medicaid Services. While it’s not “light reading,” the report has the type of information that gets the attention of policymakers and legislators—specifically, how our state can provide better care, for reduced costs, and improved health outcomes.

You can find more information about the Washington demonstration by clicking here.

Contributor Cathy Knight directs Aging and Disability Services—the Area Agency on Aging for Seattle-King County. Sources include DSHS Aging & Long-Term Care Administration and Washington Association of Area Agencies on Aging.