November 13, 2018 Blog

North Carolina’s Approach to Creating Opportunities for Health Can Serve as a Model to Other States

One of the core causes of poor health outcomes and high costs of health care in this country are unmet non-medical drivers of health. These primary drivers of health (like access to healthy food, safe housing, and freedom from toxic stress) impact our health long before medical care is needed. In fact, estimates suggest that 80 percent of patient health outcomes are determined by social and environmental factors, rather than clinical care.

United States of Care believes that efforts to better address these factors can improve the quality of health and health care, and lower costs. Across the country, health systems, industry, community-based organizations, and nonprofits have increasingly been trying to tackle this issue. Throughout our listening we have seen that existing efforts are often fragmented from one another, and hard to sustainably fund long enough to yield useful outcomes and evidence.

North Carolina’s Governor and Department of Health and Human Services may have found a way to sustainably and collectively tackle the fundamental drivers of health as part of their Medicaid Transformation Project. So far, North Carolina has taken several bipartisan steps to establish itself as a leader on this issue, including mapping social determinants of health indicators, developing standardized screening for unmet health-related resource needs, and building a platform to help providers, insurers, and community-based organizations to connect people with the community resources they need to be healthy.  Most recently, on October 24th, The Centers for Medicare and Medicaid Services (CMS) approved the state’s first-of-its kind Medicaid waiver request, which will fund the Healthy Opportunities demonstration program to test evidence-based interventions to directly address non-medical drivers of health. What makes this program so groundbreaking is that it is the first time CMS has allowed a state to use Medicaid funds to directly provide services, like deliveries of medically tailored nutritious food or temporary housing, to beneficiaries who need them.

The waiver authorized up to $650 million in expenditure authority to establish and fund the demonstration pilots, which are expected to serve approximately 25,000-50,000 Medicaid patients in 2-4 regions of the state. Beneficiaries will be eligible for inclusion in the voluntary pilots if they meet at least one of a long list of “needs-based criteria” (for example: multiple chronic conditions, substance use disorder or mental health diagnosis, adverse childhood experience) and at least one of four “risk factors” (homelessness/housing insecurity, food insecurity, transportation insecurity, and risk or experience of interpersonal violence). Depending on the patient’s needs, their health plan care manager will work with a designated coordinating entity in the region to provide Enhanced Case Management (ECM) and individually-targeted evidence-based interventions to beneficiaries.

Importantly, plans will receive funding for these services outside of their capitation rates (and thus outside of the medical loss ratio) and will be incented to spend them wisely to improve their enrollees’ health and lower healthcare costs. In early years, plans will receive a financial incentive if they achieve certain metrics of success, and gradually will be subject to financial penalties if they fail to meet defined targets.

The ECM pilots are authorized to run from November 1, 2019 through October 31, 2024, and throughout the demonstration they will be evaluated through rapid cycle assessments, so adjustments can be made based on lessons learned. After the 5-year demonstration concludes, the state will be able to submit a request to CMS to have services that are proven effective to become part of the Medicaid program statewide. The evidence generated by these pilots will also be a valuable resource for other states interested in what interventions are most effective and for which patients.

North Carolina should be commended for its commitment to tackling the primary drivers of health and can serve as a national model for its comprehensive approach. Additionally, if their Healthy Opportunities pilot programs are successful they could serve as a catalyst for other states, and even the federal government, to invest more dollars directly in evidence-based interventions to address the underlying factors that impact health that prove to improve health outcomes and decrease healthcare costs. It is especially encouraging to see the Democratic Governor, Republican state legislature, and Republican Administration work together on an exciting and innovative approach has the potential to both avoid unnecessary spending and improve health – two goals we can all agree on. It demonstrates that with commitment, leaders can put health care over politics, and collaborate on common-sense solutions to improve the health and well-being of the people they serve.

What other states can learn from North Carolina’s example:

  • State government can take the lead on coordinating work to address unmet social need, even without new federal authority. This can include combating fragmentation by creating a shared platform for providers to refer patient to community organizations, which simplifies administration for those organizations and helps in identifying areas where additional resources are needed and strengthening recruitment, training, and promotion of community health workers.
  • States considering a new 1115 waiver can look to North Carolina’s amended application as a model for testing investment in ECM and direct social services through their Medicaid programs.
  • Both state governments and health systems should be watching the rapid cycle assessments of the Healthy Opportunities pilot programs, to see which interventions are proving most effective.
  • Finally, this work demonstrates the importance of collaboration. North Carolina’s Department of Health and Human Services solicited broad stakeholder input during planning, created new public-private partnerships to support innovative projects, and maintained a productive dialogue with state legislators and the federal government to ensure success.