How the health care data supply chain can help Medicaid

Big changes are coming to Medicaid if the Biden administration has its way. In the future, the safety-net program is expected to increasingly emphasize health equity and value-based principles as it evolves to prioritize care coordination, measurable outcomes and provider accountability.


To achieve its goal of high-quality, affordable, person-centered care, the administration plans to transform Medicaid by centering the concept of equity on future payment models. “From here on, the Innovation Center will embed equity in every aspect of its models by seeking to include more providers serving low- and modest-income, racially diverse, and/or rural populations,” top CMS officials wrote in a published article in the journal Health Affairs.

Essential to this effort will be engaging more Medicaid providers in value-based contracts so their performance can be measured and Medicaid patients can be steered to the highest-quality, lowest-cost providers. That’s where the concept of the healthcare data supply chain enters the picture.

Reliable, accurate, high-quality data is critical to the success of any value-based care program, because it provides the foundation for measuring changes in care quality, cost-effectiveness, utilization, risk-adjustment, any other factors that form the basis of value-based agreements between payers and providers.

The health care data supply chain is a conceptual framework for describing the material, information, and services involved in producing and delivering a product or service to an end user. In the realm of the healthcare data supply chain, healthcare organizations’ own systems represent the supplier, the data itself is the raw material and the end users are patients, clinicians and other stakeholders.

By utilizing this concept, Medicaid programs can become more data-driven in their decision-making to drive better performance and more equity in value-based agreements.

The problem with health care’s approach to data

Since the advent of hospital information systems and electronic health records in the 1980s, health care has embraced a do-it-yourself mentality when it comes to data. This DIY approach typically starts with a massive effort to aggregate as much data as possible followed by an equally massive effort to find the expertise required to leverage that data. The result: years of expensive, slow, and cumbersome work whose value is imperceptible, at best.

One of the biggest problems with health care data is that overall time to value is very long. IT departments build an interface, test the interface and that interface gets deposited into a data warehouse. Then they start building a report and, finally, test that report.

Add to that the advancement of big data tech, where mature organizations have invested in an analytics function that spends significant time developing a complex artificial-intelligence-based tool or predictive algorithm, but don’t invest behind user experience features to actually take the output of the algorithm and put it into practice in a way that impacts anyone's life by improving patient care, operations or finances.

The problem lies in health care’s tremendous disconnect between the data supply chain and actual care delivery, represented by the difference between the data we have and the insights required for action. It’s almost like having the raw materials to make a car when the production side is tooled up to make computers.



Too often, the data that we need to transform care is simply not readily available and/or delivered in a way that is actionable and consumable by front-line caregivers in the ways that they need. This inability to package healthcare data for easy consumption is a classic supply chain problem that manifests itself in four primary ways:

Poor response times: Operating models, organizational layouts and processes aligned by functions create silos. Decision-making becomes linear. Delays arise as information is exchanged among silos, which causes the information to be out-of-date and lengthens supply chain response time.

Lack of visibility: Current technology and processes limit the ability to have end-to-end supply chain visibility at order, product or shipment levels. This results in inaccurate supply chain plans, higher fulfillment costs and an inability to sense problems as they occur and, ultimately, resolve them quickly.

Inefficient fulfillment model: Most companies’ fulfillment models seem to be static and struggling to manage the cost and complexity of the new omnichannel world. Traditional distribution and transportation models have been created to support high volumes and fewer SKUs. These models can prove to be inflexible and inefficient when extended to individual customized orders, wider product assortment and multiple last-mile delivery options of the omnichannel world.

Inflexible technology: Legacy technology platforms created around supply chain functions or silos are frequently time-consuming, costly to deploy and inflexible to extend to solve evolving business needs.

The health care data supply chain’s 3 key objectives

For a moment, take a step back from health care to consider that a modern, consumer-driven supply chain requires rapid acquisition and nimble adaption to evolving needs. For example, Amazon and Netflix have built a vast infrastructure that allows for instant gratification at a level of scale and reliability that is unmatched by competitors. This advantage is powered by a continuously running, curated, integrated, and growing supply chain that feels like a service working with and for their customers.

There is no reason that health care data shouldn’t show up for end users like a package, movie, book, or any other consumer good. The health care data supply chain must connect user demand to supply in a responsible way while accomplishing three key objectives:

• Transforming real-time insights into strategic opportunities
• Powering point-of-care decisions
• Identifying the impact of operational and financial decisions

COVID-19 proved the urgency of data liquidity, in that organizations had to figure out how to proactively use their data to anticipate needs across a diverse set of stakeholders. The health care data supply chain is the first step in creating data liquidity. For Medicaid’s future of value-based care, data-guided decision-making, and emphasis on health equity, embracing the health care data supply chain concept may be the key to transformation.

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Medicaid Work Requirements: Are They Illegal and Will They Increase Poverty?

On November 15, 2017, the Institute for Policy Studies issued a report noting that the three richest people in the United States (Jeff Bezos, Warren Buffet, and Bill Gates) were wealthier than the 160 million people in the bottom half of the country combined. Two months later, the Centers for Medicare & Medicaid Services (CMS) issued a guidance in support of mandatory work requirements for some of the 160 million individuals to obtain access to health care.


Specifically, the guidance said that based on its authority under Medicaid, CMS would allow states to require that non-elderly, non-pregnant adults (able-bodied adults) work as a condition to their eligibility for Medicaid. CMS asserted that the work requirement would further Medicaid's objectives by promoting better mental, physical, and emotional health and help individuals and families rise out of poverty and attain independence. Although these are admirable goals, the work requirement arguably violates the objectives of the Medicaid Act and will not promote better health, lift people out of poverty, or help able-bodied adults attain independence.


Medicaid requires States with monetary support from the federal government to "furnish (1) medical assistance on behalf of families with dependent children and of aged, blind, or disabled individuals, whose income and resources are insufficient to meet the costs of necessary medical services, and (2) rehabilitation and other services to help such families and individuals attain or retain capability for independence or self-care[.]"


In its guidance, CMS cites the language of independence as support for the work requirement but some argue that, based on the statutory context, this means physical functioning. Even if the language is found to support the need for individual independence, Medicaid requires States to provide services to help families and individuals attain independence. Yet in the guidance, CMS shifts this responsibility to able-bodied adults. This is counter to the plain language of Medicaid, which focuses on states' responsibilities, not the responsibility of individuals who qualify for Medicaid. However, in its guidance, CMS prohibits states from using Medicaid dollars to able-bodied adults in meeting the work requirements.


Although, based on the language of Section 1115, CMS can waive compliance of the requirements of Medicaid, such as providing services to help families and individuals attain independence, to enable a state to carry out an experimental, pilot, or demonstration project that would promote the Medicaid's objectives, some argue that CMS cannot add requirements to Medicaid, such as working, without Congress providing additional authority.


Under former President Barack Obama, CMS allowed states to expand Medicaid coverage to able-bodied adults and implement voluntary work training programs. As a result of this expansion, a Kaiser Family Foundation literature review showed that Medicaid's expansion positively affected access to health care, utilization of services, the affordability of care, the financial security among the low-income population, and it led to reductions in the cost of uncompensated care for hospitals and clinics.


In the past, courts have invalidated waivers that required work requirements because they did not meet the objectives of the statute. In this case the work requirement does not meet the objective of Medicaid, which is to provide health care for poor people. According to the Heritage Foundation and the Kaiser Family Foundation, the Medicaid work requirement will make it harder for able-bodied adults to register for Medicaid, limiting access to health care necessary to keep them well enough to work, and may increase health care costs because these adults will seek care in the emergency room instead of seeking routine care.


Moreover, there is no evidence that the work requirement will fulfill the objectives CMS lists in the guidance: promote better health, help individuals and families rise out of poverty, or able-bodied adults attain independence. According to the Chetty study cited in the CMS guidance, higher income was correlated with greater life expectancy throughout the nation, but there was significant state variation. For instance, in the ten states (Michigan, Ohio, Indiana, Kentucky, Tennessee, Arkansas, Oklahoma, Kansas) with the lowest life expectancy for low-income individuals there was a significant association with healthy behaviors, not unemployment rates, i.e. working. This is significant because many of these states are seeking Medicaid waivers to require work requirements based on the theory that working promotes better health. The lack of evidence correlating employment to better health is further illustrated by the fact that the guidance says this hypothesis, i.e. that work requirements will improve the health of able-bodied adults on Medicaid, should be proven by states, who have no expertise in conducting health benefits research, without financial or program development assistance from CMS.




Additionally, the work requirement will not lift people out of poverty. A recent University of Berkeley report found that by 2013, US manufacturing workers made 7.7% below the median wage for all occupations, causing 1 of 3 manufacturing workers to go on welfare and almost 1 million manufacturing workers and their families to enroll in Medicaid/CHIP (equal to 15% of all manufacturing workers). Thus, obtaining employment does not guarantee that an individual or their families will rise out of poverty.


Nevertheless, CMS notes in the guidance that in the past many states have had successes with voluntary work programs linked to Medicaid. Yet, CMS does not cite any specific state program that has been successful in lifting people out of poverty or making them independent.


In fact, states that implemented a work requirement for recipients on the Temporary Assistance for Needy Families (TANF) did not show long-term success in cutting poverty or increasing long-term employment because states did not provide substantial job support such as training, education, and placement. The result of the TANF work requirement was to remove many recipients from the program, causing them to sink further into severe poverty, after which many states stopped tracking the requirement because they did not have sufficient money in their budgets to fund the tracking.


The problems with the Medicaid work requirement are further illustrated by Kentucky's "Helping to Engage and Achieve Long Term Health (HEALTH)" Medicaid waiver, which was approved on January 12, 2018 and is being challenged in federal court. First, although the waiver requires able-bodied adults to complete 80 hours of community engagement in a 30-day period or state-approved health literacy or financial literacy course to be eligible for Medicaid, it fails to include any information about the state efforts to support unemployed able-bodied adults in meeting the requirements.


Second, in the CMS guidance, applications for waivers allowing work requirements were required to include information about how the state would address market forces and structural barriers to work, such as high unemployment. This information was not included in the approved Kentucky waiver and it is unclear how Kentucky, with the 4th highest percentage of people in poverty out of 50 states, is going to be able to address market forces and structural barriers to work for unemployed able-bodied adults. Hence, arguably CMS violated its own rules by approving a waiver that did not fulfill the requirements of the guidance.


If CMS wants to fulfill Medicaid's objective of lifting people out of poverty and helping able-bodied adults attain independence, then CMS should require states to provide support for Medicaid beneficiaries that would make them independent. Specifically, CMS has the authority and should require states to provide Medicaid beneficiaries with:


1. Voluntary job training that is show to result in long-term full-time work;

2. Subsidized work wages until the job provides a living wage;

3. Subsidized transportation to job training and work; and

4. Subsidized or free childcare.


Some of these measures are already being discussed by states, such as Montana and Pennsylvania, to support families and able-bodied adults on Medicaid in becoming independent.

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