The 2021-22 Budget: CalAIM: Equity Considerations

analysis full gutter The 2021-22 Budget: CalAIM: Equity Considerations MARCH 2021 The California Advancing and Innovating withdrawn proposal, and analyzes overarching Medi-Cal (CalAIM) proposal is a far-reaching set issues related to the proposal. The second post of reforms to expand, transform, and streamline in this series analyzes CalAIM financing issues, Medi-Cal service delivery and financing. This including both the Governor’s funding plan for post—the third in a series assessing different CalAIM as well as CalAIM’s policy changes related aspects of the Governor’s proposal—analyzes to Medi-Cal financing. The fourth post in this equity considerations in the CalAIM proposal. The series will assess how CalAIM could affect the care first post in this series provides an overview of provided to seniors and persons with disabilities CalAIM, including the key changes from last year’s served by Medi-Cal. Background What Are Health Disparities and Health definition, while a widening of such disparities Equity? Health disparities and health equity does the opposite. Coronavirus disease 2019 are concepts that have no universally accepted (COVID-19) has accentuated health disparities in definition. As such, this post uses a broad California as seen in Figure 1 on the next page definition of the terms. Health disparities, under which breaks down differences in life expectancy this broad definition, exist when a particular and COVID-19 mortality by select racial or ethnic population group experiences systematically group. worse health or greater health risks than another Health Disparities Are Significantly Driven population group. Population groups can by a Variety of Medical and Nonmedical be categorized in different ways, such as by Determinants of Health. The determinants demographic characteristics such as race and of health are the range of personal, social, gender, geography, socioeconomic status, or other environmental, and medical factors that influence factors such as access to housing. Population health status. The following bullets distinguish groups that may experience worse health and give a sense of the relative magnitude of the outcomes can include people of color, low-income different medical and nonmedical determinants individuals, and homeless or housing-insecure of health as drivers of health status. Figure 8, individuals. For instance, individuals experiencing later in this post, breaks out many of the health homelessness are disproportionately likely to determinants we identified in our review of the develop health conditions such as mental illness, research and indicates which determinants different which is associated with comorbidities and higher CalAIM components are intended to address. premature death rates. Most often, academic • Medical Determinants. We find that research measures health disparities in terms of differences in access to health care explain differences in mortality, though other measures as much as 20 percent of health disparities. such self-reported health status, diagnosed chronic Notably, these medical determinants of conditions, and disability are sometimes used. health have been found to explain differences The narrowing of health disparities corresponds in health disparities even after accounting to improvements in health equity, under this broad 2021-22 LAO Budget Series 1 analysis full gutter Figure 1 security), health behaviors (such as diet and alcohol, Racial and Ethnic Disparities Exist in Terms of tobacco, and drug use), and Life Expectancy and COVID-19 Mortality environmental factors (such as California air or water quality). Nonmedical Life Expectancy COVID-19 Death Rate determinants of health are (Age in Years)a (Deaths per 100,000 Residents)b among the most systematic Asian differences between certain population groups, such as racial Black and ethnic groups, and therefore explain much of the disparity in Hispanic health outcomes between those groups. Accordingly, changes White to such groups’ nonmedical 70 75 80 85 90 30 60 90 120 150 circumstances could improve a 2017 data. their health and, as a result, reduce health disparities. b Data is up to date through February 2021. Note: There are significant differences in mortality within each racial or ethnic group. For example, Medi-Cal Provides Health the Asian category comprises many different ethnic groups and we understand there is variation among these ethnic groups in terms of life expectancy and COVID-19 death rates. Care Coverage to Populations COVID-19 = coronavirus disease 2019. Who Suffer Disparate Health Outcomes. Medi-Cal provides health care coverage to more than one-third of the state’s for other nonmedical determinants of population. In part by covering low-income health (which we discuss below). These individuals and families, Medi-Cal disproportionately differences include factors such as health serves state residents whose socioeconomic insurance status and the quality of health and health characteristics are associated with care provided. Research indicates individuals poor health outcomes. For example, Medi-Cal from disadvantaged population groups disproportionately covers state residents who often receive lower-quality care than others are out of work, disabled, and/or do not have a from more advantaged population groups. college degree. Additionally, people of color are For example, some studies suggest the disproportionately represented in Medi-Cal relative existence of systemic disparities in the quality to the overall population. As Figure 2 on the of preventive care different groups receive, next page shows, Medi-Cal beneficiaries suffer leading to more preventable emergency worse health on a variety of dimensions compared department visits. Other research indicates to other state residents (which largely includes that racial bias or deficiencies in cultural those with other forms of coverage but also the competency on the part of some clinicians uninsured). can adversely affect the quality of care they Health Disparities Exist Within the Population provide. Served by Medi-Cal. Health disparities are • Nonmedical Determinants. Following our present among Medi-Cal beneficiaries of different review of academic literature, we find that the races or ethnicities. For example, as shown in nonmedical determinants of health likely are Figure 3 on page 4, compared to white Medi-Cal responsible for 80 percent or more of health recipients below age 65, non-senior Black Medi-Cal disparities. Nonmedical determinants include beneficiaries self-report poor or fair health (the two social determinants (such as income, housing worst ratings) at 30 percent higher rates. Hispanics status, racism and discrimination, intentional below age 65 on Medi-Cal, on the other hand, and unintentional physical harm, and food 2021-22 LAO Budget Series 2 analysis full gutter can result in premature death. Figure 2 Figure 4 on page 5 compares Medi-Cal Beneficiaries Suffer Worse Health the prevalence of major Outcomes Than Non-Medi-Cal Beneficiaries chronic conditions among the top 5 percent most costly 20% beneficiaries compared to Poor or fair overall health 10% Medi-Cal enrollees overall. In addition to having low incomes, which is true for all Medi-Cal 40% Poor or fair dental health enrollees, those who suffer from 20% the listed chronic conditions may come disproportionately from 4% Has no natural teeth Medi-Cal particular population groups— 1% Not Medi-Cal such as individuals lacking stable (Rest of State Population) housing or persons of color. For 15% example, Black and Hispanic state Ever diagnosed with diabetes 9% residents have higher rates of diabetes and Black state residents 34% experience homelessness at very Ever diagnosed with high blood pressure 29% disproportionate rates. State Has Attempted to 20% Reduce Health Disparities Recently experienced serious psychological distress 13% Through Various Medi-Cal Initiatives. As previously discussed, the Medi-Cal Source: California Health Interview Survey, 2018 or 2019 edition depending on the specific measure program serves individuals who (due to data constraints). disproportionately suffer from a myriad of health conditions and face other circumstances report poor or fair health at 24 percent lower rates associated with poor health. than non-senior white recipients. Accordingly, changes to the Medi-Cal program Health disparities also can be seen by looking that result in improved access to care or quality at how service needs vary among Medi-Cal of care have significant potential to reduce beneficiaries. The top 5 percent most costly health disparities. In recent years, the state has beneficiaries, on a per-enrollee basis, utilize over implemented several reforms to the Medi-Cal 30 times as many resources, in dollar terms, as program, which, in concept, have potential to the least 50 percent costly. This illustrates that a reduce health disparities across the state. These relatively small number of Medi-Cal beneficiaries reforms included (1) expanding Medi-Cal coverage have extremely disproportionate needs compared to additional populations—such as to single adults to more typical Medi-Cal beneficiaries. Moreover, under the Patient Protection and Affordable Care the top 5 percent most costly beneficiaries Act (ACA) optional expansion and to undocumented disproportionately suffer from certain chronic immigrants under age 26—and (2) establishing conditions—including mental illness, diabetes, programs that focus resources and attention on hypertension, asthma, and alcohol and drug the highest-risk, highest-needs beneficiaries, dependency—compared to Medi-Cal enrollees often with the intent to prevent the worsening of overall. Such chronic conditions often are severe health conditions. (The latter can serve to accompanied by comorbidities, which significantly address disparities since certain population groups impair the overall health of beneficiaries and disproportionately may be high-risk, high-need.) 2021-22 LAO Budget Series 3 analysis full gutter Twenty-four counties and one city Figure 3 have opted in to the Whole Person Self-Reported Health Differs Among Care program. As of September Medi-Cal Beneficiaries by Race and Ethnicity 2020, about 86,000 people were Medi-Cal Beneficiaries Ages 0-64 participating in Whole Person Care. Overall Self-Reported Health by Race or Ethnicity • Health Homes. The Health Poor or Fair Excellent or Very Good Homes Program, which was implemented in 2018, has similar Asian 18% 55% goals to the Whole Person Black 25% 57% Care program and provides extra services—including care Hispanic 15% 58% management—to Medi-Cal beneficiaries who suffer from White 19% 55% chronic health and/or mental health conditions that result in high use of health care services. Relative Likelihood of Reporting Being in Poor or Fair Health Twelve counties—with managed Compared to White Medi-Cal Beneficiaries care plans arranging and paying for services within these Asian -5% counties—are participating in the Health Homes Program. As of March 2020, Health Homes Black 30% served about 27,000 beneficiaries. This program also is set to expire -24% Hispanic at the end of 2021. • Mental Health Services Source: California Health Interview Survey, 2019 edition. Act (MHSA) Full-Service Partnerships. Approved by voters in 2004, MHSA places a 1 percent Three of these programs include: tax on incomes over $1 million and dedicates • Whole Person Care. The Whole Person Care the vast majority of associated revenues to program, which began in 2016, is a set of counties to provide mental health services. local pilot programs—typically run by county A substantial portion of the MHSA funding health agencies—to coordinate physical counties receive is required to be used on health, behavioral health, and social services Full-Service Partnerships, which provide for beneficiaries with the highest levels of intensive mental health and wraparound need and/or risk. Each local Whole Person services—such as housing, employment Care pilot determines target populations— support, and case management—to among a predetermined set which includes, individuals with the greatest mental health for example, high utilizers of services and needs. Full-Service Partnerships are intended homeless individuals—and develops strategies to provide services to populations—identified to tailor service delivery to those groups. The by counties—who disproportionately do program is funded with a mix of federal and not access mental health care. Counties local funds and is set to expire at the end of use a variety of dimensions to identify 2021. Notably, additional state-only funding these populations, which include (1) racial also has been provided to Whole Person or ethnic characteristics, (2) housing Care pilots to support housing services. status, or (3) criminal justice involvement. 2021-22 LAO Budget Series 4 analysis full gutter Care and/or Health Home Figure 4 programs. Certain Chronic Conditions Are Much More Prevelant Governor Proposed CalAIM Among the Most Costly Medi-Cal Beneficiaries as Part of the January 2020-21 Comparison of the 5 Percent Most Cosly and 95 Percent Least Costly Budget Before Withdrawing Medi-Cal Beneficiaries With the Listed Chronic Condition the Proposal in May. CalAIM is a large package of reforms aimed at (1) reducing health disparities by focusing attention 45% Serious mental health and resources on Medi-Cal’s 5% high-risk, high-need populations; (2) rethinking behavioral 27% health service delivery and Hypertension 4% financing, (3) transforming and streamlining managed care, and (4) extending federal funding 21% Diabetes opportunities currently available 3% under the state’s soon-to-expire 1115 waiver. Originally proposed 11% in January 2020 as part of the Asthma Top 5 Percent Bottom 95 Percent 5% 2020-21 budget, CalAIM was withdrawn at the May Revision 10% due to the COVID-19 pandemic Alcohol and drug dependency 1% and its estimated effects on the state’s fiscal situation. To maintain continuity of certain Medi-Cal programs such as Source: Department of Health Care Services Analysis of 2011 expenditure data. Whole Person Care and the Dental Transformation Initiative— whose federal authorization While not an explicit Medi-Cal program, under the state’s 1115 waiver would have expired Full-Service Partnerships provide services at the end of 2020—the state secured a one-year to many individuals eligible for Medi-Cal extension of the 1115 waiver. With this extension, and, accordingly, are often partially the state’s 1115 waiver is set to expire on Medi-Cal-funded. December 31, 2021. Figure 5 on the next page shows the counties that currently are participating in the Whole Person 2021-22 LAO Budget Series 5 analysis full gutter Figure 5 Whole Person Care and/or Health Homes Are Available in 26 Counties All Counties Operate Full-Service Partnerships Whole Person Care Health Homes Both Whole Person Care operated by City of Sacramento. Counties that offer Whole Person Care and/or Health Homes include roughly 87 percent of Medi-Cal beneficiaries statewide. 2021-22 LAO Budget Series 6 analysis full gutter Governor’s Proposal Overall Proposal Proposal Elements With Direct Health Equity Implications Reintroduces CalAIM in Largely Similar Form to Last Year’s Proposal. The Governor’s CalAIM reflects a large suite of proposed reforms 2021-22 budget reintroduces CalAIM. The vast that touch nearly every aspect of Medi-Cal. While majority of proposed CalAIM reforms are essentially essentially all of CalAIM has potential to improve unchanged from last year’s proposal except as health equity, certain CalAIM components are more relates to their proposed implementation time line. directly intended to do so. This section describes The Governor’s reintroduced proposal emphasizes the major components of CalAIM that are intended health equity as an important rationale for pursuing to directly have such impacts. CalAIM. For a general overview of CalAIM, see our Better Identification of High-Risk, High-Need budget post, The 2021-22 Budget: CalAIM: The Beneficiaries Through Population Health Overarching Issues. Management Programs. Population health CalAIM Reflects One of the Governor’s management programs represent a bundle of Proposals Aimed at Health Equity. The administrative activities—typically performed Governor’s 2021-22 budget includes a number of by managed care plans—that aim to (1) identify proposals that the Governor intends to improve beneficiaries’ medical and nonmedical risks health equity. While many of the new proposals and needs and (2) facilitate care coordination aim to improve reporting on health equity metrics, and referrals. CalAIM would require all Medi-Cal others would expand benefits with the goal of more managed care plans to operate population directly improving health equity. The major health health management programs. Managed care and human services proposals either wholly or plans would be required to collect and analyze partially intended by the administration to address information on their members’ health status, health equity include: service utilization history, and social needs. While existing data sources would form the basis of • Development of a Health and Human Services some of this information, a new standardized, Agency-wide health equity dashboard. statewide Individual Risk Assessment tool would • An analysis of COVID-19’s health equity be developed by the Department of Health Care implications. Services (DHCS) to ensure consistent information • Health system-wide equity reporting by the collection across managed care plans. With this proposed Office of Health Care Affordability. information, managed care plans would assign their • Inclusion of health equity benchmarks among members into one of four risk categories: “low risk,” new standards and requirements that would “medium and rising risk,” “high risk,” or “unknown be set on all managed care plans operating risk.” While plans would remain responsible for in the state, including those that provide connecting low-risk members to preventive and coverage through Medi-Cal and the state’s wellness services, they would be responsible for Health Benefit Exchange (Covered California). providing increasing levels of care coordination • Expanded Medi-Cal coverage of continuous and service linkages to their higher-risk members. glucose monitoring for beneficiaries with Type As discussed below, for many of their highest-risk I diabetes. members, plans would be required to provide a • Permanent expansion of certain telehealth higher level of case management services than services under Medi-Cal (which is intended they currently provide. Currently, at least 17 of the to improve access to health care among state’s 24 Medi-Cal managed care plans operate Medi-Cal beneficiaries). public health management programs generally 2021-22 LAO Budget Series 7 analysis full gutter consistent with the population health management how the target population of ECM compares to the requirements of CalAIM. target populations of the Health Homes Program Better Coordination of Services Through and Whole Person Care. ECM would build upon Enhanced Care Management (ECM). CalAIM case management strategies developed in these proposes to create a new statewide managed other programs that also were designed to focus care benefit, ECM, to provide intensive case resources and attention on the highest-risk and management and care coordination for Medi-Cal’s highest-need beneficiaries. most high-risk and high-need beneficiaries Provision of Broader Array of Nonmedical (provided they are enrolled in managed care). Supportive Services Through “in Lieu of The intent is for ECM to provide much more Services” (ILOS). CalAIM would authorize high-touch, community-centered care coordination managed care plans to provide an array of services than generally are available to the nonmedical services to their members. Under targeted populations, which include, for example, federal rules, these ILOS generally are nonmedical high utilizers of emergency departments and services that can be provided as alternatives to members with unstable housing. The intent is for standard Medicaid benefits in the managed care ECM to connect high-risk, high-need members delivery system. ILOS are intended to be provided to the appropriate services necessary for the in place of a more expensive standard Medicaid improvement of health outcomes. Figure 6 shows benefit. If states opt in to provide ILOS (and receive Figure 6 Comparing Target Populations: CalAIM (Enhanced Care Management) Versus Health Homes and Whole Person Care CalAIM (Enhanced Care Management) Health Homes Program Whole Person Care Beneficiaries must be from one of the Beneficiaries must have a chronic condition in Pilots were allowed to choose one or more of following categories: at least one of the following categories: the following populations: • Children or youth with complex physical, • At least two of the following: chronic • High utilizers of avoidable emergency behavioral, developmental, and/or oral obstructive pulmonary disease, diabetes, department, hospitals, or nursing health needs. traumatic brain injury, chronic or congestive facilities—high utilizers. • Individuals experiencing homelessness, heart failure, coronary artery disease, • Individuals with two or more chronic chronic homelessness, or who are at risk of chronic liver disease, chronic renal physical conditions. becoming homeless. (kidney) disease, dementia, substance use • Individuals with severe mental illness and/ • High utilizers with frequent hospital disorders. or substance use disorders. admissions, short-term skilled nursing • Hypertension and one of the following: • Individuals experiencing homelessness— facility stays, or emergency room visits. chronic obstructive pulmonary disease, homeless. • Individuals at risk for institutionalization diabetes, coronary artery disease, chronic • Individuals at risk of homelessness. who are eligible for long-term care or congestive heart failure. • Individuals recently released from services. • One of the following: major depression institutions, including jail or prison—justice • Nursing facility residents who want to disorders, bipolar disorder, psychotic involved. transition to the community. disorders (including schizophrenia). • Individuals at risk for institutionalization • Asthma. with serious mental illness, or children Beneficiaries must also meet at least one of with serious emotional disturbances or the following acuity/complexity criteria: substance use disorders with co-occurring • Has at least three or more of the chronic health conditions. HHP-eligible chronic conditions. • Individuals transitioning from incarceration • At least one inpatient hospital stay in the who have significant complex physical past year. or behavioral health needs requiring • Three or more emergency department immediate transition of services to the visits in the last year. community. • Chronic homelessness. CalAIM = California Advancing and Innovating Medi-Cal and HHP = Health Homes Program. 2021-22 LAO Budget Series 8 analysis full gutter federal funds in respect of them), federal law care plan demonstrates why provision of the benefit requires that ILOS be optional for managed care for an additional time would be cost-effective plans to provide and beneficiaries to accept. Under Figure 7 summarizes the proposed list of ILOS CalAIM, DHCS has proposed a menu of 14 ILOS benefits in the Governor’s CalAIM proposal. benefits that managed care plans could choose to Improved Access to Behavioral Health provide beginning in January 2022. (Managed care Services. As was shown earlier in Figure 4, a plans that elect to offer ILOS benefits could select higher proportion of Medi-Cal’s highest-need which specific benefits to provide.) Some of the beneficiaries suffer from severe behavioral health proposed ILOS benefits have restrictions on how conditions. Severe behavioral health conditions much they can be used or who is eligible for them, also are associated with worse physical health including benefits that are only available for use outcomes, as individuals with severe behavioral once in a beneficiary’s lifetime unless the managed health needs often have difficulty navigating their Figure 7 Proposed “In Lieu of Services” Benefits Benefit Description Services to Address Homelessness and Housing Housing depositsa Funding for one-time services necessary to establish a household, including security deposits to obtain a lease, first month’s coverage of utilities, or first and last month’s rent required prior to occupancy. Housing transition navigation Assistance with obtaining housing. This may include assistance with searching for housing or servicesa completing housing applications, as well as developing an individual housing support plan. Housing tenancy and sustaining Assistance with maintaining stable tenancy once housing is secured. This may include interventions for servicesa behaviors that may jeopardize housing, such as late rental payment and services, to develop financial literacy. Services for Long-Term Well-Being in Home-Like Settings Asthma remediationb Physical modifications to a beneficiary’s home to mitigate environmental asthma triggers. Day habilitation programs Programs provided to assist beneficiaries with developing skills necessary to reside in home-like settings, often provided by peer mentor-type caregivers. These programs can include training on use of public transportation or preparing meals. Environmental accessibility Physical adaptations to a home to ensure the health and safety of the beneficiary. These may include adaptations ramps and grab bars. Meals/medically tailored meals Meals delivered to the home that are tailored to meet beneficiaries’ unique dietary needs, including following discharge from a hospital. Nursing facility transition/diversion to Services provided to assist beneficiaries transitioning from nursing facility care to community settings, assisted living facilitiesc or prevent beneficiaries from being admitted to nursing facilities. Nursing facility transition to a home Services provided to assist beneficiaries transitioning from nursing facility care to home settings in which they are responsible for living expenses. Personal care and homemaker Services provided to assist beneficiaries with daily living activities, such as bathing, dressing, servicesd housecleaning, and grocery shopping. Recuperative Services Recuperative care (medical respite) Short-term residential care for beneficiaries who no longer require hospitalization, but still need to recover from injury or illness. Respite Short-term relief provided to caregivers of beneficiaries who require intermittent temporary supervision. Short-term post-hospitalization Setting in which beneficiaries can continue receiving care for medical, psychiatric, or substance use housinga disorder needs immediately after exiting a hospital. Sobering centers Alternative destinations for beneficiaries who are found to be intoxicated and would otherwise be transported to an emergency department or jail. a Restricted to use once in a lifetime, unless managed care plan can demonstrate cost-effectiveness of providing a second time. b New benefit introduced this year. Restricted to lifetime maximum amount of $5000, unless beneficiary’s condition changes dramatically. c Includes residential facilities for the elderly and adult residential facilities. d Does not include services already provided in the In-Home Supportive Services program. 2021-22 LAO Budget Series 9 analysis full gutter physical health needs. In addition, data indicate generally are intended to (1) increase capacity to that there are differences among Medi-Cal provide Medi-Cal behavioral health services—for populations in utilizing behavioral health services, example, by leveraging additional federal funding which may reflect disparities in access to care. for behavioral health services (including residential For example, Hispanic and Asian and Pacific mental health services)—and (2) increase access Islander beneficiaries utilize Medi-Cal mental health to Medi-Cal behavioral health care—for example, services at lower rates than other beneficiary by revising medical necessity criteria to make it groups. CalAIM includes a package of reforms to easier for beneficiaries to receive behavioral health Medi-Cal behavioral health service delivery, which services. Assessment This section provides our assessment of the could help address housing insecurity, (2) home potential of CalAIM to reduce health disparities modifications for beneficiaries with asthma could and thereby improve health equity. Overall, we find help address harmful environmental exposure, and that CalAIM has significant potential to improve (3) medically tailored meals could help address health outcomes for the highest-risk, highest-need unmet diet and nutrition requirements. Managed Medi-Cal beneficiaries. Improved health outcomes care plans also would take on a greater role in could lead to improved health equity insofar as addressing nonmedical needs through the new the improved outcomes are concentrated among ECM benefit, by coordinating some nonmedical certain groups who today disproportionately community care and human services for high experience worse health outcomes. We find this utilizers. Figure 8 on the next page provides likely would be the case under CalAIM, for reasons examples of how various CalAIM proposals address that we detail below. particular determinants of health, including both While CalAIM has potential to improve health medical and nonmedical ones. equity, we also find that it comes with significant By Better Connecting Individuals With a risks, challenges, and limitations. These relate to Larger Set of Medical and Nonmedical Services, implementation issues as well as oversight and Health Outcomes Could Improve. By providing evaluation. a wider array of services and better connecting individuals with those services, CalAIM could WHILE CALAIM COULD IMPROVE improve health outcomes. Specifically, the new statewide ECM benefit would require plans to HEALTH EQUITY… connect those individuals with higher needs to a more comprehensive set of health care and social CalAIM Would Increase Medi-Cal’s support services. Improving access to services Role in Addressing the Broader affecting determinants of health could improve Determinants of Health individuals’ outcomes. In addition, the package of the behavioral health reforms—generally intended CalAIM Includes Initiatives Aimed at to increase capacity for services provided and Addressing an Array of Medical and Nonmedical access to care—could improve overall health Determinants of Health. CalAIM would outcomes given that severe behavioral health significantly expand Medi-Cal’s role in addressing conditions are associated with a variety of physical nonmedical determinants of health outcomes, health comorbidities. Additionally, ILOS benefits primarily by encouraging managed care plans to have the potential to improve health outcomes for offer beneficiaries a range of nonmedical ILOS Medi-Cal beneficiaries by providing them access benefits. For example, (1) housing navigation to services that address some of the underlying services and payments for housing deposits nonmedical determinants of their health, like 2021-22 LAO Budget Series 10 analysis full gutter Figure 8 CalAIM Proposals and Determinants of Health They Would Address Health Determinanta Health Determinant Components Related CalAIM Proposal (Beyond ECM)b Medical Health insurance coverage Enrollment assistance for individuals transitioning from incarceration. (10% to 20%) Physical health care Extension of public hospital financing programs. Behavioral health care Behavioral health reforms. Dental health care Dental benefit expansion and incentive payments. Social circumstances Education None. (15% to 40%) Income None. Housing stability Housing and long-term services and supports ILOS. Race State oversight of population health management. Neighborhood safety None. Behavior Diet and nutrition Medically tailored meals for beneficiaries with unique dietary needs. (30% to 50%) Smoking None. Substance use Sobering centers ILOS. Extension of Drug-Medi-Cal Organized Delivery System. Level of physical activity None. Environment Exposure to pollution and contaminants Asthma remediation to mitigate environmental asthma triggers. (5% to 20%) a Percents in parentheses reflect the portion of health disparities explained by the listed determinant. They are listed as ranges due to the differences in academic research findings on the impacts of each determinant. b ECM has potential to address most determinants and their components through the coordination of Medi-Cal and non-Medi-Cal benefits. CalAIM = California Advancing and Innovating Medi-Cal; ECM = enhanced care management; and ILOS = in lieu of services. housing. The addition of asthma remediation to the groups that disproportionately suffer poor health list of ILOS benefits is particularly promising, as it outcomes today. The following bullets describe would remove triggers from the home environment several of the ways CalAIM could improve health that lead to worse health outcomes for Medi-Cal equity by narrowing disparities between different beneficiaries with asthma. groups. Possible Improvements in Health Outcomes • Narrowing Disparities Between Low- and Likely Would Be Concentrated Among High-Income Californians. Medi-Cal Individuals Who Currently Suffer the Worst exclusively serves low-income individuals. Health Outcomes. Many major CalAIM initiatives— As Figure 2, shows, Medi-Cal beneficiaries including those targeting the nonmedical generally suffer worse health outcomes than determinants of health—are aimed at improving non-Medi-Cal beneficiaries. Therefore, if health outcomes for Medi-Cal’s highest-risk, CalAIM is successful in improving the health highest-need beneficiaries. Many of the intended of even a subset of Medi-Cal beneficiaries, beneficiaries are homeless, have mental illness, are the health disparities between low- and at risk of institutionalization in nursing homes, and/ high-income state residents could narrow. or have one or more serious chronic physical health • Narrowing Disparities Between Those conditions. With and Without Stable Housing. Key CalAIM’s Targeting of Medi-Cal’s components of CalAIM aim to improve the Highest-Risk, Highest-Need Beneficiaries Could health and other outcomes for individuals Serve to Reduce Disparities and Improve Health experiencing or at risk of homelessness. Equity. Any improved health outcomes that result (Medi-Cal likely is the main source of health from CalAIM could improve health equity insofar as care coverage for state residents who the improved outcomes are concentrated among are homeless.) These include, but are not 2021-22 LAO Budget Series 11 analysis full gutter limited to, targeted enrollment of homeless CalAIM Builds on the Potential individuals into ECM, the addition of new Promise of Existing Programs housing services through ILOS (including CalAIM Consolidates and Scales up Health paying housing deposits and utilities), and Homes and Whole Person Care. As previously medical respite for individuals who no longer discussed, CalAIM would build upon existing need hospital-level care but do not have programs—Whole Person Care and Health a safe place to convalesce. Accordingly, if Homes—that would end once CalAIM is launched. successful, CalAIM could improve health CalAIM does this in a number of ways. First, outcomes for those without stable housing by requiring managed care plans to establish and thereby narrow the disparities between population health management programs and those without stable housing and those who provide ECM on a statewide basis, CalAIM would are stably housed. expand certain service components of Whole • Narrowing Disparities Between Certain Person Care and Health Homes to all 58 counties. Racial or Ethnic Groups. Certain population Second, while ILOS offerings would vary regionally groups within Medi-Cal generally have higher depending on which ILOS plans elect to provide, risks and/or needs. For example, Black overall, such services offerings are likely to Medi-Cal beneficiaries report worse overall expand relative to today under existing programs. health and suffer from chronic conditions such Third, CalAIM would consolidate Whole Person as diabetes at higher rates than other racial or Care and Health Homes within a single suite of ethnic groups. Moreover, Black state residents programs operated or arranged by managed care as a whole experience homelessness at plans. Because Whole Person Care and Health highly elevated rates. Accordingly, if CalAIM Homes target overlapping, though not identical, is successful in improving health outcomes populations, challenges have been reported among Medi-Cal’s highest-risk, highest-need by program administrators around determining beneficiaries, these improvements likely which program should serve which populations. would be concentrated among individuals By consolidating the services offered by these from certain racial or ethnic groups, which programs under managed care, CalAIM eliminates could reduce disparities between such this potential fragmentation challenge. The nearby groups. In addition, persons of color are text box briefly discusses how CalAIM relates to disproportionately represented among seniors Full-Service Partnerships. in the Medi-Cal program compared to seniors Evaluations of Existing Programs Reveal living in the state as a whole. Many CalAIM Some Promising Results. Evaluations have been reforms could improve care for Medi-Cal’s carried out of Whole Person Care, Health Homes, senior population, which, in turn, could and Full-Service Partnerships. These evaluations disproportionately benefit the state’s seniors show significant progress has been made under of color. these programs in establishing the infrastructure Comparing CalAIM and Full-Service Partnerships The approach of California Advancing and Innovating Medi-Cal (CalAIM) is similar to that of Full-Service Partnerships in that both provide supportive services (including housing) and care coordination to individuals with severe mental illness. While Full-Service Partnerships would continue in conjunction with CalAIM, the similarity between the approaches provides the Legislature an opportunity to (1) draw lessons from these longstanding Mental Health Services Act programs in its deliberations over CalAIM and (2) explore where coordination between CalAIM programs and Full-Service Partnerships might improve service delivery and outcomes. 2021-22 LAO Budget Series 12 analysis full gutter needed to identify and serve high-risk, high-need assessment, the evaluations do not conclusively beneficiaries. Infrastructure improvements include show improved outcomes. the formation of care coordination and outreach • Challenges Developing Population Health teams, the execution of multiagency data-sharing and Service Delivery Infrastructure agreements, and the establishment of incentive in Programs. While clear progress was payments to improve local service delivery. In the made under Whole Person Care and case of Whole Person Care, these infrastructure Health Homes in establishing cross-agency improvements facilitated the enrollment of over collaboration, data sharing, and program 100,000 program beneficiaries by the third year linkages, challenges also arose. For example, of implementation (almost half of whom were despite the execution of a new data sharing experiencing homelessness, a population that can agreement under Whole Person Care, half be hard to reach and engage in services). of all pilots reported continued difficulties Additionally, the evaluations of these existing in obtaining necessary data for successful programs provide some evidence of improvements program implementation. Additionally, pilots in clinical care and health outcomes. For commonly reported a lack of available housing example, Whole Person Care enrollees reported and behavioral health services capacity improvements in their overall and mental health, constraints as impediments to improving Health Homes participants visited emergency enrollee outcomes. departments at a significantly lower rate after one • Clinical Care and Health Outcome year of enrollment, and Full-Service Partnership Improvements for Whole Person Care clients utilized primary health care at higher rates Participants Were Not Systematically than before they joined the program. (Full-Service Different Than Similarly Situated Partnership clients also demonstrated lower rates Non-Participants. We previously highlighted of criminal justice involvement than prior to program several clinical care and health outcome participation.) However, as we discuss below, these improvements that were found in evaluations evaluations fall short of conclusively demonstrating of existing pilot programs that CalAIM builds improved clinical care and health outcomes as a upon or draws inspiration from. In our result of these programs. Final evaluations of Whole assessment, however, these evaluations fall Person Care and Health Homes have yet to be short of conclusively demonstrating improved completed, which we expect will shed additional outcomes as a direct result of the pilot light on the impacts of these programs. programs. As shown in Figure 9 on the next page, while the interim evaluation of Whole …THE PROPOSAL FACES SEVERAL Person Care shows certain improvements in RISKS, CHALLENGES, AND care delivery among program participants, LIMITATIONS these improvements do not appear to differ systematically from a comparison group of fairly similarly situated Medi-Cal beneficiaries Implementation Issues not participating in Whole Person Care. CalAIM Builds on Programs Whose Impacts This similarity could indicate that the Are Not Fully Understood. As previously noted, improved outcomes reported for program evaluations of existing programs that major new beneficiaries may not be due to the impacts CalAIM initiatives would build on or otherwise draw of the programs but instead due to other inspiration from do not conclusively demonstrate factors, such as the tendency of individuals the effectiveness of these programs in improving experiencing acute health crises to improve care delivery and health outcomes. The following in health following acute episodes (provided bullets highlight several of the challenges that adequate medical care is delivered). Moreover, existing programs have faced and why, in our differences in acute care utilization between Whole Person Care participants prior to their 2021-22 LAO Budget Series 13 analysis full gutter effectiveness of different Figure 9 approaches in terms of Whole Person Care Interim Evaluation Does Not Conclusively program structure, care Demonstrate Improved Acute Care Outcomes coordination, and population Acute Care Utilization Per 1,000 Member Months targeting and outreach across different participating Emergency Department Utilization Inpatient Hospitalizations program administrators. 180 120 We understand that Program Participants Program Participants evaluations of Full-Service 100 160 Partnerships similarly Comparison 80 have rarely focused on Groupa 140 Comparison Groupa comparative effectiveness of 60 different approaches across partnership participants. 120 40 Pre-WPC Pre-WPC WPC WPC Pre-WPC Pre-WPC WPC WPC While we understand that Year 1 Year 2 Year 1 Year 2 Year 1 Year 2 Year 1 Year 2 different approaches across the state in implementing a a Comparison group reflects a large sample of Medi-Cal beneficiaries with similar health and other characteristics as program may be warranted Whole Person Care participants but who are not enrolled in Whole Person Care. given differences in local Note: Pre-WPC Years reflect the two years prior to when a Whole Person Care participant enrolled in the program and a comparable time period for the comparison group. WPC Years 1 and 2 reflect the first two years after a program environments and needs, participant joined the program and a comparable time period for the comparison group. we believe different WPC = Whole Person Care. programmatic approaches may produce different results. enrollment in Whole Person Care and the Evaluation of how pilot comparison group raise questions about results compare given differences in approach whether the two groups are similar enough could help the Legislature better determine to compare for the purpose of judging the which models of care to expand to additional impacts of Whole Person Care. All that said, localities. the evaluations only cover the expiring pilot Based on the above findings related to the program’s earliest years of implementation. programs CalAIM would build upon, it is difficult to Positive impacts directly related to program definitively expect CalAIM to achieve its intended implementation could take longer to arise. outcomes related to improvements in health equity. The forthcoming evaluations should cover the While ECM Target Populations Generally Are impacts of the latter years of implementation Reasonable, They May Be Overly Broad for and, therefore, fundamentally could change Targeting Those With Greatest Needs. Although our understanding of the impacts of these the administration says it intends for ECM to be programs. targeted at the top 1 percent of Medi-Cal utilizers, • Comparative Effectiveness of the proposed criteria for ECM eligibility may apply Different Approaches Among Program to a much larger share of the overall Medi-Cal Administrators Not Evaluated. The population. Some managed care plans have Whole Person Care and Health Homes suggested that, as currently written, the proposed interim evaluations primarily analyze the eligibility criteria could apply to a significant share impacts of the pilot programs from a total of their enrollees. However, as the administration statewide perspective, while also highlighting releases further information on CalAIM, it may differences in approach among the different continue to clarify the proposed ECM eligibility participating program administrators. Per the criteria such that it applies to a narrower group of state’s evaluation instructions, however, the current Medi-Cal enrollees. evaluations do not focus on the comparative 2021-22 LAO Budget Series 14 analysis full gutter Medi-Cal Beneficiaries Not Enrolled in benefits. For example, constraints in the local Managed Care Would Not Be Able to Access housing supply in certain communities could make Certain New CalAIM Benefits. CalAIM’s most assisting members in obtaining appropriate housing significant benefit expansions—ECM and ILOS—are a challenge for managed care plans. Notably, proposed to be available only through managed limited housing availability has been among the care, through which more than 11 million Medi-Cal most common challenges cited by implementers beneficiaries receive services. Medi-Cal’s more than of the Whole Person Care pilots in addressing the 1 million beneficiaries eligible for comprehensive nonmedical determinants of health. coverage who receive care through Medi-Cal’s Plan Discretion Makes Access to ILOS fee-for-service delivery system would not be eligible Benefits Uncertain. Federal law requires the for these services. Many of these beneficiaries are state to allow Medi-Cal managed care plans to members of populations with high needs, such as choose whether—and which—ILOS benefits to elderly and disabled individuals and foster youth, offer. If managed care plans do not widely opt who potentially could benefit from the expanded to provide ILOS benefits, the availability of these services and care coordination under CalAIM. new services could be more limited in scope than As part of CalAIM, DHCS intends to develop a the state ultimately desires. Furthermore, the specialized model of care for current and former degree to which managed care plans would elect foster children. At this time, however, how this to offer ILOS benefits would vary from county to new specialized model of care would allow current county. As a result, which specific ILOS benefits and former foster children to avail themselves of would be available to a Medi-Cal beneficiary CalAIM’s new managed care benefits is unclear. would vary based on where they live in the state CalAIM as a Package of Reforms Only Would and what managed care plan they are enrolled Address Certain Drivers of Health Disparities. in. In addition, plans may vary in determining Although CalAIM would address a wide range of which beneficiaries receive ILOS benefits. These underlying determinants of health, there are some potential inconsistencies in access to ILOS significant nonmedical drivers of health disparities benefits could reduce CalAIM’s effectiveness in that it does not directly address. For example, promoting health equity statewide. Therefore, while while some ILOS benefits would address particular the proposed ILOS benefits under CalAIM have nonmedical determinants of health—in particular, significant potential to reduce health disparities housing insecurity—they would not directly mitigate in the Medi-Cal program, these uncertainties in the negative consequences of other nonmedical access to ILOS benefits makes the degree to determinants, such as unemployment or education which this would occur unclear. However, although level. Similarly, although a healthy diet and regular ILOS benefits are proposed to be optional for exercise are two health behaviors that have a managed care plans to provide at this time, the significant impact on health outcomes, the ILOS administration has indicated that including these medically tailored meals benefit is the only one with new benefits in CalAIM reflects an opportunity to any direct relationship to these behaviors. assess the feasibility of converting some services Constraints in Supply Could Limit proposed under ILOS into statewide mandatory Effectiveness of Reforms. Whether the CalAIM benefits in the future. To the extent that more package would be able to effectively reduce health plans provide these services in the future—either disparities within Medi-Cal depends, in part, on voluntarily or as a result of a statewide mandate— the degree to which managed care plans would be disparities in access to these services, and thus able to take advantage of and expand community health disparities in the Medi-Cal program, could be resources to serve the broader, nonmedical further reduced. needs of their members. Accordingly, limits in the Strategy for Ensuring Lack of Bias in availability of community resources could limit the Population Health Management Program effectiveness of the CalAIM initiative, as well as Implementation Deserves Scrutiny. Under the the time frame for realizing potential health equity CalAIM’s population health management proposal, 2021-22 LAO Budget Series 15 analysis full gutter managed care plans would use algorithms determining whether CalAIM is proving successful to assist in identifying their highest-need, in promoting health equity would be difficult. highest-risk enrollees (in addition to using Moreover, CalAIM may provide the state with traditional identification means such as referrals new opportunities to track Medi-Cal beneficiary and self-assessments). Research has shown such outcomes, the improvement of which could help set algorithms sometimes are biased, such that they the foundation for future progress on health equity. systematically refer fewer members of certain racial As previously discussed, under CalAIM, managed groups for additional medical care. These biases care plans would be required to build, improve, and could inadvertently contribute to existing health maintain significant infrastructure for the purpose disparities. As a result, the administration has of identifying high-risk, high-need beneficiaries and proposed that managed care plans be required to tracking their connection to services. This, in turn, identify any potential biases in their algorithms and presents the state with an opportunity to draw correct for them. However, the administration has on this data to better track Medi-Cal beneficiary not yet provided guidance on how managed care outcomes and needs, as well as CalAIM’s overall plans should identify and correct for bias in their performance in improving health outcomes and algorithms. equity. For example, the state potentially could track (1) rates of housing instability among Evaluation and Oversight Issues Medi-Cal beneficiaries; (2) changes in Medi-Cal Unclear How Progress in Improving Equity beneficiaries’ risk scores; (3) progress in linking Would Be Measured and Evaluated. By high-risk, high-need beneficiaries to services; and improving health outcomes for many of the state’s (4) various other beneficiary outcomes and CalAIM highest-risk, highest-need residents, CalAIM is impacts. As yet, however, the administration has intended to promote health equity. However, to not clearly articulated how improved managed date, the administration has not released a detailed care plan infrastructure related to population plan for how CalAIM would be evaluated. Without health management would translate into improved careful and robust monitoring and evaluation, statewide performance monitoring through public reports and dashboards. Key Takeaways and Issues For Legislative Consideration CalAIM Has Potential to Improve Health significant social and policy challenges the state Equity... As mentioned above, health disparities faces—including many challenges that have are driven in large part by nonmedical determinants traditionally been considered beyond the scope of health. By encouraging managed care plans to of health care policy. Due to the scale of these provide nonmedical services, CalAIM has potential challenges, whether CalAIM can make a meaningful to address some of the underlying causes of health impact on them is unclear. Evaluations of similar disparities, and thereby promote health equity. programs, such as the Health Homes Program and Additionally, CalAIM would direct more health care Whole Person Care, have yet to find any conclusive resources toward the highest-need, highest-risk evidence that the major interventions included beneficiaries. Targeting enrollees who systematically in CalAIM—such as ECM and ILOS—lead to face the worst health outcomes also has the significant reductions in health disparities. potential to improve health equity in Medi-Cal. Legislature Could Consider Which …But Success Is Far From Certain. In Nonmedical Determinants Medi-Cal Is Most addressing the nonmedical determinants of health, Suited to Address. While CalAIM is intended CalAIM is intended to mitigate some of the most to address several nonmedical determinants of 2021-22 LAO Budget Series 16 analysis full gutter health, there are other nonmedical determinants sacrifice the opportunity to draw down additional of health that it is not positioned to address. For federal funding for these services. example, as discussed earlier, overall economic Recommend Formulating Specific Equity well-being and educational status also are key Metrics to Ensure CalAIM Is Meeting Equity nonmedical determinants of health that drive Goals. While CalAIM holds promise in improving disparities in health outcomes among population health equity, its success is not certain. This groups. To address these other sources of makes monitoring the performance of CalAIM health disparities, the Legislature might need to critical. To do so, we recommend that the pursue distinct policy changes that are better Legislature formulate a set of metrics related to equipped to improve outcomes in these areas. the health equity goals of CalAIM and require In addition, for the nonmedical determinants the administration to report on these metrics of health that CalAIM is intended to address, periodically. In addition to including metrics related whether Medi-Cal is the program best equipped to to care delivery and utilization, we also would improve outcomes is unclear. For example, there encourage inclusion of metrics that more directly are other state departments that aim to address indicate beneficiary health outcomes to the fullest housing issues (a key nonmedical determinant extent possible. Figure 10 on the next page lists of health that CalAIM intends to address). Given examples of health equity metrics that, should these considerations, the Legislature may wish to systems allow, we would recommend be included consider which nonmedical determinants of health in periodic public reports or a dashboard related Medi-Cal is most primed to address, and consider to CalAIM. (This list is not meant to be exhaustive.) whether additional resources should be provided Creation of a CalAIM equity reporting mechanism to other state programs to address nonmedical or dashboard could be considered in concert with determinants of health statewide. Importantly, the Health and Human Services Agency’s effort without Medi-Cal playing a role, the state would to create a dashboard tracking health disparities beyond Medi-Cal. 2021-22 LAO Budget Series 17 analysis full gutter Figure 10 Potential CalAIM Equity-Related Metrics Reported by Race/Ethnicity, Age Group, and Major Chronic Condition Desired Direction Category Metric of Change Indication Service Utilization Preventive health care Primary care visits Improved provision of preventive care Case management Improved service coordination Dental visits Improved provision of preventive care Behavioral health Improved initiation of services penetration rates behavioral health services Behavioral health services Improved engagement with engagement rates behavioral health services Other health care Emergency room visits Improved health and provision of preventive care Hospitalizations Improved health and provision of preventive care Nursing home stays Improved health and provision of preventive care Social services CalFRESH participation rates Improved service coordination program participation CalWORKs participation rates Improved service coordination IHSS participation rates Improved service coordination Beneficiary Outcomes Overall health status Self-reported health status Improved health Self-reported Fewer functional limitations functional limitations Mortality rates Improved longevity Chronic physical Diabetes prevelance Fewer chronic conditions health conditions Asthma prevelance Fewer chronic conditions High-blood pressure prevelance Fewer chronic conditions Behavioral health Level of care changes over time Improved mental health and less substance abuse Housing stability Self-reported housing stability Improved housing stability Frequent address changes Improved housing stability Note: For feasibility, any metric likely must have an administrative data source. We identified a potential data source for each metric listed, though the degree to which the state's information technology systems would be capable of reporting each metric is uncertain. In particular, breaking down each and every metric by race/ethincity, age group, and major chronic condition may not be feasible. CalAIM = California Advancing and Innovating Medi-Cal and HSS = In-Home Supportive Services. 2021-22 LAO Budget Series 18 analysis full gutter LAO Publications This report was prepared by Ben Johnson, Corey Hashida, and Ned Resnikoff, and reviewed by Mark C. Newton and Carolyn Chu. The Legislative Analyst’s Office (LAO) is a nonpartisan office that provides fiscal and policy information and advice to the Legislature. 2021-22 LAO Budget Series 19