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Reflections From A Departing Medicaid Director

Nothing lasts forever. That statement applies to the tenure of Medicaid directors just like it applies to every other aspect of our lives. This week, it applies directly to me because this coming Friday will be my last as New York State’s Medicaid director.

As I prepare to depart my position, I can’t help but look back and contemplate all that I have learned and experienced. I have had the honor of having this position in New York for more than seven years. Before arriving in New York, I also had the pleasure to serve as Wisconsin’s Medicaid director. I am not sure what it says about me—between these two consecutive appointments, I am leaving office as the nation’s longest-serving Medicaid director.

During my 11 years as a Medicaid director, I have seen the program grow and transform. I have seen Medicaid face its most serious political challenge with the threat of Affordable Care Act (ACA) repeal, where it not only survived but the fight increased its public appreciation and support to very high levels. Over the past 11 years, I have been a director during the best of economic times as well as the worst. I have led efforts to expand Medicaid—both before and during the ACA—as well as helped lead the program during budget crises, when spending cuts were absolutely essential.

Before I summarize my reflections on 11 great years, I want to highlight a few basic but important facts about Medicaid. Medicaid is the biggest health insurance program in the country in terms of enrollment. The program is jointly funded by states and the federal government and is administered by states under a federal legal and regulatory construct. Medicaid helps more than 68 million Americans access health insurance including 6.6 million people who live in New York. As the largest insurer in the nation, it provides extensive support to providers, hospitals, clinics, and other players in the health care delivery system. It is also the nation’s second-largest health care purchaser with an annual national spend of $565.5 billion (New York’s annual spend is now almost $70 billion). The program has grown substantially in recent years, thanks to the ACA, and provides a wide array of services to the youngest, the oldest, and the sickest in our society. Access to health care through Medicaid is one of the most important services the government provides, and I hope all of our elected officials remember that point in the months and years to come.

I firmly believe being a Medicaid director is one of the best jobs in health care policy. You get to be both a policy maker and administrator. You face some of the biggest problems in US health care, and one way or the other, you must solve them. If you fail, you won’t last very long in the position. The average tenure of a Medicaid director is 19 months.

While the challenges are great, the rewards are many. Your job is to make sure low-income and vulnerable individuals have access to absolutely essential—in many cases life-sustaining—services, and to do it cost-effectively. I can’t think of a more rewarding mission. Directors, of course, never do it alone. They rely on teams of professionals to run these multibillion dollar operations, and one of the key tasks for any director is to build and maintain a strong team.

As I look back over 11 years, I can summarize my major lessons learned into five distinct categories. This categorization is a bit dangerous because one learns a lot more during her/his time as a director then what I can highlight in this blog post, but I can say that these five represent my most important lessons:

Lesson #1: You can bend the Medicaid cost curve without taking benefits away from poor people, and stakeholder engagement holds the key.

This is a lesson learned with experience from two states. For better or worse, I was a director in both Wisconsin and New York during the height of the Great Recession. Recessions put tremendous pressure on Medicaid. Those pressures come from the fact that enrollment grows as the unemployment rate rises and because every state has a balanced budget requirement. Medicaid—the largest or second-largest part of any state’s budget—is required to reduce spending at exactly the same time as its enrollment grows. In the face of the Great Recession, both Wisconsin and New York reduced spending but maintained eligibility. While it wasn’t easy, it was done through creative policy development and meaningful stakeholder engagement, so as to tap the deep knowledge of those who know the program the best.

One of the things I am most proud of from both my days in Wisconsin and New York was that we used a difficult budget environment to help coalesce our stakeholders around a comprehensive reform strategy. True reform is often difficult without an acute crisis. Very difficult budgets require program changes. In both states, we engaged stakeholders and listened to their ideas for how to change the program. In New York’s case we gathered more than 4,000 ideas from stakeholders and members of the public. We then built a multiyear plan to address the budget crisis, with the stakeholders having a major say in the final product. This approach helped clear the political minefield called the state budget process and helped us gain both legislative approval as well as achieve consensus for what needed to be done long term. These policy ideas ranged from state support for supportive housing for complex Medicaid members to carving in all populations and services into managed care over a multiyear period.

Importantly, we didn’t stop stakeholder engagement at the policy making phase. We continued the engagement throughout the implementation and beyond. This helped to ensure we heard first from providers and members about issues, rather than reading about it in the newspaper. I strongly feel meaningful stakeholder engagement is essential to success in any state regardless of its Medicaid/health care challenges.

Lesson #2: Medicaid is a scalable and highly cost-effective vehicle for reducing the uninsured rate.

One area where the US should take no pride is the fact that it trails the rest of the developed world in ensuring that all its citizens have access to affordable health care. Medicaid has proven time and time again that it can be expanded and provide the uninsured with access to cost-effective medical care. Some program critics will say that Medicaid isn’t good insurance. I beg to differ—and national studies back me up. A recent studyindicates that Medicaid members are extremely satisfied with their coverage and care, and 84 percent of Medicaid members felt that all their medical care needs were met in the past six months.

My hope is that eventually all states will take the federal government up on its offer and expand Medicaid. Such a move would help millions of Americans. In addition, I believe that if we ever develop a rational immigration policy in this country we could further expand Medicaid to the millions of undocumented Americans whose only option for care now is the emergency department (ED). Also important to note is that while Medicaid has greatly expanded thanks to the ACA, we have not seen a rise in health care access issues (such as wait times for appointments) as envisioned by some ACA opponents. We should not fear expanding Medicaid and using it as a cost-effective option for ensuring all Americans have access to health care.  

Lesson #3: Medicaid can and should lead the way in health care delivery system reform.

The US health care system is broken. It costs too much, and we don’t get the same results and outcomes as other nations. One major reason is that the delivery system was built on a perverse set of financial incentives. The historical payment approach in health care—fee-for-service—distorted the delivery system by incentivizing expensive institutional services and under-valuing more cost-effective options such as primary care and community-based behavioral health. We also woefully underfund public health programs.

Our health care sector is inefficient and crowds out spending on other important areas. This must change. As the nation’s largest insurance program, Medicaid is uniquely positioned to lead the way to improve our nation’s health care system. By changing Medicaid payment policies to better align with value, and through targeted investments to rebalance the health care system, Medicaid can and should be a progressive force for change. In New York, thanks to Governor Andrew Cuomo’s leadership and an $8 billion investment from the federal government, we are now seeing true delivery system transformation that can and should be replicated across the country.

We have both reduced per person spending by nearly 10 percent and improved patient outcomes (for example, we’ve reduced avoidable ED use by 15 percent in three years). New York is not alone in this effort—with comparable transformations underway in Washington State, Oregon, and Massachusetts. Unfortunately, the current administration in Washington, DC, seems more interested in reducing Medicaid enrollment as opposed to driving delivery system transformation. That said, states can and should look for ways to leverage their state’s largest health care purchaser to drive more value in health care.

Lesson #4: Medicaid programs must look beyond “legacy” health care models and support new care models.

While every state’s Medicaid program is different, one challenge for every state is that innovation in health care delivery simply doesn’t move at the pace it does in other sectors of our economy.

In US health care, we consider “after hours care” provided by primary care providers as an “innovation.” The fact that most primary care offices are closed when people need them the most is a sign of how backward the health care sector is, as compared to, for example, the retail sector. Can you imagine Amazon following the health care model and closing its website at 5 p.m. on Friday? Telling its customers to come back on Monday or call their competitor’s “911 hotline” and pay four times the price for the same service?

As one of the nation’s largest purchasers, Medicaid must lead the way by investing in new care models. Those care models must be cost-effective, accountable, and directed at the root cause of the challenges many Medicaid members face, which are the social determinants of health. Medicaid programs must be willing to look not only at other states but must look internationally. We in New York have established a tremendous partnership with elements within the National Health Service in England, and we have found amazing similarities in our challenges and how we can address them. Both countries are challenged by patients with complex health and social needs, leading both of us to pursue new care models that encourage greater cross-sector collaboration and aggressive efforts to address social determinants of health. Medicaid programs must be willing to leave the comfort zone of the legacy health care system and help incubate the delivery models that will revolutionize the system in the next five to 10 years.

Lesson #5: Medicaid is the most important health insurance program in the United States.

This statement may seem biased coming from a Medicaid director, but I believe the facts prove this. Medicaid is the nation’s largest insurance program. Medicaid is also the program partly or fully responsible for the largest number of high-cost/high-needs patients who are the individuals who drive most health care costs.

Historically, the Medicare program, while smaller in size today, has been the most influential. For example, when Medicare stopped paying for “never events” (serious, preventable, and costly medical errors), other payers took notice and followed suit. In recent years, Medicare has also played an important and influential role in the program’s commitment toward value-based payment (VBP). While Medicare’s influence continues to be significant, the recent growth in Medicaid as well as changes in policy priorities at the Centers for Medicare and Medicaid Services (CMS) have put Medicaid in the lead as a driving force in the health care delivery system.  

A modest retreat by CMS in its commitment to Medicare VBP (Secretary of Health and Human Services Alex Azar’s recent comments could be interpreted to suggest otherwise) and increased focus on Medicaid “reform” (work requirements, mandatory drug testing) has shifted the focus away from Medicare to Medicaid. Finally, moves by states such as New York, Oregon, Washington, and Massachusetts to use Medicaid to drive broader health system transformation shows a growing realization that the only payer positioned to lead major system change is Medicaid.  

Those are my five lessons learned after 11 years as a Medicaid director. I have been so honored to serve in the role and to work with fantastic teams in both states. I highly recommend the job to others. I doubt you will find a more challenging and rewarding role in US health care.


This blog first appeared in Health Affairs Blog

Jason Helgerson