Medicaid Innovation and Succeeding Under Risk: In Conversation with Dr. Mandy Cohen
Last week, I sat down with Dr. Mandy Cohen for the Vital Signs podcast. Mandy was the former Secretary of North Carolina’s Department of Health and Human Services (DHHS) and COO at the Centers for Medicare and Medicaid Services (CMS). She recently joined Aledade, a healthtech unicorn that partners with primary care practices to help them succeed in value-based care. You can listen to our conversation here on Spotify or Apple Podcasts.
Mandy has had a fascinating path including starting as an internal medicine physician, helping implement the Affordable Care Act at CMS and leading North Carolina through COVID. In our discussion, we touched on Medicaid policy and innovation and her work in North Carolina around Social Determinants of Health (SDOH), addressing the economic and environmental conditions that influence health. Mandy also explained more about Aledade Care Solutions, the new wraparound care business line she’s building at Aledade, and what’s required for primary care practices to succeed under risk.
Three things in particular stood out to me from our discussion.
1. The state-by-state nature of Medicaid provides a powerful way to experiment but can make building in the space difficult
In our conversation, Mandy discussed receiving an 1115 waiver from CMS to pay for SDOH interventions that Medicaid normally didn’t cover while leading North Carolina’s DHHS. These included care management helping high risk pregnant mothers to ensure their babies didn’t end up in Neonatal Intensive Care Units (NICUs) and housing interventions that alleviated conditions that exacerbated residents’ asthma.
These interventions and others to increase access to food, transportation, and housing, are potentially powerful ways to reduce healthcare costs and improve outcomes. But as Mandy acknowledged, the reality is the efficacy of these interventions for different patient phenotypes has not been fully studied. The 1115 waivers provide a great way for states to experiment and generate evidence around what might or might not work. As Mandy described, states closely watch each other’s experiments and build on each other. These experiments are key for evidence-based national policy.
At the same time, the many variations in state-by-state Medicaid make building in the space hard. States have different standards for attribution, quality measures and risk adjustment. The vision Mandy outlined: letting states experiment, using the evidence to generate effective national policy and then having CMS use its federal contributions to state Medicaid programs (FMAP) to drive standardization, makes a ton of sense.
2. The expansion of Aledade from care enablement to care services is an interesting example of the blurring of differences between healthtech companies as they expand their market size
Aledade’s model of partnering with primary care practices to help them succeed in different risk-based arrangements was initially focused on technology to surface insights at the point of care, consulting/coaching, and contracting. In contrast to many other companies whose business model relied on taking on risk, Aledade didn’t offer additional care services.
With Aledade Care Solutions (ACS), the business line Mandy is starting, Aledade is wading into providing care directly. The reasoning Mandy outlined for this new business line is compelling: some practices, particularly smaller ones, just don’t have the internal staff to offer the types of further care that Aledade knows lowers costs and improves outcomes. This includes end-of-life planning, where Aledade made their first acquisition, pharmacist consultations, care navigation and other virtual appointments. ACS allows Aledade to work with, and drive savings in, a broader set of practices. These services will be a limited part of Aledade’s model. They are targeted at specific patients in specific practices.
Aledade’s initial approach was framed as more “capital efficient and [scalable]” than wraparound risk-based companies with more services. ACS seems poised to drive further savings and outcomes, but slightly blurs that contrast. Its introduction seems to hint at a broader trend: as healthtech companies get bigger, the lines that so starkly differentiated them, may increasingly start to blur.
3. New specialty care model adoption should accelerate as risk-based primary care companies like Aledade grow
When discussing ACS, Mandy stressed Aledade would be focused on leveraging its position in primary care workflows to influence specialty care via partnerships. The primacy of this focus makes sense given its potential cost savings and the innovative lower-cost, risk-based players starting to enter the space. In my 2022 Health Tech Predictions I predicted the focus on risk-based businesses would increasingly move to specialty care given the volume of spend they can help control.
This focus will only accelerate as organizations like Aledade expand their footprint. With an economic model completely aligned to a practice’s performance under risk, and technology to influence physician and practice decision-making at the point of care, Aledade and companies like it are perfectly positioned to accelerate the adoption of new solutions in nephrology, musculoskeletal care, oncology, cardiology and beyond.