Care Coordination Program for Washington State Medicaid Enrollees Reduced Inpatient Hospital Costs

Managing clinically complex populations poses a major challenge for state agencies trying to control health care costs and improve quality of care for Medicaid beneficiaries. In Washington State a care coordination intervention, the Chronic Care Management program, was implemented for clinically complex Medicaid beneficiaries who met risk criteria defined by a predictive modeling algorithm. We used propensity score matching to evaluate the program's impact on health care spending and utilization and mortality. We found large and significant reductions in inpatient hospital costs ($318 per member per month) among patients who used the program. The estimated reduction in overall medical costs of $248 per member per month exceeded the cost of the intervention but did not reach statistical significance. These results suggest that well-designed targeted care coordination services could reduce health care spending for Medicaid beneficiaries with complex health care needs.