When it comes to delivering health care, Medicaid health plans are committed to serving our most vulnerable members. However, funding cuts compromise our ability to provide quality care. Instead, we advocate for “smart spending” – increased investments into Medicaid that pave the way for high value, sustainable care.
Balancing Costs and Quality Care
In the context of rising health care costs and a fiscal deficit, spending cuts often emerge as a primary strategy. While these cuts might seem financially prudent, they risk overlooking programs that create significant value.
The Role of Provider Incentive Programs
Provider incentive programs exemplify a type of smart spending. They demonstrate how robust resource allocation into the Medicaid ecosystem can enhance patient care and quality outcomes. These programs are an important tool for health plans to support its provider network while also transforming the health and wellness of many at-risk patient populations.
IEHP’s Pay for Performance Program
Inland Empire Health Plan (IEHP) is one of the 10 largest Medicaid health plans in the country and the largest not-for-profit Medicare-Medicaid public plan, managing health care coverage for over 1.5 million people in the Inland Empire. Our services are delivered through partnerships with more than 9,000 providers, 855 clinics and 36 hospital partners. Medicaid serves as an essential lifeline for children, families, seniors, pregnant women, and individuals with disabilities.
We provide additional funding to doctors and clinics when they meet important health goals for patients, like making sure children get checkups, women receive cancer screenings, and individuals with chronic illnesses receive necessary care. For example, more than 280,000 of our Medicaid members require interventions for chronic illnesses like hypertension, cancer, and Diabetes.
IEHP’s Pay for Performance (P4P) program is a financial incentive program that rewards clinicians for high quality outcomes. This program is designed with our members, clinicians, and their teams in mind. For many measures in the program, performance is tracked and monitored, baseline performance is assessed, and improvement and achievement targets are set. If clinicians show improvement or achieve favorable member outcomes, there is an opportunity for these clinicians to earn these incentives. And, most importantly, the motivation behind this program is to improve the quality outcomes of our members.
Proven Results
Since its inception, the P4P program has demonstrated significant success. Our data shows that investing in providers leads to better health outcomes and keeps more people healthy. In Measurement Year (MY) 2020 and 2021, IEHP budgeted nearly $87M into the program. By MY 2022, we nearly doubled the budget into these programs at $187M. This substantial investment continued into MY 2023. We found that this type of intentional increased investment has led to substantial improvements in key health metrics, which can translate into long-term cost savings by preventing more serious health issues.
The graph below illustrates the trends for 10 measures and shows steady progress over time.
As reflected above, improvements in quality metrics such as Developmental Screening in the First Three Years of Life showed considerable improvement over time. Breast Cancer and Colorectal Cancer screening rates also increased over the most recent two measurement years, demonstrating the program’s effectiveness in promoting preventive care. Metrics like Controlling High Blood Pressure and Hemoglobin A1c Control also saw noteworthy gains. In 2024, these efforts culminated as one of several key reasons why IEHP received its highest quality scores ever, earning our first 4-star rating from the National Committee for Quality Assurance for our Medi-Cal line of business.
A Call to Action
IEHP’s experience demonstrates that increased investments into programs like a provider incentive program can effectively enhance health care quality performance across various categories. While cutting essential services might offer short-term savings, it also risks worse outcomes and higher costs in the future.
IEHP’s P4P program shows that improving care quality does not conflict with cost control. Rather, smart spending achieves both. Policymakers should consider increasing investments into quality focused Medicaid programs to promote better health outcomes. By supporting strategic investments in Medicaid, we can ensure the ongoing success of key programs that safeguard the health of our communities while being fiscally responsible.
