State health care contracting reforms save taxpayers $650 million

Gov. Mark Dayton and Department of Human Services (DHS) Commissioner Lucinda Jesson announced July 28 that Minnesota’s first statewide competitive bidding process for managed care contracts, and other contract adjustments, saved taxpayers nearly $650 million. The savings come from both contracting reform (nearly $450 million) and a contract settle-up provision allowing DHS to recoup unspent health insurance dollars ($200 million). These public programs provide more than 800,000 Minnesotans high-quality health coverage. With today’s savings, the Dayton Administration has implemented cost saving reforms that have resulted in more than $1.65 billion in savings for taxpayers since 2011.

 

More information is in a news release about the managed care contracts on the Governor's Office website.

Mental health center adds primary care to become health care home

Minnesota has 382 medical clinics that are certified as health care homes, but Zumbro Valley Health Center is the state’s first community mental health center to become a health care home.

MDH certified Zumbro Valley Health Center as a health care home in May, after it completed required certification steps such as adding primary care services. The organization is the first mental health center in Minnesota to achieve this designation.

“It’s exciting to see a mental health center deciding to become a health care home,” said Minnesota Health Commissioner Dr. Ed Ehlinger. “A key opportunity for improving health care in Minnesota is to break down some of the divisions between physical and mental health so we can effectively coordinate care and treat the whole person.”

MDH and DHS are jointly responsible for the development and implementation of Minnesota’s Health Care Homes initiative.

Minnesota’s health care home model offers an innovative, team-based approach to primary care in which providers, families, patients, and other team members work in partnership to improve the health and quality of life for individuals, especially those with chronic and complex conditions. Health care homes put patients and families at the center of their care, develop proactive approaches through care plans and offer more continuity of care through increased care coordination between providers and community resources.

“This is a significant step forward in reducing health disparities for people with mental illness,” said Department of Human Services Commissioner Lucinda Jesson. “Care should be accessible and equitable for all Minnesotans and we congratulate Zumbro Valley Health Center for leading the way.”

Findings from a number of national studies indicate people with severe mental illness die as much as 25 years earlier than the public. The leading causes of these premature deaths are physical diseases such as heart disease, lung disease, diabetes and cancer. One contributing factor is that many with mental illness do not routinely see their primary care physicians for physical health screenings.

As a certified health care home, Zumbro Valley Health Center will provide integrated care services to individuals diagnosed with one or more major chronic conditions. This includes care coordination services to enhance each individual's well-being by organizing timely access to resources and necessary services to ensure continuity of care.

"Since launching our primary care clinic, we have worked with nearly 200 people with co-morbid conditions," said Zumbro Valley Health Center Chief Executive Officer Dave Cook. "A number of these individuals have significant medical conditions such as heart disease, diabetes or obesity along with their mental illness or addiction diagnoses." Cook added there is no additional cost for this care and staff have begun speaking with clients who are eligible for health care home services.
Health Care Homes were developed as part of Minnesota's health reform legislation in May 2008. In 2014, the University of Minnesota released research that shows the clinics’ collaborative, patient-centered model of health care delivery reduced costs and outperformed other clinics on quality measures. 

Zumbro Valley Health Center delivers systematic coordination of health care to people with mental health, medical and addiction disorders. Zumbro Valley Health Center is a private, non-profit organization serving Southeast Minnesota.

Novel MDH study yields first statewide estimate of potentially preventable health care events

For the first time, the Minnesota Department of Health (MDH) has analyzed the state’s emergency department visits, hospital admissions and hospital readmissions and found that over the course of a year nearly 1.3 million of those patient visits costing nearly $2 billion were potentially preventable.
MDH used 2012 claims data from the Minnesota All Payer Claims Database (MN APCD) and data analytics developed by Minnesota’s 3M Company to estimate the volume of potentially preventable patient visits to hospitals and emergency departments.  Minnesota is the first state in the nation to successfully conduct such an analysis using APCD data and set a baseline estimate for potentially preventable hospital visits.

“Minnesota has one of the most efficient and cost-effective health care systems in the nation but this study shows we still have room for improvement,” said Minnesota Commissioner of Health Dr. Ed Ehlinger. “Equipped with these findings, we will work with providers and community leaders to ensure patients more consistently receive the right care, in the right place at the right time.”

In this context, potentially preventable health care events are defined as hospital and emergency department visits that patients possibly could have avoided under the right circumstances such as timely access to primary care, improved medication management, greater health and health system literacy, and better coordination of care among clinicians, social service providers, patients and families.  Examples include a visit to an emergency department for a urinary tract infection that could have been treated in primary care or a readmission to a hospital because of poor follow up care after a discharge.
These 2012 patient visits consumed about $1.9 billion in health care spending by employers, health plans and individuals. This accounted for about 4.8 percent of total health care spending in the state that year. This volume of spending does not, however, represent real potential savings because not all identified events were actually clinically preventable and preventing them may require new investments elsewhere in the system.

“Even for those events that may be actually preventable, the best opportunity for prevention may exist farther upstream than the points of care included in this study,” said MDH’s State Health Economist Stefan Gildemeister. “Though we do see a substantial opportunity for cost savings in the health care system, the best prevention for many of these events may lie outside of the health care delivery system altogether.”

A large share of 2012 emergency department visits – 1.2 million, or about two out of three visits – was potentially preventable. These visits cost $1.3 billion. Many patients were seen more than once for a condition that was potentially preventable.  For example, as many as 50,000 Minnesotans had four or more potentially preventable ED visits in a calendar year. Of those potentially preventable ED visits, infections of the upper respiratory tract (9 percent), abdominal pain (7 percent), and musculoskeletal system and connective tissue diagnoses such as back pain (7 percent) were the most prevalent diagnoses. Medicaid members made up a disproportionately high percentage of overall emergency department visits.  In 2012, Medicaid patients made up 14 percent of the population, but accounted for 40 percent of ED visits in the state.

Nearly 50,000 events were potentially preventable hospital admissions totaling $373 million. The top three conditions for potentially preventable admissions included: pneumonia, excluding pneumonia related to bronchiolitis and respiratory syncytial virus (13 percent), heart failure (12.1 percent), and COPD (8.1 percent).

About 22,000 hospital readmissions costing $237 million were found to be potentially preventable. For readmissions, the three most frequent conditions account for approximately 15.2 percent of all readmissions and include heart failure (6.6 percent), blood infection (septicemia) and disseminated infection (5.1 percent), and major depressive disorder and other unspecified psychoses (3.5 percent).

“Minnesota’s providers, including Hennepin Health, are very focused on improving outcomes and reducing high-cost care that is not good for patients,” said Ross Owen, director of Hennepin Health. “This work requires approaches that look not just at coordinating medical care but at addressing social factors and preventing these events from happening in the first place. This MDH report is an important statewide step toward understanding that opportunity.”

The report includes a number of strategies for reducing potentially preventable events that Minnesota providers, State agencies, and other stakeholders are already pursing to reduce potentially preventable events.

• Ensuring all patients have access to timely, high-quality preventive care in outpatient settings, and a usual source of care or medical home
• Ensuring consistent and strong engagement by patients and families, with a focus on the availability of information or guidance about preventive care and treatment that is accessible to patients with varying levels of health literacy and in multiple languages
• Improving coordination of care across settings of care, in particular between long-term care settings and hospitals
• Making use of emerging providers, such as community paramedics or community health workers, to provide care coordination and connect vulnerable patients to social supports that can help them avoid hospitalizations or ED visits
• Ensuring that secure electronic exchange of clinical information occurs effectively and in real time across settings and provider systems
• As recommended by the RARE campaign, improving comprehensive discharge planning, medication management and transition care support/transition communications

The study was conducted using data from the Minnesota All Payer Claims Database (MN APCD), which includes data from both public and private insurance payers. Minnesota is one of a small number of states to collect health insurance data on such a comprehensive scale, and the first to use its APCD to conduct a comprehensive analysis of these events. The study also employed patient classification methodologies and analytic services from 3M Health Information Systems, a business of 3M Company.

For more information, see Health Economics Program.