5 cost reduction strategies for your Medicaid plan

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A doctor writing down notes as she talks to an older male patient.To say that costs for health plans are rising is an unfortunate understatement. Even when members do not have cost sharing, they are concerned they will receive bills, so they avoid getting care. Luckily, health plans can take action to develop strategies that support members with their physical and behavioral health needs while also reducing costs. Read on to learn about cost reduction strategies your Medicaid plan can implement to reduce avoidable expenses without sacrificing the quality of care.

Why do plans need to deploy new cost-reduction strategies?

Older and low-income populations have disproportionate social determinants of health (SDOH) needs, which create barriers to maintaining optimal health. Without access to preventive and routine follow-up care for known conditions, these populations may turn to emergency services as a last resort, resulting in $32 billion worth of unwarranted ER visits a year

For perspective, research by UnitedHealth Group shows that there are 27 million emergency department visits per year by patients with private insurance, with a whopping two-thirds of visits deemed "avoidable" or "not an actual emergency” at a cost of over $2,000 each. 

Plans need to do their part to ensure members receive care for physical and mental concerns to prevent lost productivity, low motivation, lack of satisfaction — and even real or perceived health crises. 

Value over profit

The Harvard Business Review hits the nail on the head, emphasizing the importance of delivering the best outcomes at the lowest cost. Plans must strike the right balance of facilitating desired outcomes in a cost-effective way, thus creating high-value care.

What can Medicaid plans do to reduce costs?

By implementing several cost reduction strategies, your plan can improve access to and timeliness of care using a high-value care approach. 

Coordinate focused care for high-risk populations.

Various groups, such as the elderly and those who live in poverty, have higher risks of medical problems and therefore increased costs. They’re also likely to have more significant SDOH needs, ranging from food insecurity to a lack of shelter or safety. Dual Eligible Special Needs Plans (D-SNPs) can better help their members with physical and behavioral health conditions. 

One way to start is by intervening to help those who suffer from severe social isolation and loneliness. Some tactics include: 

  • Enrolling members in programs to treat loneliness.
  • Increasing member engagement.

When these members feel more engaged in life and their health, it's a big step in the right direction. This makes them more likely to participate in specialized programs for their well-being, from smoking cessation to drug or alcohol support.

Learn how Pyx Health can help your Dual Eligible Special Needs Plan members  overcome loneliness and improve health outcomes.

Highlight preventive care options.

Preventive care helps members get in front of potential problems, catching them early and minimizing long-term impacts. Plans should emphasize the benefits of this type of care and reassure the member that they will not have any cost-sharing responsibilities. To that end, members should take advantage of:

  • Heart health testing (e.g., blood pressure and cholesterol checks)
  • Cancer screenings (e.g., mammograms and colonoscopies)
  • Well-baby visits, well-child visits and adult preventive visits
  • Routine vaccinations 
  • Prenatal care

One thing you can do to improve participation is to provide incentives for engaging in preventive behavior, therefore motivating members to use preventive services. This could include benefits such as reduced premiums or even points that can be redeemed for health-related items. 

Create programs for lifestyle modifications.

Many health care providers are part of the Centers for Disease Control (CDC) 6|18 Initiative — a program that focuses on six high-burden health conditions and 18 evidence-based interventions and preventive services to improve health and control costs. 

Plans can look to the Initiative to help their members, namely concerning lifestyle modifications in six areas:

  1. Tobacco cessation: Increase access to evidence-based tobacco cessation treatments.
  2. High blood pressure: Provide access to self-measured blood pressure (SMBP) monitoring at home.
  3. Inappropriate antibiotic use: Implement Antibiotic Stewardship Programs (ASPs) to ensure members in inpatient settings receive the correct antibiotic at the right time and for an appropriate duration.
  4. Asthma: Improve access and adherence to asthma medications and devices according to National Asthma Education and Prevention Program (NAEPP) guidelines.
  5. Unintended pregnancies: Remove barriers to contraceptive services (e.g., screening for pregnancy intention; tiered contraception counseling; and insertion, removal, replacement or reinsertion of contraceptive devices).
  6. Diabetes management: Expand access to the National Diabetes Prevention Program (National DPP) to prevent type 2 diabetes.

Reduce overutilization.

The number one purpose of emergency departments (EDs) is to deal with emerging, life-threatening situations. Although the ED is there for non-life-threatening problems, they must operate as if an emergency exists and prioritize those patients. That can mean long waits for patients who do not present with life-threatening conditions. It can also lead to costly tests (e.g., labs, imaging) and prescriptions that may conflict with a patient’s current regimen because the ED does not have all the necessary information. 

Overtreatment and overutilization of EDs result in an extra $158 billion-$226 billion spent on health care in the U.S. each year due to major tests that incur significant costs and unnecessary care that is more expensive than in traditional settings

So what should plans do to reduce overutilization? Start by introducing programs that prevent unnecessary trips to the ED. In doing so, you reduce members’ perceived need for ED treatment and therefore decrease visits.  

Improve medication adherence.

Did you know that only 50% of patients with chronic diseases take their medications as directed? On the flip side, nonadherence creates a cost burden of about $100 billion-$289 billion annually.

To reduce costs, provide enhanced medication support to members. Plans can promote medication adherence by:

  • Monitoring the timeliness of medication refills through the pharmacy benefit manager and offering access to pharmacists to explain medication regimens.
  • Ensuring members understand that generic medications are covered with either no or low-cost sharing.
  • Educating members on the importance of adhering to their medication regimens and consenting to text or phone call reminders from their pharmacy or mail order delivery.

How does Pyx Health help reduce costs?

Pyx Health operates at the intersection of human compassion and technology-aided support. Our platform is free to members, unlocking opportunities to better manage their health by: 

Meeting health needs at the right time.

Pyx Health is devoted to meeting members where they are. With our platform, members have access to tools to support their mental, social and physical health needs, including: 

  • Health resources
  • Interactive activities
  • Evidence-based screenings 
  • Real-time feedback

Whether it’s educational materials or activities to get members through their toughest moments, we believe that timing matters to improve overall outcomes. 

Addressing the ripple effects of loneliness.

Loneliness and social isolation are more prevalent among people of color and the elderly. Loneliness is correlated with depression, obesity and an increased risk of ER visits, but there are ways to help. Pyx Health answers several needs, deploying a platform designed to:

  • Reduce loneliness by providing empathetic companionship.
  • Break down barriers to care by connecting members to appropriate resources.
  • Navigate care and health plan resources.

Providing exceptional health solutions to the most vulnerable members is human at its core, but no one can do it alone. Pyx Health brings everything together with technology and a human touch in the perfect combination of support solutions.

Improve your Medicaid plan with tried-and-true cost-reduction strategies.

Mitigating cost reduction strategies for plans and members is possible. Whether it’s helping members take advantage of preventive care, assisting with lifestyle changes or reducing reliance on EDs, your cost-reduction strategies keep members front and center. 

Are you navigating Dual Eligible Special Needs Plans (D-SNPs)? Costs for members who fit in this category can be even more complicated. Learn how and why costs matter to those who are eligible.

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