How to Succeed in Managed Medicaid

The Medicaid market is growing rapidly: In 2006, it accounted for 10 percent of health plan revenue; in 2012 this grew to 18 percent, a number that is expected to continue to increase.

Medicaid has always been a difficult market, managed at the state level, heavily (and confusingly) regulated, and designed to serve an exceptionally diverse population. Individuals with Medicaid coverage are starkly different from the commercially covered populations that dominate most health plan books of business. Becoming an effective Medicaid organization requires a laser focus on what makes them different, but also an emotional connection with—and a desire to do well by—what is arguably the highest-need segment in healthcare.

1What makes Medicaid so difficult?

Two big things: The program is administered at the state level, so there’s a lot of variation in who’s eligible, what’s covered, how services are reimbursed—you name it. And then there are the patients. As a group, they are extremely high-need, but they are also extremely diverse—from families in need of temporary assistance to the aged, blind, and disabled, people with traumatic brain injuries, and the developmentally disabled. Off-the-rack coverage will not work well.
2How do you cope with that kind of diversity?

You want to do as much as you can to get down to the level of the individual. Put in place assessment programs so you really know what is going on with your patients. On the one hand that helps ensure you’re delivering the care patients need. On the other it helps ensure that you get what you deserve from risk-adjustment programs. Have a field force that can get to know your members well enough to identify the non-medical issues that contribute so much to Medicaid costs.
3You say health plans need to treat states like valued customers. Don’t they already?

When you talk to insurance executives about their commercial clients, it’s clear they have relationships. They know individuals at client companies, they keep track of personnel changes, they know what the client is looking for. Working with the state is never going to be as relationship-based as some commercial health insurance is, but you still need personal connection—you still need to show that you care.