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How a Tiny Office in Ohio Is Transforming Health Care

Some say John Kasich is "the first governor who has been able to move the private sector to really participate in health-care reform."
by | November 2018

Eight years ago, Greg Moody got a call in his car from John Kasich, who would soon be elected governor of Ohio. Moody had worked on health policy with Kasich during his congressional tenure in the 1980s and ’90s. “Greg, we’re getting the band back together,” Kasich told Moody.

Kasich laid out his vision for a special department to focus on reimagining health care in the state. The way he saw it, even the most well-meaning health reform efforts too often get derailed because of bureaucratic confines. Siloed agencies either don’t want to work together or can’t share information with one another. Government can’t always get private providers to play along. Competing interests of the public, private and nonprofit sectors often muddle overarching health goals.

Moody, who was working as a health-care consultant, wasn’t sure he wanted to come on board. “I said, ‘With all due respect, sir, you were a little tough to work with,’” Moody recalls. But Kasich told him, “Oh, I’ve mellowed out since then.” So Moody accepted the offer to lead the new department. And in January 2011, almost as soon as Kasich sat down in the governor’s chair, Ohio’s Office of Health Transformation was born. 

The idea was to empower a small cadre of decisionmakers to revamp what health care looked like from an operational standpoint, to reimagine how residents interfaced with the health-care system and to control costs. Initially, the office consisted of just nine people. “There’s a saying that ‘too many cooks spoil the broth,’” Kasich says today. “There were too many people trying to manage this sector, and you’d get nothing but confusion and inefficiency.”

One thing the governor expressly wanted to avoid was a massive reorganization of agencies. “What was going wrong in the health-care space was all of this fragmented organization. Some states have tried to solve that with a superagency,” Moody says. He had worked in one previous administration in Ohio, for instance, that had consolidated its jobs and family services departments, and “for four years we just fought the organization, and we didn’t actually do anything to improve services.”

Instead, the two decided to keep agencies largely as they were, “but draw a line around the group that we think could get the most value out of working together,” Moody says. So the new office would work largely as a convening force, bringing together the heads of all agencies that touch health care -- including Health, Medicaid, Mental Health and Addiction Services, Jobs and Family Services, Veterans Affairs, Administrative Services, as well as representatives of the private insurance market -- to dedicate some time to reforms and long-term health improvement. 

The office was initially only meant to be a temporary solution to kick off Kasich’s health agenda. “We were only supposed to be an 18-month strike team, get the right people working together, and then get out,” Moody says. But eight years later, the office is still alive. To be sure, it faces an uncertain future: Kasich will step down in January, thanks to term limits, and Moody left for a job at Ohio State University in August. The office itself is down to only two employees. But as Kasich’s administration comes to a close, it’s clear that the office he created has lived up to its name as a truly transformational force in health care. “The work of department heads is incredibly complex. It’s hard to get your head above the day-to-day,” says Trish Riley, executive director of the National Academy for State Health Policy. “When you have an office like this that respects and supports them to think big, it’s incredible -- especially as health care continues to cut across so many sectors.”

 


Part of the Office of Health Transformation’s success was Ohio Gov. John Kasich’s push to expand Medicaid. (AP)

 

Lots of states have aspired to the same kinds of health reform goals as Ohio: reduce the number of uninsured citizens, connect people with better health care, and shift from a payment model based on the number of services provided to one based on the value and quality of care. 

Part of Ohio’s success is the result of Kasich’s push to expand Medicaid. Since the 2010 Affordable Care Act allowed states to expand Medicaid coverage to include people up to 138 percent of the federal poverty line, 33 states have done so, bringing the national number of uninsured patients to an all-time low. Most of the Medicaid expansion states have been run by Democrats. 

When running as the Republican candidate for governor, Kasich had largely stayed mum on the topic of Medicaid expansion. But once he was in office, he began pushing the state to expand the coverage. He repeatedly called on the legislature to approve expansion, but his fellow Republican lawmakers refused. So Kasich took an unconventional tack: He bypassed the legislature and asked the state Controlling Board, a bipartisan seven-member committee that oversees certain issues of the budget, for its approval. In 2013, the board voted 5-2 in favor.

Ohio’s expansion has had an especially big impact relative to other states’. According to a recent report from the Government Resource Center at Ohio State University, more than 650,000 Ohio residents gained insurance, 96 percent of people who needed opioid treatment received it and 37 percent of smokers who quit cited Medicaid as a reason for their cessation. The cost to the state: $21 per person. To put that into perspective, Oregon also did an extensive study on the impact of Medicaid expansion back in 2013 -- it offered a version of Medicaid expansion before the Affordable Care Act -- and found health outcomes largely unchanged. 

The results in Ohio -- and Kasich’s dogged support -- have made Medicaid expansion a somewhat more bipartisan issue there than in many other states. “Medicaid works,” says Barbara Sears, Ohio’s Medicaid director, who previously served as a Republican state legislator for eight years. “The number of people I could line up for you who said, ‘I got that surgery,’ ‘My diabetes is under control,’ ‘My high blood pressure is under control,’ ‘I can now work 20 hours a week,’ ‘I can now go back to school’ -- there are endless stories.” 

But what really set Ohio apart was how the Office of Health Transformation worked to make sure that Medicaid enrollees were getting the most out of their benefits. The office helped develop an integrated eligibility system so beneficiaries could see whether they also qualified for food assistance, child care, child welfare and cash assistance. Ohio’s Department of Administrative Services, which worked directly with the Office of Health Transformation to build the system, received an award for its work earlier this year from the American Public Human Services Association. 

 


Greg Moody says he’s always envisioned the Office of Health Transformation “as a strike team. ‘Here’s a problem: Convene, disband and repeat.’” (AP)

 

At the direction of Moody’s office, federal Medicaid expansion dollars went toward expanding behavioral health options and community health services throughout the state, to ensure that Ohio’s costliest residents were not just getting care, but getting care that served them well. 

The first step was to start paying behavioral health providers a better rate. The office restructured Medicaid rates so the level of reimbursement matches a provider’s qualifications (previously all providers received the same amount based on the service they provided, not on their training or skill). It expanded the offerings of more comprehensive mental health care, but the Office of Health Transformation went even further. To prevent providers from declining to see the patients with the biggest mental health needs, and to help those patients avoid having to hunt down doctors who would see them, the state identified the 5 percent of patients that were the costliest in behavioral health and matched them with a provider who could best serve them. That expanded access seems to have made a difference: The Government Resource Center’s recent study found that, among Medicaid enrollees who had been screened for depression or anxiety, 86 percent reported not to have had a problem finding mental health care.

But the real muscle of the Office of Health Transformation is its convening power. Moody began assembling different teams of leaders around each problem the state wanted to tackle. For example, one of the office’s goals was to expand community-based care for people with long-term health problems, so Moody brought together leaders from Medicaid and the Department of Aging, behavioral health professionals, and lawyers. These teams would work together intensely for a few months, and often included sub-groups tasked with developing, say, new standards for background checks or more efficient methods of reimbursement. There was one rule: You couldn’t leave the room to get permission. “That way, people really sent the person in charge of making decisions for their office. And if that person wasn’t there, then a decision would be made for them,” Moody says. “That’s why I always envisioned us as a strike team. ‘Here’s a problem: Convene, disband and repeat.’”

“Since the beginning, the Office of Health Transformation has clarified their measurement targets, their policy targets and what needs to come out of it. That’s been an efficiency boon,” says Timony Sahr, director of research and analytics at the Government Resource Center.

Perhaps the biggest shift in Ohio has been the move to pay health-care providers based on quality of care rather than the amount of services and tests they provide, which began statewide in 2014. That’s something that a few states, including California, New York and Oregon, have already done as well. But the National Academy of State Health Policy notes that Ohio has seen the most dramatic early results: Among the Medicaid population, costs for patients with chronic lung disease, for example, decreased by 18 percent; costs for asthma patients decreased by 20 percent. More health outcomes will be assessed as they become available, but already nearly 90 percent of Ohio’s Medicaid patients are covered by this pay-for-value model of care.

In order to make that pay-for-value model more sustainable, the Office of Health Transformation again convened stakeholders to agree on which population health goals were the most urgent. They settled on three: mental health and addiction; chronic diseases; and maternal and infant health. So providers now get bonuses for meeting improvement goals in those areas, as well as “enhanced payments” on administrative changes that are known to help keep people well: offering same-day appointments, providing some form of 24/7 care and prioritizing office visits based on risk. 

That has transformed Medicaid reimbursements, but Kasich wanted to standardize those goals for private insurers as well. He invited the CEO of every major health insurance company in the state to a roundtable, where he asked if they would follow the state’s new model of primary care that offers incentives based on the health goals outlined. Every CEO said yes, although not everyone has followed through so far. “I’ve been involved in just about every health reform strategy since 1978, and this is the first governor who has been able to move the private sector to really participate in health-care reform,” says Lorin Ranbom, director of the Government Resource Center. “It’s a testament to the Office of Health Transformation. They were capable of getting it done.” 

 

Ohio’s health transformation hasn’t all been smooth sailing. 

Legislators and residents were roiled when a 2018 audit found that pharmacy benefit managers -- third-party middlemen who administer drug benefits -- had billed Medicaid $223 million more than they reimbursed pharmacies. After a series of stories in The Columbus Dispatch about the snafu, the state legislature demanded to know what had gone wrong. State Medicaid officials blamed the managed care plans, which directly handle pharmaceutical benefits. “That was just not a sufficient response,” says Amy Rohling McGee, president of the Health Policy Institute of Ohio. Medicaid ended its contract with the pharmacy benefit managers in August.

Another issue has been moving people with long-term care needs into managed care plans -- a stated goal that’s fallen flat, with those populations remaining the last vestige of those on a fee-for-service plan. Ohio has also found itself overwhelmed by the opioid epidemic, which claimed more than 4,000 lives there in 2016. For his part, Moody says his office worked “a full court press” on the opioid issue, enrolling soon-to-be-released prisoners into Medicaid, closing loopholes in the state’s prescription drug monitoring program, and fully funding medication-assisted treatment, or MAT. The Centers for Disease Control and Prevention considers MAT a “whole person approach” to weaning addicts off opioids. The Government Resource Center study this year found that 64 percent of Ohio’s Medicaid enrollees with an opiate disorder received some form of MAT. 

Republicans in the legislature are still threatening to end Medicaid expansion in the state. In May, under pressure from GOP lawmakers, Kasich submitted a waiver to the federal government to add a work requirement to Ohio’s Medicaid program. The proposal is narrow compared to other such waivers. Kentucky’s waiver, for example, acknowledges that around 100,000 people will lose Medicaid benefits because of the work requirement; Ohio only anticipates 36,000 losing benefits. Still, it’s a reminder that not everyone supports Medicaid expansion or the kind of reforms that have been implemented over the past eight years. 

At least 17 states will swear in new governors in January. That includes Ohio, where neither Mike DeWine, the Republican candidate, nor Richard Cordray, the Democrat, has said whether he plans to keep the health transformation office in place. Nonetheless, Moody and Kasich hope that the new administrations will see the Office of Health Transformation as a model. 

When he ran for president in 2016, Kasich took heat from his Republican primary opponents for his health-care decisions. He was assailed for expanding Medicaid, which many Republicans see as an unsustainable financial proposition that merely increases the size of government. These days, Kasich says he’s not interested in pleading his case to other Republicans about why he believes expanding and transforming health care works. He says he’s convinced history will show he made the right decision. “Tell me how [else] you’re going to go about meeting the needs of people. Tell me what you’re going to do to help the drug addicted and mentally ill. I haven’t heard of a better solution,” he says. Everything else “is all smoke and mirrors.”

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