Why Fallon is focusing on MassHealth, Medicare

LAST MONTH, Fallon Health announced that it would exit most of the commercial health insurance market and focus predominantly on public plans like MassHealth (Massachusetts’ version of Medicaid) and Medicare.  To some, it was a counterintuitive move because the commercial market is generally perceived to be lucrative and a counterbalance to underfunded government-sponsored plans.

The reason we have confidence in this decision is that we are filling a need in the market that is actually growing.  As the pandemic has revealed, while Massachusetts offers perhaps the best medical care in the nation, even our vaunted health care system is not without holes.  We still need to make progress on the social determinants of health – the underlying conditions such as food insecurity or homelessness that research shows have a direct bearing on a person’s health.  The solution lies in the kind of integrated, coordinated care that Fallon has pioneered from its inception.

The burgeoning market for public health plans can be seen in population and enrollment projections.  The state’s older adult population is projected to increase by a third by 2030, according to the US Census Bureau.  Yet, of the older adults eligible for innovative plans like the Program for All-Inclusive Care for the Elderly (PACE) and Senior Care Options (SCO), only 11 and 44 percent, respectively, have enrolled.  Meanwhile, the demand for Medicaid has held steady — and even increased at the national level where Medicaid membership grew by 42 percent between 2003 and 2018.  (Medicaid membership spiked up during COVID as people lost jobs and employer-provided health insurance.)

What’s behind our ability to succeed in the government market?  Integrated, coordinated, and collaborative health care is in our DNA.  Our organization was founded as part of an integrated health care system.  Not only have we worked closely with providers from the beginning, but through our PACE plans we are a provider.  Coordinated care works.  A 2015 study conducted for the state by JEN Associates showed how effective PACE and SCO can be, even with challenged populations.  According to the study, nursing facility residency months declined by 14 percent and the mortality rate dropped by 18 percent under PACE.  The numbers for SCO are similar – a 12 percent drop in nursing facility residency months and a 17 percent decline in mortality.

Our experience with these kinds of plans gives us a unique vantage point.  We see the whole person.  One example: A member of one of our MassHealth ACOs had for years experienced multiple medical and behavioral health issues that were exacerbated by certain social determinants of health, including unstable housing. While she was under the care of highly qualified and skilled clinicians, each, in turn, tended to focus on one aspect of her medical history. Her extensive treatment history indicated numerous emergency room visits and inpatient admissions – but without stable or sustainable outcomes. Working with both the member and her providers to coordinate care, we helped her access community programs that addressed the social issues that had been a barrier to her receiving appropriate care.  While her journey is not yet complete, she has not been readmitted to the hospital and is self-managing the most serious of her health conditions.  So if you ask for our vision – if you ask why we are making the full switch and why we think it will be successful – the answer is her.

Richard P. Burke is the president and CEO of Fallon Health.