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Saving Medicaid money in Camden, N.J.

Dan Gorenstein Apr 3, 2014

Around the country, hospitals and doctors are teaming up to better manage patients. They’re trying to strip away wasteful practices like redundant testing. They’re doing so with what are known as accountable care organizations, or ACOs, and one in Camden, N.J., is drawing attention.

The name may be jargon, but Mark Humowiecki with the Camden Coalition of Healthcare Providers says the concept of an ACO is pretty basic: “Spend more money on primary care in order to keep people out of the hospitals.

Under the ACO model in Camden, insurers give the hospitals and doctors a chunk of money to care for the some 32,000 Medicaid patients in the city. The idea is to make it very easy to get primary care, and avoid unnecessary hospitalizations and ER visits.

If it works, the savings could be immense.

“We think we could save anywhere from 5 to 10 percent of spending,” says Humowiecki. “That’s millions of dollars a year.”

The challenge, says Brookings Institution’s Mark McClellan, is that Medicaid patients often struggle. 

“They may not have regular homes, they may have trouble getting their medications, they may have other stresses in their lives,” McClellan says. “And that is hard work to do.”

As one of about a dozen Medicaid ACOs, Camden is on the front line of the front lines of health reform, says McClellan.

And people are watching. If it works here, Camden becomes a national model.

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