New York State can save money and improve health outcomes in its $54 billion Medicaid program by giving patients more incentive to “take ownership” of their own healthcare, according to a new report released today by the Empire Center for Public Policy.

The report focuses on Medicaid’s most at-risk patients — those with diabetes or pre-diabetic conditions, cardiovascular problems and manageable mental and substance abuse disorders with chronic health conditions. It explains how New York can reduce the incidence chronic diseases and save money on Medicaid by using incentives to promote healthy behavior and encourage patients to seek preventive care in appropriate settings.

“Getting people to change their behavior isn’t easy, but keeping just one Medicaid recipient from becoming diabetic can increase that patient’s quality of life and ultimately save hundreds of thousands of dollars in healthcare expenses over that one person’s lifespan,” said author Russell Sykes, a senior fellow with the Empire Center. “We can learn from the experience of private health insurers and other states that have developed a variety of promising patient incentive programs.”

“Incentives were crucial to the success of welfare reform in the 1990s, and they can play an equally important role in the reform of our Medicaid system,” Sykes added.

Sykes noted New York already has received one of 10 federal grants designed to provide direct cash or other rewards to Medicaid patients who enroll in disease prevention and management programs. In negotiating for a waiver of federal Medicaid rules, the Cuomo administration should push for greater flexibility to offer patient incentives, he said. The report said the state should also:

• experiment with a variety of cash or cash-like incentives to encourage patients with chronic conditions to access primary and preventive services, adopt healthy behaviors and follow recommended treatment plans;
• remove barriers that limit private managed care plans’ ability to provide higher cash or cash-equivalent rewards for healthier behavior to their Medicaid clients;
• incorporate proven approaches from other states that have already designed incentive programs and mechanisms to boost patient responsibility; and
• test multiple approaches on a small scale and evaluate them carefully.

View the full report here.