Date of Final Oral Examination (Defense)

8-2011

Type of Culminating Activity

Thesis

Degree Title

Master of Health Science, Health Policy

Department

Community and Environmental Health

Major Advisor

Sarah E. Toevs, RDH, Ph.D.

Abstract

Background: It is well established that access to home and community-based services (HCBS) as an alternative to institutional long-term care (LTC) leads to better health outcomes. Because Medicaid is the primary payer for formal LTC services, changes in Medicaid policies favoring access to HCBS play a crucial role in “rebalancing” the nation's LTC delivery system. Prior research indicates that expanding Medicaid HCBS may result in lower per patient expenditures. A key part of Medicaid's rebalancing effort is the recently expanded Money Follows the Person (MFP) program, whereby the federal government offers enhanced match funds to assist state Medicaid programs in transitioning institutionalized LTC patients to the community.

Problem: Despite the potential benefits of increasing access to Medicaid HCBS, in this time of budget cuts, policymakers may be resistant to expanding such services.

Method/Data: A model to project the impact of MFP on Idaho’s Medicaid expenditures over 10 years was designed using established cost projection methodologies, Medicaid Statistical Information System (MSIS) data, and pertinent Medicaid policies. The model was then applied to Idaho’s MFP program from state fiscal year (SFY) 2011 to 2020 to compare projected Medicaid expenditures in the absence of MFP with such projected expenditures under low and high model projections of how effective the MFP program will be in transitioning institutionalized LTC patients to the community.

Results: Baseline projections indicate that Idaho Medicaid will spend approximately $6.8 billion on LTC between SFY 2011 and SFY 2020. High and low model projections indicate that, after accounting for estimated increased acute care expenditures, Idaho Medicaid will be $16.5-32.5 million more cost effective over ten years with MFP. Projected efficiencies may be partially offset by the “moral hazard” of expanding HCBS.

Discussion: Implementing the MFP Program in Idaho is projected to reduce overall Idaho Medicaid expenditures in coming years. Such reductions, however, will be greater if Medicaid acute care expenditures for Medicaid HCBS recipients can be reduced. Accordingly, coordination of cost-effective LTC and acute care in the community is crucial to reducing Medicaid LTC expenditures in coming years.

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