[NYAPRS Enews] OM: Medicaid Spends $7, 5K Avg Per Person, $19.5K for Person with a Disability

[Harvey Rosenthal]

The Medicaid Spending Mosaic




August 1, 2017  |  Athena Mandros  Open Minds

Developed by OPEN MINDS, 163 York Street, Gettysburg PA 17325, www.openminds.com<http://www.openminds.com/>. All rights reserved. You may not alter, transform, or build upon this work without written permission from OPEN MINDS

Our new analysis of average per person Medicaid spending found that the U.S. spent $7,492 per person for the 68+ million enrollees in 2015.

But our analysis also found there are wide variations in spending by type of consumer and by state. Further, there are wide variations in how fast per person expenditures are growing. The data shows what is often talked about - that Medicaid is far from monolithic. The significant differences in spending by consumer type and state makes planning a market strategy and a value-based reimbursement strategy in the Medicaid sector tricky.

The most important factor in developing a strategy for Medicaid is understanding the variability in spending by type of consumer.

Estimated expenditures per person range from $3,389 per child to $19,478 per adult with disabilities in 2015. Obviously, the higher the spending per consumer, the more opportunity there is to realize savings (see Your Goal Is To Share Savings, You Need To Measure It<https://www.openminds.com/market-intelligence/executive-briefings/goal-share-savings-need-measure/>, Four Keys To Success With MCO Contracting<https://www.openminds.com/market-intelligence/executive-briefings/step-step-guide-contracting-mcos/>, and Taking A Functional Approach To Succeeding With Value-Based Reimbursement<https://www.openminds.com/market-intelligence/executive-briefings/taking-functional-approach-succeeding-value-based-reimbursement/>).

Another important factor in developing a Medicaid strategy is understanding the variability by state. Spending in the highest spending states is twice that of the lowest spending states. Per person expenditures range from a low of $5,267 per person in South Carolina to a high of $12,544 in North Dakota.

Differences in state spending (and even spending at the local level) are indicative of a couple variables that strategies need to take into account. The first is whether the area is rural, suburban, or urban-spending may be higher in rural areas to account for fewer provider organizations.

The second is the number of services available under the Medicaid program-lower spending may mean fewer services are available to enrollees. Finally, at the local level, higher spending may indicate a community with poorer health or other high-cost needs, such as issues with housing and food availability. (For elite-level members, our 51 Behavioral Health System State Profiles<https://www.openminds.com/resource-type/behavioral-health-system-state-profile/>provide an in-depth look at the demographics, Medicaid financing arrangements, safety-net behavioral health system, and largest payer and provider organizations in every state).

[Monica E. Oss]

Taken together, spending by consumer type and by state can allow executives of provider organizations to estimate market potential in each state and the data can then be used to develop a market plan for the Medicaid sector and value-based reimbursement. In addition, if U.S. health policy discussion turns back to the concept of "block grants" for Medicaid, these variations in spending present challenges to national policy (see Design Issues in Medicaid Per Capita Caps: An Update<https://www.macpac.gov/wp-content/uploads/2017/07/Design-Issues-in-Medicaid-Per-Capita-Caps-An-Update.pdf>).

To read our full analysis, check out our new market intelligence publication- State Medicaid Expenditures Per Enrollee: An OPEN MINDS Reference Guide<https://www.openminds.com/?p=779728>. Our analysis includes a summary of national Medicaid spending per person, trends in national spending per enrollee, and state-by-state spending data per Medicaid population, including children, non-newly eligible adults, individuals with disabilities, and the aged population.

For more on working with payers in a value-based market, join us at The 2017 OPEN MINDS Management and Best Practices Institute<https://california.openminds.com/agenda/> in Long Beach, California for the session, "Building New Payer/Provider Partnerships: A Town Hall Discussion On How To Collaborate With Managed Care Organizations," led by Steve Ramsland, Ed.D., Senior Associate, OPEN MINDS and featuring Carole Matyas, Vice President of Behavioral Health Operations, Wellcare; Elena Fernandez, Director of Behavioral Health, St John's Well Child and Family Center; Richard Knecht, M.S., Principal Consultant, California State University-Sacramento; and Chris Daher, Manager of Provider Partnerships, Beacon Health Options.






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