MILLWEE, Quinn, and Goldfield's article, "Moving Toward Paying for Outcomes in Medicaid," is a well-organized, tightly reasoned, and evidence-based outline for health care policymakers, especially those responsible for Medicaid programs. The authors effectively argue that paying for outcomes can foster measurable improvement in health as well as financial sustainability for Medicaid programs.
The decision to use paying for outcomes (P4O) in the title, rather than common alternatives such "paying for performance," "paying for quality," or "paying for value," was deliberate. These other formulations are less explicit about the critical role of outcomes in performance, quality, and value. As the authors note, most quality and performance measures are based on scores of process metrics. These lack the focus of the 10 outcome measures that the authors advocate, including preventable admissions and readmissions, inpatient complications, as well as infant and child mortality. They highlight examples from other state programs, which have achieved improved health outcomes and cost savings in their Medicaid population.
Millwee et al. provide readers with 5 principles in developing a P4O program, how to prioritize reforms, and even how to structure incentives to motivate the range of behaviors that should be adopted for program success. Given this comprehensive and practical way of showing how the various dimensions of P4O contribute to program design, the article can be a major contributor to helping states more effectively fulfill their responsibility to evaluate Medicaid-managed care. Rather than adopting home-grown, state-specific metrics that typically include myriad process measures (thereby adding to the administrative costs of each plan), "Moving Toward Paying for Outcomes in Medicaid" leverages the experience of its authors by reviewing the outcome measures of successful state Medicaid plans. The paper can be an essential guide for developing more effective and more efficient programs to improve quality and reduce the cost of care in Medicaid programs.
As the authors point out, Medicaid contains heterogeneous subgroups: neonates, pediatric and obstetric patients, the developmentally disabled, those with behavioral disorders, and individuals receiving long-term services and supports. About 11 million Medicaid recipients are duals, that is, individuals covered by Medicare and Medicaid. The authors do not highlight the dual eligibles, although this group is a particularly costly segment of the Medicaid program. While consisting of less than a quarter of the Medicaid population, duals generate over 60% of Medicaid's total spending (Kaiser Family Foundation, n.d.).
Does the financial importance of duals affect the authors' conclusions or recommendations? For the most part, it does not; however, in addressing the multimorbid elderly, there are several complicating factors to consider in developing P4O programs. First, case-mix adjusting may lose some of its ability to predict costs as the number of chronic conditions increases significantly (Riley, 2000). Second, due to the prevalence of cognitive decline, frailty, and disability, the dual population may be particularly sensitive to the social determinants of health, such as food and housing insecurity, lack of social supports, health literacy, and cultural competency among providers. These factors can affect all Medicaid recipients but are more likely to create disappointing outcomes when routine methods of case-mix adjusting are applied. Improving outcomes requires a root-cause analysis and appreciating the role of these factors can help achieve program performance improvement.
"Moving Toward Paying for Outcomes in Medicaid" might have benefited from a summary or conclusion. Even without this addition, the article is a landmark in clarity and pregnant with practical recommendations. It is targeted to help state policymakers become more informed and capable of designing programs that improve the health of Medicaid beneficiaries while incorporating successful approaches from other states to achieve program savings.
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