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It’s possible to cut costs while giving quality health care

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With New York state confronting a $6.1 billion budget deficit, the state is facing severe cuts to Medicaid, a program that serves as a lifeline to millions of New Yorkers living with significant physical and behavioral health challenges. Gov. Andrew Cuomo has convened a “Medicaid Redesign Team” to identify billions in savings without harming care.

But is it really possible to save money while helping the sickest among us get better? We believe that it is if we address people’s mental and physical health needs in an integrated, highly coordinated way. And we have the results to prove it.

Between 2017 and 2018, the Mount Sinai Health System (a major hospital system), Healthfirst (New York’s largest nonprofit health insurer) and the Institute for Community Living (a community-based behavioral health agency) conducted a pilot focusing on a group of Medicaid members with serious mental health, substance use and physical health diagnoses.

This population has long been considered nearly impossible to serve well. They frequently use emergency rooms and require inpatient hospitalizations, which are the major drivers of Medicaid costs. Because one of the biggest barriers to treatment is the complexity of a health care system in which different health care entities rarely work together in a meaningful way, the pilot focused on developing a multiagency model to effectively create one integrated care pathway for our clients.

The Mount Sinai Health System provided physical and behavioral health care and care management services; the Institute for Community Living provided intensive in-home and community-based service psychosocial support services, and Healthfirst financed the treatment group.

We addressed physical, behavioral and social service needs in several ways, from providing more stable housing to connecting patients to family, to helping them get to their doctors’ appointments. We created seamless access to all different kinds of care. Most importantly, we built trust by asking participants to identify what they believed was affecting their ability to manage their health — not what we thought.

After more than a year, our clients reduced their use of inpatient medical hospitalizations, improved their blood glucose testing and monitoring, got more medical attention for kidney disease, attended more follow-up appointments after hospitalization for mental illness, and increased their diabetes screening.

Our clients received more outpatient behavioral health and care management services. And because of this investment in outpatient and support services, the overall costs to help these patients get better went down by about $50 per person per month, leading to overall Medicaid savings of $1.3 million.

If we expanded this pilot to the approximately 130,000 people statewide who fall into this Medicaid subgroup, we could save more than $75 million. And we think this whole-person model could be applied to many more people in New York City and across the state.

Our pilot succeeded because we invested in individual care based on what patients told us they needed and made that care easy to get. We treated the whole person, not separate conditions because people with behavioral health issues often have multiple chronic physical health conditions such as diabetes and asthma. Treating in silos doesn’t work.

This is the kind of investment the state should consider as it looks for ways to reduce Medicaid costs. By collaborating across mental and physical health, and across health care entities, we can help the most vulnerable get better and save money at the same time.

Sabina Lim and David Woodlock
Dr. Sabina Lim is the vice president and chief of strategy, behavioral health, for the Mount Sinai Health System. David Woodlock is the president and CEO of the Institute for Community Living and a former deputy commissioner at the state Office of Mental Health.



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About Institute for Community Living

It is Institute for Community Living’s (ICL) mission to help New Yorkers with behavioral health challenges live healthy and fulfilling lives by providing comprehensive housing, health care, and recovery services. We take a trauma-informed approach—meeting the people we serve wherever they are, working together to support them in achieving their goals.

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