As state leaders and stakeholders look to contain spending growth in New York’s Medicaid program, one proven way to a more cost-effective care system with better outcomes, is through supportive housing services for high-cost Medicaid recipients.
Housing and health are deeply interconnected. Without a safe place to live and enough food to eat, it is extremely challenging to tend to the most routine of healthcare needs, let alone chronic behavioral health and medical conditions. For instance, people experiencing chronic homelessness have higher rates of chronic medical and behavioral conditions, such as diabetes, hypertension, HIV/AIDS, severe mental illness and substance use.
Jason Lippman
When care is needed or a crisis escalates, individuals who lack stable, permanent housing often seek treatment in costly inpatient and emergency-based settings. In fact, only a small percentage of Medicaid recipients drive up costs from high use of hospital and emergency room services. According to data from the U.S. Department of Health and Human Services, the top 5% of Medicaid recipients account for more than half of all Medicaid spending.
Community-based providers that offer supportive housing —a targeted and cost-effective intervention that offers long-term rental assistance and supportive services—empower individuals and families who experience chronic homelessness to live in the community, in their own apartments and take care of their medical and behavioral health needs. Supportive housing, especially when coupled with Health Home coordinated care, is a key component to improving health and reducing expenditures in the healthcare system, including significant savings in the Medicaid program.
Enter MRT II
New York State is working to fill a significant hole in its Medicaid budget, which is constrained by a state-imposed global cap on spending. In response, Governor Andrew M. Cuomo has reconvened the state’s Medicaid Redesign Team (MRT) to find $2.5B in savings in the Medicaid program. Known as MRT II, the team is tasked with finding solutions to contain spending growth. They are charged with accelerating the strategies that have proved to be successful from the first MRT, which was established in 2011 and shall now be known as MRT I. Members of MRT II are tasked with quickly putting together a plan with recommendations that, among others components, address models of healthcare delivery to improve care management for beneficiaries with complex health conditions, and strengthen the sustainability of safety net providers serving vulnerable populations, including through regulatory reform.
MRT II meetings have commenced to establish a process and deliberate proposed recommendations. In addition, the MRT quickly assembled public comment forums which drew the ire of several interested parties already concerned about the transparency and inclusivity of the MRT II’s procedures. Although never seen as perfect at the time, the structure of the MRT I, in comparison to MRT II, was more broadly shaped by stakeholder engagement and greater consumer and community representation. With more time and a more diversified set of objectives, MRT I sought input from 10 work groups focused on issues that addressed health disparities in the system and opportunities for return on investment (ROI) through interventions such as affordable housing initiatives.
Under MRT I, the NYS Department of Health (DOH) heard from providers and advocates in the community, who organized tours of supportive housing developments and formal meetings with state officials, to demonstrate how permanent housing improves health, reduces avoidable hospital use and decreases healthcare costs. In response, an MRT Affordable Housing Workgroup was established within the larger MRT delegation. In doing so, DOH recognized housing as healthcare and a key social determinant of health (SDOH).
In close collaboration with stakeholders and colleagues, I felt fortunate to serve on the MRT’s Affordable Housing Workgroup. Together, we assessed the state’s entire supportive housing portfolio, identified barriers to implementing supportive housing and recommended solutions to overcome them. We identified Medicaid savings and service improvements from the investment of new resources or through more efficient use existing means. Included in our final recommendations was the advancement of an MRT Supportive Housing Program, paid for with state Medicaid savings, for high-cost Medicaid recipients. The program included funding for capital, operating expenses, rent subsidies and services.
MRT I realized that supportive housing is a key component to reducing physical and behavioral healthcare related expenses, including substantial savings in the Medicaid system. In fact, several studies have indicated how supportive housing investments can be offset from savings achieved by reduced use of the healthcare system and even generate a net positive return on investment. Additionally, combining supportive housing interventions with medical services and Health Home care coordination programs can produce a continuous flow of improved outcomes and cost savings for reinvestment back into the healthcare system with exponential rates of return.
During budget negotiations and after the completion of the MRT II process, the state must not miss this moment to innovative and redesign for a Medicaid system that meets consumer social determinant of health needs such as housing, living wage employment, education, food and transportation.
Housing in Integrated Care Networks
By scaling up a supportive housing infrastructure with coordinated care and outreach, we can leverage the power of community-based organizations (CBOs) to reach the hardest to serve and costliest users of Medicaid, treat complex health conditions and bend the cost curve downward. Moreover, with growing Medicaid enrollment, along with the aging of high-need subpopulations, and increasing rates of homelessness, integrating care and focusing on social determinants of health can have lasting effects on whole health outcomes and Medicaid spending.
By building an integrated care network that leverages the local and regional expertise of CBO’s that are successful in addressing the needs of people living with chronic care conditions, we can continually reach people who are unengaged in care and/or experiencing homelessness, and connect high-need consumers to housing and quality behavioral health and medical care in the community. Furthermore, by taking a total cost of care approach that incentivizes integration, value-based payment and data-sharing arrangements, we can foster a more cohesive system of care and reduce the presence of chronic homelessness and behavioral health comorbidities as significant drivers of Medicaid expenditures.
By convening the right partners, we can create a future vision where provider associations, health plans and Independent Practice Associations (IPAs), etc., can work together under a total cost of care model, pay for innovative services to solve social determinant of health issues, and establish data needed to demonstrate their full value.
By replicating best practices learned from the Delivery System Reform Incentive Payment (DSRIP) program and other Medicaid reforms that were able to utilize more flexible arrangements around housing, workforce, crisis stabilization, peer services, care coordination, integration, etc., we can enable more consumers to tend to their existing health conditions in the community instead of through hospital-based and emergency room services. New York should pursue the adoption of successful DSRIP pilot programs more broadly and improve upon them, particularly from examples where PPSs sought more robust ways to collaborate with community-based providers to solve SDOH needs. According to state data, the DSRIP waiver program was successful at reducing avoidable hospitalizations by 21% and readmission rates by 17%.
Advancing SDOH Innovation
By breaking down the administrative and regulatory barriers that prevent community-based entry into Medicaid innovation programs we can strategically advance SDOH interventions. Many nonprofit providers continue to lack adequate infrastructure to sufficiently work with multiple Medicaid managed care organizations (MCOs), which also affects consumer access and continuity of care. Also, MCOs are not incentivized to pay for SDOH services or contract with behavioral health IPAs or other value-based entities. Behavioral health providers and consumers are still unable to take full advantage of specialized services intended for high-need recipients, like Home and Community Based Services (HCBS) offered in behavioral Health and Recovery Plans (HARPs). Navigating the eligibility and access barriers set up in the HCBS process is especially complex and troublesome for supportive housing providers and the consumers they serve.
Furthermore, the state should take measures to incentivize collaborative approaches to advancing social determinant interventions, like housing, where providers and payers alike can align, innovate and better serve better serve people caught in the intersection of chronic health conditions and homelessness. Housing is a key SDOH solution that should not be overlooked in MRT II.
