Cost, Utilization, and Quality of Care: An Evaluation of Illinois' Medicaid Primary Care Case Management Program

PURPOSE In 2006, Illinois established Illinois Health Connect (IHC), a primary care case management program for Medicaid that offered enhanced fee-for-service, capitation payments, performance incentives, and practice support. Illinois also implemented a complementary disease management program, Your Healthcare Plus (YHP). This external evaluation explored outcomes associated with these programs. METHODS We analyzed Medicaid claims and enrollment data from 2004 to 2010, covering both pre- and post-implementation. The base year was 2006, and 2006-2010 eligibility criteria were applied to 2004-2005 data to allow comparison. We studied costs and utilization trends, overall and by service and setting. We studied quality by incorporating Healthcare Effectiveness Data and Information Set (HEDIS) measures and IHC performance payment criteria. RESULTS Illinois Medicaid expanded considerably between 2006 (2,095,699 full-year equivalents) and 2010 (2,692,123). Annual savings were 6.5% for IHC and 8.6% for YHP by the fourth year, with cumulative Medicaid savings of $ 1.46 billion. Per-beneficiary annual costs fell in Illinois over this period compared to those in states with similar Medicaid programs. Quality improved for nearly all metrics under IHC, and most prevention measures more than doubled in frequency. Medicaid inpatient costs fell by 30.3%, and outpatient costs rose by 24.9% to 45.7% across programs. Avoidable hospitalizations fell by 16.8% for YHP, and bed-days fell by 15.6% for IHC. Emergency department visits declined by 5% by 2010. CONCLUSIONS The Illinois Medicaid IHC and YHP programs were associated with substantial savings, reductions in inpatient and emergency care, and improvements in quality measures. This experience is not typical of other states implementing some, but not all, of these same policies. Although specific features of the Illinois reforms may have accounted for its better outcomes, the limited evaluation design calls for caution in making causal inferences.