Kaiser: Savings hard to find in programs for dual-eligibles

By Sam Baker - 10/30/12 02:22 PM ET

Everyone agrees that people who receive both Medicare and Medicaid generate significant expenses for the federal government — but controlling those costs might be harder than it seems.

A new paper from the Kaiser Family Foundation says efforts to better coordinate care for "dual eligible" seniors have produced only modest savings. Dual-eligibles make up a relatively small share of all Medicare and Medicaid recipients, but they make up an outsized portion of spending within both programs.

Dual-eligibles are among the oldest, sickest and poorest patients in the country — which makes their care some of the costliest. There is broad support in Washington for reducing spending through better care coordination between the two programs, but the Kaiser Family Foundation review says big savings will be hard to find.

"A careful review of the literature thus far raises questions about the potential to achieve large savings, without jeopardizing the quality of patient care, through capitated managed care programs or care coordination approaches in the [fee-for-service] environment," the Kaiser paper states. "At the same time, there is evidence to suggest more modest savings are achievable, if programs are highly targeted."

A handful of existing pilot programs have been successful in reducing the number of hospital admissions for dual-eligibles, but significant savings haven't necessarily followed, Kaiser found. In some cases, that's simply because getting providers to try a new program requires the government to shell out incentives that cost more than simply paying for care in the existing framework.

The most successful projects segregate dual-eligibles based on their specific healthcare needs, Kaiser found.

"Taken together, these studies provide strong evidence that care management might be effective at reducing costs for some subgroups of dual eligibles, such as those with severe chronic illnesses or at high risk for hospitalization," the paper says. "However, the estimates of potential net savings from these interventions are typically modest."