Md. to reduce Medicaid spending


The state health department announced a plan yesterday to reduce spending on the relatively small number of people who account for more than half of its yearly Medicaid budget.

Health Secretary Nelson J. Sabatini has enlisted the technical support of the University of Maryland at Baltimore County, which has assembled a staff to identify the costliest patients, find them appropriate health care and monitor the expense and quality of their care.

The patients are generally those suffering from chronic maladies such as diabetes, cancer, AIDS and head injuries. Also included are premature babies connected to expensive equipment in neonatal intensive care units.

All told, the 27,000 people who make up this group constitute just 6 percent of the state's total Medicaid population. Despite their small numbers, they are projected to account for 60 percent of the $2 billion Maryland will spend this year on Medicaid -- the government's health coverage for the poor.

Case managers will organize the type of care each patient will receive -- whether it's rehabilitation, hospitalization, home care or outpatient services. The goal, said Mr. Sabatini, is to keep patients in hospitals as little as possible while making sure they get the care they need.

Mr. Sabatini said he wants to end a pattern in which seriously ill patients show up in emergency rooms or travel from doctor to doctor without a coherent plan for their care.

Yesterday, the state asked the federal government for permission to depart from federal rules that, among other things, tend to favor hospitals over outpatient care. If the waiver is granted -- a reply is expected within 90 days -- the program can begin in earnest.

UMBC has put together a full-time staff of 20 computer specialists, researchers and policy analysts to manage the program. The state will pay the university $26 million over five years, but expects to realize a net savings of about $114 million over that period.

The UMBC Center for Health Program Development and Management is one of only a few efforts across the county in which academia has stepped in to manage a state's health care program, according to university officials.

UMBC plans to identify high-cost patients by tracking Medicaid billings, interviewing hospitalized patients at bedside and encouraging referrals from doctors. Once identified, patients will assigned to "integrated care groups" -- networks of doctors, nurses, hospitals, home health organizations and medical equipment companies.

"The key is to catch people from a prevention standpoint before they cost money," said Dr. Louis B. Hays, the center's operations director.

Dr. Joseph Mead, vice president for medical affairs at the Mercy Medical Center, said many hospitals are already putting together such networks to establish niches in the rapidly evolving marketplace.

"It will probably mean less admissions and less days [in the hospital], but it will be for the overall good of the health care system to which we belong," Dr. Mead said.

Mercy is planning a new community health care center in downtown Baltimore, which should fit squarely into the state's increasing emphasis on outpatient care. "We will also have to make alliances with medical equipment companies and probably long-term care companies," he said.

Mr. Sabatini said the networks will be awarded a fixed amount of money for a patient's total care. Generally, the amount will be about 10 percent less than the state now spends on such patients, he said.

Health care providers will have an incentive to avoid unnecessary procedures: They can keep whatever money is left after a patient's needs are met. But the state can terminate contracts if providers do a poor job taking care of their patients.

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