Case Study: Accountable Care Organization Results in Medicaid Savings for Low-Income, Childless Adults

A pilot Accountable Care Organization program in Minnesota is reaping dramatic savings in it first year, according to the journal Governing.

Minnesota’s Hennepin County, which includes Minneapolis,  embarked in January on a pilot program aimed at childless adults with incomes below 75 percent of federal poverty levels. The program currently has 10,000 clients.

“For the costliest participants (the top 5 percent, which utilize 64 percent of the program’s funding), the county has reduced costs between 40 percent and 95 percent per individual through its case management,” according to the Governing case study. “Using a model that anticipates 24 clinical visits plus monthly medications for the program’s population (which is more likely to have chemical dependencies, mental health needs and chronic pain), Hennepin County projects it will spend $3,571 per enrollee per year—compared to $138,000 if patients always sought care at the emergency room, as many had been.”

Care is managed for the clients through a grant from the Minnesota Medicaid office which pays the county $800 to $1000 per month per participant. The county then coordinates care for each client. In aggregate, the program is posting a “profit,” which is then plowed into new services serving the population. “Thanks to its savings from the first year of the two-year program, Hennepin County is establishing a new sobering center for the chemically dependent in 2013, as well as hiring more workers for hospital interventions and purchasing transitional housing units for the program’s homeless population,” Governing writes.