Thinking About Clinical Outcomes in Medicaid

Abstract

As Medicaid expands in scope and influence, it is evolving toward being a "purchaser" of quality health care. This commentary discusses measurement and incentivization of clinical outcomes in Medicaid. Advantages and disadvantages of outcome versus process measures are discussed. Distinctions are drawn between the roles of Medicare and Medicaid, including the implications of the growth in Medicaid managed care. Medicaid's influence is particularly notable for obstetric, pediatric, newborn, and long-term care. We provide data on 3 Medicaid outcomes: potentially preventable hospital admissions, readmissions, and complications. The commentary concludes with suggestions for choosing and implementing outcome-oriented value-based purchasing initiatives in Medicaid.

Figure 1.

Market shares by payer by care category, US hospital admissions, 2012. Source: Authors' analysis of 2012 National Inpatient Sample. Notes: Numbers in parentheses are total stays by care category. The total count of 36.5 million stays also includes 49 835 uncategorized stays. Because the “Private + MCO” payer category may include some stays paid by Medicaid managed care organizations, the “Medicaid” payer shares are lower-bound estimates. “Pediatric” is defined as age 17 years and under. “Neonate” refers to sick newborns.