You may not know it but Connecticut’s Medicaid program is improving – a lot. Access to care is up, quality is up, and costs are down – actually down. Medicaid costs per member dropped by 2 percent from fiscal year 2012 to 2013.

What other health coverage program saw an actual drop in spending per person?

And it’s not just the finances that are getting better. Over the last couple of years, the number of providers participating in Connecticut’s Medicaid program grew 32 percent, hospital admissions dropped 3.2 percent and days in the hospital were down 5 percent. Costs of non-urgent visits to emergency rooms, for the sort of problems that should have been treated in a doctor’s office, were down 12 percent. All of this happened in a growing program – enrollment increased by 79,229 people in the last two years.

Even more impressive are the extraordinary challenges facing the program as it achieved this success. Computer systems were beyond antiquated, staffing levels and program updates had been neglected for decades, excessive and random administrative hurdles for providers and consumers were common, resources were wasted, and too many opportunities were missed. Perhaps the worst challenge was a deep sense of fatigue among people, inside and outside state government, who’ve been running into brick walls for decades trying to fix the program.

So, what changed? How did we pull off this miracle?

Bucking the national trend, in January 2012 Connecticut moved away from paying insurance companies fixed, capitated fees per member regardless of whether anyone got care or not and moved to a self-insured model that gave state policymakers more control over the program. We also started building Person-Centered Medical Homes (PCMHs) in Medicaid where providers are paid for better quality and for coordinating care. Providers in PCMHs work in teams to give people the tools they need to keep themselves and their families healthy. PCMHs help people get appointments with specialists, are open after work hours, and follow up to ensure people get the care they need.

Children connected to a Medicaid PCMH are more likely to get well child visits, adults are more likely to get preventive health care, people with diabetes are more likely to get important eye exams, people wait less time for urgent care, and parents report that their providers are more likely to listen carefully and to know important information about their child’s medical history.

Connecticut’s Medicaid program is an important success story. For decades taxpayers were overpaying insurance companies for inferior service with little accountability. But in 2011 Connecticut policymakers looked at the facts, ignored the managed care industry’s hype, recognized that we weren’t getting what we paid for, and built a new program that focuses on value. And it’s working.

Ellen Andrews is the executive director of the Connecticut Health Policy Project

Ellen Andrews, Ph.D., is the executive director of the CT Health Policy Project. Follow her on Twitter@CTHealthNotes.

The views, opinions, positions, or strategies expressed by the author are theirs alone, and do not necessarily reflect the views, opinions, or positions of or any of the author's other employers.