Among the very large cuts in the governor’s budget proposal is a small cut to a shovel-ready program, almost three years in development, to coordinate care for Connecticut’s most fragile and costly residents.

The program has great, long-term potential to improve the quality of care for people, reward providers for improving health, and control costs for the state. The idea is a pilot program to build health neighborhoods, networks of providers who would become responsible to improve health and experience of care while controlling costs, for people eligible for both Medicare and Medicaid (MMEs).

The governor’s budget acknowledges that “the proposal could generate long-term savings by promoting practice transformation, facilitating person-centered team-based care, and creating a payment structure that aligns financial incentives to promote value”, however, “funding is removed given the state’s current fiscal situation.”

But it is precisely because of the state’s fiscal situation that this program is so badly needed.

Connecticut’s MMEs are primarily seniors over age 65 and people with serious disabilities. The majority of MMEs have at least one chronic health condition, many have three or more. Thirty eight percent of MMEs in Connecticut have a serious mental illness. Connecticut’s MMEs represent less than 10 percent of all Medicaid members in our state, but they account for 38 percent of the spending. Connecticut’s MME per person costs are 55 percent higher than the national average.

Unfortunately, we aren’t getting our money’s worth from all that spending. In 2010, three in ten Connecticut MMEs discharged from a hospital were readmitted within 30 days; almost 10 percent were readmitted within seven days. MMEs report that they have trouble finding doctors and face significant financial barriers to the care they need to stay healthy.

Health neighborhoods are designed to fill the gaps in care facing Connecticut’s MMEs. The concept builds on the very successful care management model that has worked so well for the HUSKY population. In the two years since Connecticut shifted to this model, the quality of care has improved to rival private coverage in many areas, the number of participating providers is up 32 percent, and per person costs are stable, saving the state $410 million so far. The health neighborhood program will coordinate coverage and spending between the federal Medicare and state Medicaid programs eliminating cost shifting and counter-productive incentives.

Providers in health neighborhoods will still be paid for the care they provide, but will also share in the savings they generate by keeping people healthy. To receive those payments, they must reach robust quality standards and cannot deny medically necessary care.

It has taken three years of hard work by a diverse group of doctors, hospitals, home health agencies, behavioral health providers, state agencies, and consumer groups to craft a model that is feasible, will control costs, and protect consumers. Using federal funds and extensive data sets, that diverse planning group we serve on has worked toward common goals to build momentum to make this innovative model work for our state and its most fragile residents. That hard work serves as a model for constructive health reform in our state.

Policymakers are constantly looking for ways to improve quality and get more value for our spending. It would be a terrible waste to terminate this health neighborhood pilot just as it is ready to begin delivering on that promise of improved care coordination, better outcomes and reduced costs.

Ellen Andrews is executive director of the Connecticut Health Policy Project, Sheila Amdur is the co-chair of the Medical Assistance Program Oversight Council Complex Care Committee and Matthew Katz, is CEO of the Connecticut State Medical Society

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