CalAIM: Equity Considerations - The 2021-22 Budget

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The 2021-22 Budget:
CalAIM: Equity Considerations
MARCH 2021

    The California Advancing and Innovating                   withdrawn proposal, and analyzes overarching
Medi-Cal (CalAIM) proposal is a far-reaching set              issues related to the proposal. The second post
of reforms to expand, transform, and streamline               in this series analyzes CalAIM financing issues,
Medi-Cal service delivery and financing. This                 including both the Governor’s funding plan for
post—the third in a series assessing different                CalAIM as well as CalAIM’s policy changes related
aspects of the Governor’s proposal—analyzes                   to Medi-Cal financing. The fourth post in this
equity considerations in the CalAIM proposal. The             series will assess how CalAIM could affect the care
first post in this series provides an overview of             provided to seniors and persons with disabilities
CalAIM, including the key changes from last year’s            served by Medi-Cal.

   What Are Health Disparities and Health                     definition, while a widening of such disparities
Equity? Health disparities and health equity                  does the opposite. Coronavirus disease 2019
are concepts that have no universally accepted                (COVID-19) has accentuated health disparities in
definition. As such, this post uses a broad                   California as seen in Figure 1 on the next page
definition of the terms. Health disparities, under            which breaks down differences in life expectancy
this broad definition, exist when a particular                and COVID-19 mortality by select racial or ethnic
population group experiences systematically                   group.
worse health or greater health risks than another                Health Disparities Are Significantly Driven
population group. Population groups can                       by a Variety of Medical and Nonmedical
be categorized in different ways, such as by                  Determinants of Health. The determinants
demographic characteristics such as race and                  of health are the range of personal, social,
gender, geography, socioeconomic status, or other             environmental, and medical factors that influence
factors such as access to housing. Population                 health status. The following bullets distinguish
groups that may experience worse health                       and give a sense of the relative magnitude of the
outcomes can include people of color, low-income              different medical and nonmedical determinants
individuals, and homeless or housing-insecure                 of health as drivers of health status. Figure 8,
individuals. For instance, individuals experiencing           later in this post, breaks out many of the health
homelessness are disproportionately likely to                 determinants we identified in our review of the
develop health conditions such as mental illness,             research and indicates which determinants different
which is associated with comorbidities and higher             CalAIM components are intended to address.
premature death rates. Most often, academic
research measures health disparities in terms of                 •  Medical Determinants. We find that
differences in mortality, though other measures                     differences in access to health care explain
such self-reported health status, diagnosed chronic                 as much as 20 percent of health disparities.
conditions, and disability are sometimes used.                      Notably, these medical determinants of
The narrowing of health disparities corresponds                     health have been found to explain differences
to improvements in health equity, under this broad                  in health disparities even after accounting

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Figure 1                                                                                                 security), health behaviors
                                                                                                         (such as diet and alcohol,
Racial and Ethnic Disparities Exist in Terms of                                                          tobacco, and drug use), and
Life Expectancy and COVID-19 Mortality
                                                                                                         environmental factors (such as
                                                                                                         air or water quality). Nonmedical
           Life Expectancy                               COVID-19 Death Rate
           (Age in Years)a
                                                                                                         determinants of health are
                                                         (Deaths per 100,000 Residents)b
                                                                                                         among the most systematic
   Asian                                                                                                 differences between certain
                                                                                                         population groups, such as racial
                                                                                                         and ethnic groups, and therefore
                                                                                                         explain much of the disparity in
                                                                                                         health outcomes between those
                                                                                                         groups. Accordingly, changes
                                                                                                         to such groups’ nonmedical
           70     75       80        85       90                30     60     90     120     150         circumstances could improve
a 2017 data.                                                                                             their health and, as a result,
b Data is up to date through February 2021.                                                              reduce health disparities.
 Note: There are significant differences in mortality within each racial or ethnic group. For example,
       the Asian category comprises many different ethnic groups and we understand there is
                                                                                                          Medi-Cal Provides Health
       variation among these ethnic groups in terms of life expectancy and COVID-19 death rates.       Care Coverage to Populations
 COVID-19 = coronavirus disease 2019.                                                                  Who Suffer Disparate Health
                                                                                                       Outcomes. Medi-Cal provides
                                                                                                       health care coverage to more
                                                                                                       than one-third of the state’s
    for other nonmedical determinants of
                                                                                   population. In part by covering low-income
    health (which we discuss below). These
                                                                                   individuals and families, Medi-Cal disproportionately
    differences include factors such as health
                                                                                   serves state residents whose socioeconomic
    insurance status and the quality of health
                                                                                   and health characteristics are associated with
    care provided. Research indicates individuals
                                                                                   poor health outcomes. For example, Medi-Cal
    from disadvantaged population groups
                                                                                   disproportionately covers state residents who
    often receive lower-quality care than others
                                                                                   are out of work, disabled, and/or do not have a
    from more advantaged population groups.
                                                                                   college degree. Additionally, people of color are
    For example, some studies suggest the
                                                                                   disproportionately represented in Medi-Cal relative
    existence of systemic disparities in the quality
                                                                                   to the overall population. As Figure 2 on the
    of preventive care different groups receive,
                                                                                   next page shows, Medi-Cal beneficiaries suffer
    leading to more preventable emergency
                                                                                   worse health on a variety of dimensions compared
    department visits. Other research indicates
                                                                                   to other state residents (which largely includes
    that racial bias or deficiencies in cultural
                                                                                   those with other forms of coverage but also the
    competency on the part of some clinicians
    can adversely affect the quality of care they
                                                                                      Health Disparities Exist Within the Population
                                                                                   Served by Medi-Cal. Health disparities are
•  Nonmedical Determinants. Following our
                                                                                   present among Medi-Cal beneficiaries of different
   review of academic literature, we find that the
                                                                                   races or ethnicities. For example, as shown in
   nonmedical determinants of health likely are
                                                                                   Figure 3 on page 4, compared to white Medi-Cal
   responsible for 80 percent or more of health
                                                                                   recipients below age 65, non-senior Black Medi-Cal
   disparities. Nonmedical determinants include
                                                                                   beneficiaries self-report poor or fair health (the two
   social determinants (such as income, housing
                                                                                   worst ratings) at 30 percent higher rates. Hispanics
   status, racism and discrimination, intentional
                                                                                   below age 65 on Medi-Cal, on the other hand,
   and unintentional physical harm, and food

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Figure 2
                                                                                                   can result in premature death.
                                                                                                   Figure 4 on page 5 compares
   Medi-Cal Beneficiaries Suffer Worse Health                                                      the prevalence of major
   Outcomes Than Non-Medi-Cal Beneficiaries                                                        chronic conditions among
                                                                                                   the top 5 percent most costly
                                                      20%                                          beneficiaries compared to
       Poor or fair overall health
                                          10%                                                      Medi-Cal enrollees overall. In
                                                                                                   addition to having low incomes,
                                                                                       40%         which is true for all Medi-Cal
       Poor or fair dental health
                                                      20%                                          enrollees, those who suffer from
                                                                                                   the listed chronic conditions may
                                                                                                   come disproportionately from
           Has no natural teeth                                    Medi-Cal                        particular population groups—
                                                                   Not Medi-Cal                    such as individuals lacking stable
                                                                   (Rest of State Population)
                                                                                                   housing or persons of color. For
   Ever diagnosed with diabetes                                                                    example, Black and Hispanic state
                                                                                                   residents have higher rates of
                                                                                                   diabetes and Black state residents
           Ever diagnosed with
                                                                            34%                    experience homelessness at very
           high blood pressure                                     29%                             disproportionate rates.
                                                                                                                     State Has Attempted to
                                                                 20%                                              Reduce Health Disparities
   Recently experienced serious
         psychological distress                    13%                                                            Through Various Medi-Cal
                                                                                                                  Initiatives. As previously
                                                                                                                  discussed, the Medi-Cal
    Source: California Health Interview Survey, 2018 or 2019 edition depending on the specific measure
             (due to data constraints).                                                                           program serves individuals who
                                                                                                                  disproportionately suffer from
                                                                                                                  a myriad of health conditions
                                                                                                                  and face other circumstances
report poor or fair health at 24 percent lower rates                                                              associated with poor health.
than non-senior white recipients.                                                              Accordingly, changes to the Medi-Cal program
   Health disparities also can be seen by looking                                              that result in improved access to care or quality
at how service needs vary among Medi-Cal                                                       of care have significant potential to reduce
beneficiaries. The top 5 percent most costly                                                   health disparities. In recent years, the state has
beneficiaries, on a per-enrollee basis, utilize over                                           implemented several reforms to the Medi-Cal
30 times as many resources, in dollar terms, as                                                program, which, in concept, have potential to
the least 50 percent costly. This illustrates that a                                           reduce health disparities across the state. These
relatively small number of Medi-Cal beneficiaries                                              reforms included (1) expanding Medi-Cal coverage
have extremely disproportionate needs compared                                                 to additional populations—such as to single adults
to more typical Medi-Cal beneficiaries. Moreover,                                              under the Patient Protection and Affordable Care
the top 5 percent most costly beneficiaries                                                    Act (ACA) optional expansion and to undocumented
disproportionately suffer from certain chronic                                                 immigrants under age 26—and (2) establishing
conditions—including mental illness, diabetes,                                                 programs that focus resources and attention on
hypertension, asthma, and alcohol and drug                                                     the highest-risk, highest-needs beneficiaries,
dependency—compared to Medi-Cal enrollees                                                      often with the intent to prevent the worsening of
overall. Such chronic conditions often are                                                     severe health conditions. (The latter can serve to
accompanied by comorbidities, which significantly                                              address disparities since certain population groups
impair the overall health of beneficiaries and                                                 disproportionately may be high-risk, high-need.)

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Figure 3                                                                                        Twenty-four counties and one city
                                                                                                have opted in to the Whole Person
Self-Reported Health Differs Among                                                              Care program. As of September
Medi-Cal Beneficiaries by Race and Ethnicity                                                    2020, about 86,000 people were
Medi-Cal Beneficiaries Ages 0-64                                                                participating in Whole Person
Overall Self-Reported Health by Race or Ethnicity
                                                                                                •  Health Homes. The Health
                      Poor or Fair     Excellent or Very Good                                   Homes Program, which was
   Asian            18%                                                            55%          implemented in 2018, has similar
                                                                                                goals to the Whole Person
   Black     25%                                                                     57%        Care program and provides
                                                                                                extra services—including care
Hispanic                15%                                                           58%
                                                                                                management—to Medi-Cal
   White           19%                                                             55%          beneficiaries who suffer from
                                                                                                chronic health and/or mental
                                                                                                health conditions that result in
                                                                                                high use of health care services.
Relative Likelihood of Reporting Being in Poor or Fair Health
Compared to White Medi-Cal Beneficiaries                                                        Twelve counties—with managed
                                                                                                care plans arranging and
                                                                                                paying for services within these
                       Asian   -5%                                                              counties—are participating in
                                                                                                the Health Homes Program. As
                               Black                                     30%                    of March 2020, Health Homes
                                                                                                served about 27,000 beneficiaries.
   -24%                                Hispanic
                                                                                                This program also is set to expire
                                                                                                at the end of 2021.
                                                                                                 •  Mental Health Services
 Source: California Health Interview Survey, 2019 edition.
                                                                                                 Act (MHSA) Full-Service
                                                                                                 Partnerships. Approved by voters
Three of these programs include:                                                                 in 2004, MHSA places a 1 percent
                                                                                    tax on incomes over $1 million and dedicates
•  Whole Person Care. The Whole Person Care                                         the vast majority of associated revenues to
   program, which began in 2016, is a set of                                        counties to provide mental health services.
   local pilot programs—typically run by county                                     A substantial portion of the MHSA funding
   health agencies—to coordinate physical                                           counties receive is required to be used on
   health, behavioral health, and social services                                   Full-Service Partnerships, which provide
   for beneficiaries with the highest levels of                                     intensive mental health and wraparound
   need and/or risk. Each local Whole Person                                        services—such as housing, employment
   Care pilot determines target populations—                                        support, and case management—to
   among a predetermined set which includes,                                        individuals with the greatest mental health
   for example, high utilizers of services and                                      needs. Full-Service Partnerships are intended
   homeless individuals—and develops strategies                                     to provide services to populations—identified
   to tailor service delivery to those groups. The                                  by counties—who disproportionately do
   program is funded with a mix of federal and                                      not access mental health care. Counties
   local funds and is set to expire at the end of                                   use a variety of dimensions to identify
   2021. Notably, additional state-only funding                                     these populations, which include (1) racial
   also has been provided to Whole Person                                           or ethnic characteristics, (2) housing
   Care pilots to support housing services.                                         status, or (3) criminal justice involvement.

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Figure 4
                                                                                            Care and/or Health Home
   Certain Chronic Conditions Are Much More Prevelant                                                  Governor Proposed CalAIM
   Among the Most Costly Medi-Cal Beneficiaries
                                                                                                    as Part of the January 2020-21
   Comparison of the 5 Percent Most Cosly and 95 Percent Least Costly
   Medi-Cal Beneficiaries With the Listed Chronic Condition
                                                                                                    Budget Before Withdrawing
                                                                                                    the Proposal in May. CalAIM
                                                                                                    is a large package of reforms
                                                                                                    aimed at (1) reducing health
                                                                                     45%            disparities by focusing attention
   Serious mental health
                            5%                                                                      and resources on Medi-Cal’s
                                                                                                    high-risk, high-need populations;
                                                                                                    (2) rethinking behavioral
            Hypertension                                                                            health service delivery and
                                                                                                    financing, (3) transforming and
                                                                                                    streamlining managed care, and
                                                  21%                                               (4) extending federal funding
                         3%                                                                         opportunities currently available
                                                                                                    under the state’s soon-to-expire
                                                                                                    1115 waiver. Originally proposed
                 Asthma                                Top 5 Percent         Bottom 95 Percent
                                                                                                    in January 2020 as part of the
                                                                                                    2020-21 budget, CalAIM was
                                                                                                    withdrawn at the May Revision
                                  10%                                                               due to the COVID-19 pandemic
        Alcohol and drug
            dependency    1%                                                                        and its estimated effects on
                                                                                                    the state’s fiscal situation. To
                                                                                                    maintain continuity of certain
                                                                                                    Medi-Cal programs such as
  Source: Department of Health Care Services Analysis of 2011 expenditure data.
                                                                                                    Whole Person Care and the
                                                                                                    Dental Transformation Initiative—
                                                                                                    whose federal authorization
      While not an explicit Medi-Cal program,
                                                                                 under the state’s 1115 waiver would have expired
      Full-Service Partnerships provide services
                                                                                 at the end of 2020—the state secured a one-year
      to many individuals eligible for Medi-Cal
                                                                                 extension of the 1115 waiver. With this extension,
      and, accordingly, are often partially
                                                                                 the state’s 1115 waiver is set to expire on
                                                                                 December 31, 2021.
   Figure 5 on the next page shows the counties
that currently are participating in the Whole Person

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Figure 5

Whole Person Care and/or Health Homes Are Available in 26 Counties
All Counties Operate Full-Service Partnerships

                                                                  Whole Person Care

                                                                  Health Homes


                                                              Whole Person Care operated by City of Sacramento.

    Counties that offer Whole Person Care
    and/or Health Homes include roughly
    87 percent of Medi-Cal beneficiaries statewide.

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Governor’s Proposal

Overall Proposal                                               Proposal Elements With Direct Health
   Reintroduces CalAIM in Largely Similar                      Equity Implications
Form to Last Year’s Proposal. The Governor’s                      CalAIM reflects a large suite of proposed reforms
2021-22 budget reintroduces CalAIM. The vast                   that touch nearly every aspect of Medi-Cal. While
majority of proposed CalAIM reforms are essentially            essentially all of CalAIM has potential to improve
unchanged from last year’s proposal except as                  health equity, certain CalAIM components are more
relates to their proposed implementation time line.            directly intended to do so. This section describes
The Governor’s reintroduced proposal emphasizes                the major components of CalAIM that are intended
health equity as an important rationale for pursuing           to directly have such impacts.
CalAIM. For a general overview of CalAIM, see our                 Better Identification of High-Risk, High-Need
budget post, The 2021-22 Budget: CalAIM: The                   Beneficiaries Through Population Health
Overarching Issues.                                            Management Programs. Population health
   CalAIM Reflects One of the Governor’s                       management programs represent a bundle of
Proposals Aimed at Health Equity. The                          administrative activities—typically performed
Governor’s 2021-22 budget includes a number of                 by managed care plans—that aim to (1) identify
proposals that the Governor intends to improve                 beneficiaries’ medical and nonmedical risks
health equity. While many of the new proposals                 and needs and (2) facilitate care coordination
aim to improve reporting on health equity metrics,             and referrals. CalAIM would require all Medi-Cal
others would expand benefits with the goal of more             managed care plans to operate population
directly improving health equity. The major health             health management programs. Managed care
and human services proposals either wholly or                  plans would be required to collect and analyze
partially intended by the administration to address            information on their members’ health status,
health equity include:                                         service utilization history, and social needs. While
                                                               existing data sources would form the basis of
  •  Development of a Health and Human Services
                                                               some of this information, a new standardized,
     Agency-wide health equity dashboard.
                                                               statewide Individual Risk Assessment tool would
  •  An analysis of COVID-19’s health equity
                                                               be developed by the Department of Health Care
                                                               Services (DHCS) to ensure consistent information
  •  Health system-wide equity reporting by the                collection across managed care plans. With this
     proposed Office of Health Care Affordability.             information, managed care plans would assign their
  •  Inclusion of health equity benchmarks among               members into one of four risk categories: “low risk,”
     new standards and requirements that would                 “medium and rising risk,” “high risk,” or “unknown
     be set on all managed care plans operating                risk.” While plans would remain responsible for
     in the state, including those that provide                connecting low-risk members to preventive and
     coverage through Medi-Cal and the state’s                 wellness services, they would be responsible for
     Health Benefit Exchange (Covered California).             providing increasing levels of care coordination
  •  Expanded Medi-Cal coverage of continuous                  and service linkages to their higher-risk members.
     glucose monitoring for beneficiaries with Type            As discussed below, for many of their highest-risk
     I diabetes.                                               members, plans would be required to provide a
  •  Permanent expansion of certain telehealth                 higher level of case management services than
     services under Medi-Cal (which is intended                they currently provide. Currently, at least 17 of the
     to improve access to health care among                    state’s 24 Medi-Cal managed care plans operate
     Medi-Cal beneficiaries).                                  public health management programs generally

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consistent with the population health management                                           how the target population of ECM compares to the
requirements of CalAIM.                                                                    target populations of the Health Homes Program
   Better Coordination of Services Through                                                 and Whole Person Care. ECM would build upon
Enhanced Care Management (ECM). CalAIM                                                     case management strategies developed in these
proposes to create a new statewide managed                                                 other programs that also were designed to focus
care benefit, ECM, to provide intensive case                                               resources and attention on the highest-risk and
management and care coordination for Medi-Cal’s                                            highest-need beneficiaries.
most high-risk and high-need beneficiaries                                                    Provision of Broader Array of Nonmedical
(provided they are enrolled in managed care).                                              Supportive Services Through “in Lieu of
The intent is for ECM to provide much more                                                 Services” (ILOS). CalAIM would authorize
high-touch, community-centered care coordination                                           managed care plans to provide an array of
services than generally are available to the                                               nonmedical services to their members. Under
targeted populations, which include, for example,                                          federal rules, these ILOS generally are nonmedical
high utilizers of emergency departments and                                                services that can be provided as alternatives to
members with unstable housing. The intent is for                                           standard Medicaid benefits in the managed care
ECM to connect high-risk, high-need members                                                delivery system. ILOS are intended to be provided
to the appropriate services necessary for the                                              in place of a more expensive standard Medicaid
improvement of health outcomes. Figure 6 shows                                             benefit. If states opt in to provide ILOS (and receive

 Figure 6

 Comparing Target Populations:
 CalAIM (Enhanced Care Management) Versus Health Homes and Whole Person Care
 CalAIM (Enhanced Care Management)                                      Health Homes Program                              Whole Person Care

 Beneficiaries must be from one of the                     Beneficiaries must have a chronic condition in    Pilots were allowed to choose one or more of
   following categories:                                     at least one of the following categories:         the following populations:
 • Children or youth with complex physical,                • At least two of the following: chronic          • High utilizers of avoidable emergency
   behavioral, developmental, and/or oral                    obstructive pulmonary disease, diabetes,           department, hospitals, or nursing
   health needs.                                             traumatic brain injury, chronic or congestive      facilities—high utilizers.
 • Individuals experiencing homelessness,                    heart failure, coronary artery disease,         • Individuals with two or more chronic
   chronic homelessness, or who are at risk of               chronic liver disease, chronic renal               physical conditions.
   becoming homeless.                                        (kidney) disease, dementia, substance use       • Individuals with severe mental illness and/
 • High utilizers with frequent hospital                     disorders.                                         or substance use disorders.
   admissions, short-term skilled nursing                  • Hypertension and one of the following:          • Individuals experiencing homelessness—
   facility stays, or emergency room visits.                 chronic obstructive pulmonary disease,             homeless.
 • Individuals at risk for institutionalization              diabetes, coronary artery disease, chronic      • Individuals at risk of homelessness.
   who are eligible for long-term care                       or congestive heart failure.
                                                                                                             • Individuals recently released from
   services.                                               • One of the following: major depression             institutions, including jail or prison—justice
 • Nursing facility residents who want to                    disorders, bipolar disorder, psychotic             involved.
   transition to the community.                              disorders (including schizophrenia).
 • Individuals at risk for institutionalization            • Asthma.
   with serious mental illness, or children                Beneficiaries must also meet at least one of
   with serious emotional disturbances or                    the following acuity/complexity criteria:
   substance use disorders with co-occurring
                                                           • Has at least three or more of the
   chronic health conditions.
                                                             HHP-eligible chronic conditions.
 • Individuals transitioning from incarceration
                                                           • At least one inpatient hospital stay in the
   who have significant complex physical
                                                             past year.
   or behavioral health needs requiring
   immediate transition of services to the                 • Three or more emergency department
   community.                                                visits in the last year.
                                                           • Chronic homelessness.
   CalAIM = California Advancing and Innovating Medi-Cal and HHP = Health Homes Program.

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federal funds in respect of them), federal law                                                       care plan demonstrates why provision of the benefit
requires that ILOS be optional for managed care                                                      for an additional time would be cost-effective
plans to provide and beneficiaries to accept. Under                                                  Figure 7 summarizes the proposed list of ILOS
CalAIM, DHCS has proposed a menu of 14 ILOS                                                          benefits in the Governor’s CalAIM proposal.
benefits that managed care plans could choose to                                                        Improved Access to Behavioral Health
provide beginning in January 2022. (Managed care                                                     Services. As was shown earlier in Figure 4, a
plans that elect to offer ILOS benefits could select                                                 higher proportion of Medi-Cal’s highest-need
which specific benefits to provide.) Some of the                                                     beneficiaries suffer from severe behavioral health
proposed ILOS benefits have restrictions on how                                                      conditions. Severe behavioral health conditions
much they can be used or who is eligible for them,                                                   also are associated with worse physical health
including benefits that are only available for use                                                   outcomes, as individuals with severe behavioral
once in a beneficiary’s lifetime unless the managed                                                  health needs often have difficulty navigating their

 Figure 7

 Proposed “In Lieu of Services” Benefits
 Benefit                                                                                                           Description

 Services to Address Homelessness and Housing
 Housing depositsa                                     Funding for one-time services necessary to establish a household, including security deposits to obtain
                                                         a lease, first month’s coverage of utilities, or first and last month’s rent required prior to occupancy.
 Housing transition navigation                         Assistance with obtaining housing. This may include assistance with searching for housing or
  servicesa                                              completing housing applications, as well as developing an individual housing support plan.
 Housing tenancy and sustaining                        Assistance with maintaining stable tenancy once housing is secured. This may include interventions for
  servicesa                                              behaviors that may jeopardize housing, such as late rental payment and services, to develop financial
 Services for Long-Term Well-Being in Home-Like Settings
 Asthma remediationb                                   Physical modifications to a beneficiary’s home to mitigate environmental asthma triggers.
 Day habilitation programs                             Programs provided to assist beneficiaries with developing skills necessary to reside in home-like
                                                         settings, often provided by peer mentor-type caregivers. These programs can include training on use
                                                         of public transportation or preparing meals.
 Environmental accessibility                           Physical adaptations to a home to ensure the health and safety of the beneficiary. These may include
   adaptations                                           ramps and grab bars.
 Meals/medically tailored meals                        Meals delivered to the home that are tailored to meet beneficiaries’ unique dietary needs, including
                                                         following discharge from a hospital.
 Nursing facility transition/diversion to              Services provided to assist beneficiaries transitioning from nursing facility care to community settings,
  assisted living facilitiesc                            or prevent beneficiaries from being admitted to nursing facilities.
 Nursing facility transition to a home                 Services provided to assist beneficiaries transitioning from nursing facility care to home settings in
                                                         which they are responsible for living expenses.
 Personal care and homemaker                           Services provided to assist beneficiaries with daily living activities, such as bathing, dressing,
   servicesd                                             housecleaning, and grocery shopping.
 Recuperative Services
 Recuperative care (medical respite)                   Short-term residential care for beneficiaries who no longer require hospitalization, but still need to
                                                         recover from injury or illness.
 Respite                                               Short-term relief provided to caregivers of beneficiaries who require intermittent temporary supervision.
 Short-term post-hospitalization                       Setting in which beneficiaries can continue receiving care for medical, psychiatric, or substance use
  housinga                                               disorder needs immediately after exiting a hospital.
 Sobering centers                                      Alternative destinations for beneficiaries who are found to be intoxicated and would otherwise be
                                                         transported to an emergency department or jail.
 a   Restricted to use once in a lifetime, unless managed care plan can demonstrate cost-effectiveness of providing a second time.
 b   New benefit introduced this year. Restricted to lifetime maximum amount of $5000, unless beneficiary’s condition changes dramatically.
 c   Includes residential facilities for the elderly and adult residential facilities.
 d   Does not include services already provided in the In-Home Supportive Services program.

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physical health needs. In addition, data indicate               generally are intended to (1) increase capacity to
that there are differences among Medi-Cal                       provide Medi-Cal behavioral health services—for
populations in utilizing behavioral health services,            example, by leveraging additional federal funding
which may reflect disparities in access to care.                for behavioral health services (including residential
For example, Hispanic and Asian and Pacific                     mental health services)—and (2) increase access
Islander beneficiaries utilize Medi-Cal mental health           to Medi-Cal behavioral health care—for example,
services at lower rates than other beneficiary                  by revising medical necessity criteria to make it
groups. CalAIM includes a package of reforms to                 easier for beneficiaries to receive behavioral health
Medi-Cal behavioral health service delivery, which              services.

   This section provides our assessment of the                  could help address housing insecurity, (2) home
potential of CalAIM to reduce health disparities                modifications for beneficiaries with asthma could
and thereby improve health equity. Overall, we find             help address harmful environmental exposure, and
that CalAIM has significant potential to improve                (3) medically tailored meals could help address
health outcomes for the highest-risk, highest-need              unmet diet and nutrition requirements. Managed
Medi-Cal beneficiaries. Improved health outcomes                care plans also would take on a greater role in
could lead to improved health equity insofar as                 addressing nonmedical needs through the new
the improved outcomes are concentrated among                    ECM benefit, by coordinating some nonmedical
certain groups who today disproportionately                     community care and human services for high
experience worse health outcomes. We find this                  utilizers. Figure 8 on the next page provides
likely would be the case under CalAIM, for reasons              examples of how various CalAIM proposals address
that we detail below.                                           particular determinants of health, including both
   While CalAIM has potential to improve health                 medical and nonmedical ones.
equity, we also find that it comes with significant                By Better Connecting Individuals With a
risks, challenges, and limitations. These relate to             Larger Set of Medical and Nonmedical Services,
implementation issues as well as oversight and                  Health Outcomes Could Improve. By providing
evaluation.                                                     a wider array of services and better connecting
                                                                individuals with those services, CalAIM could
WHILE CALAIM COULD IMPROVE                                      improve health outcomes. Specifically, the new
                                                                statewide ECM benefit would require plans to
HEALTH EQUITY…                                                  connect those individuals with higher needs to a
                                                                more comprehensive set of health care and social
CalAIM Would Increase Medi-Cal’s                                support services. Improving access to services
Role in Addressing the Broader                                  affecting determinants of health could improve
Determinants of Health                                          individuals’ outcomes. In addition, the package of
                                                                the behavioral health reforms—generally intended
   CalAIM Includes Initiatives Aimed at
                                                                to increase capacity for services provided and
Addressing an Array of Medical and Nonmedical
                                                                access to care—could improve overall health
Determinants of Health. CalAIM would
                                                                outcomes given that severe behavioral health
significantly expand Medi-Cal’s role in addressing
                                                                conditions are associated with a variety of physical
nonmedical determinants of health outcomes,
                                                                health comorbidities. Additionally, ILOS benefits
primarily by encouraging managed care plans to
                                                                have the potential to improve health outcomes for
offer beneficiaries a range of nonmedical ILOS
                                                                Medi-Cal beneficiaries by providing them access
benefits. For example, (1) housing navigation
                                                                to services that address some of the underlying
services and payments for housing deposits
                                                                nonmedical determinants of their health, like

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Figure 8

 CalAIM Proposals and Determinants of Health They Would Address
 Health Determinanta                     Health Determinant Components                                              Related CalAIM Proposal (Beyond ECM) b

 Medical                           Health insurance coverage                                     Enrollment assistance for individuals transitioning from incarceration.
  (10% to 20%)                     Physical health care                                          Extension of public hospital financing programs.
                                   Behavioral health care                                        Behavioral health reforms.
                                   Dental health care                                            Dental benefit expansion and incentive payments.
 Social circumstances              Education                                                     None.
  (15% to 40%)                     Income                                                        None.
                                   Housing stability                                             Housing and long-term services and supports ILOS.
                                   Race                                                          State oversight of population health management.
                                   Neighborhood safety                                           None.
 Behavior                          Diet and nutrition                                            Medically tailored meals for beneficiaries with unique dietary needs.
  (30% to 50%)                     Smoking                                                       None.
                                   Substance use                                                 Sobering centers ILOS.
                                                                                                 Extension of Drug-Medi-Cal Organized Delivery System.
                                   Level of physical activity                                    None.
 Environment                       Exposure to pollution and contaminants                        Asthma remediation to mitigate environmental asthma triggers.
   (5% to 20%)
 a Percents in parentheses reflect the portion of health disparities explained by the listed determinant. They are listed as ranges due to the differences in academic research findings on the
   impacts of each determinant.
 b ECM has potential to address most determinants and their components through the coordination of Medi-Cal and non-Medi-Cal benefits.

   CalAIM = California Advancing and Innovating Medi-Cal; ECM = enhanced care management; and ILOS = in lieu of services.

housing. The addition of asthma remediation to the                                                   groups that disproportionately suffer poor health
list of ILOS benefits is particularly promising, as it                                               outcomes today. The following bullets describe
would remove triggers from the home environment                                                      several of the ways CalAIM could improve health
that lead to worse health outcomes for Medi-Cal                                                      equity by narrowing disparities between different
beneficiaries with asthma.                                                                           groups.
   Possible Improvements in Health Outcomes
                                                                                                          •  Narrowing Disparities Between Low- and
Likely Would Be Concentrated Among
                                                                                                             High-Income Californians. Medi-Cal
Individuals Who Currently Suffer the Worst
                                                                                                             exclusively serves low-income individuals.
Health Outcomes. Many major CalAIM initiatives—
                                                                                                             As Figure 2, shows, Medi-Cal beneficiaries
including those targeting the nonmedical
                                                                                                             generally suffer worse health outcomes than
determinants of health—are aimed at improving
                                                                                                             non-Medi-Cal beneficiaries. Therefore, if
health outcomes for Medi-Cal’s highest-risk,
                                                                                                             CalAIM is successful in improving the health
highest-need beneficiaries. Many of the intended
                                                                                                             of even a subset of Medi-Cal beneficiaries,
beneficiaries are homeless, have mental illness, are
                                                                                                             the health disparities between low- and
at risk of institutionalization in nursing homes, and/
                                                                                                             high-income state residents could narrow.
or have one or more serious chronic physical health
                                                                                                          •  Narrowing Disparities Between Those
                                                                                                             With and Without Stable Housing. Key
   CalAIM’s Targeting of Medi-Cal’s
                                                                                                             components of CalAIM aim to improve the
Highest-Risk, Highest-Need Beneficiaries Could
                                                                                                             health and other outcomes for individuals
Serve to Reduce Disparities and Improve Health
                                                                                                             experiencing or at risk of homelessness.
Equity. Any improved health outcomes that result
                                                                                                             (Medi-Cal likely is the main source of health
from CalAIM could improve health equity insofar as
                                                                                                             care coverage for state residents who
the improved outcomes are concentrated among
                                                                                                             are homeless.) These include, but are not

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limited to, targeted enrollment of homeless                CalAIM Builds on the Potential
  individuals into ECM, the addition of new                  Promise of Existing Programs
  housing services through ILOS (including
  paying housing deposits and utilities), and                   CalAIM Consolidates and Scales up Health
  medical respite for individuals who no longer              Homes and Whole Person Care. As previously
  need hospital-level care but do not have                   discussed, CalAIM would build upon existing
  a safe place to convalesce. Accordingly, if                programs—Whole Person Care and Health
  successful, CalAIM could improve health                    Homes—that would end once CalAIM is launched.
  outcomes for those without stable housing                  CalAIM does this in a number of ways. First,
  and thereby narrow the disparities between                 by requiring managed care plans to establish
  those without stable housing and those who                 population health management programs and
  are stably housed.                                         provide ECM on a statewide basis, CalAIM would
                                                             expand certain service components of Whole
•  Narrowing Disparities Between Certain
                                                             Person Care and Health Homes to all 58 counties.
   Racial or Ethnic Groups. Certain population
                                                             Second, while ILOS offerings would vary regionally
   groups within Medi-Cal generally have higher
                                                             depending on which ILOS plans elect to provide,
   risks and/or needs. For example, Black
                                                             overall, such services offerings are likely to
   Medi-Cal beneficiaries report worse overall
                                                             expand relative to today under existing programs.
   health and suffer from chronic conditions such
                                                             Third, CalAIM would consolidate Whole Person
   as diabetes at higher rates than other racial or
                                                             Care and Health Homes within a single suite of
   ethnic groups. Moreover, Black state residents
                                                             programs operated or arranged by managed care
   as a whole experience homelessness at
                                                             plans. Because Whole Person Care and Health
   highly elevated rates. Accordingly, if CalAIM
                                                             Homes target overlapping, though not identical,
   is successful in improving health outcomes
                                                             populations, challenges have been reported
   among Medi-Cal’s highest-risk, highest-need
                                                             by program administrators around determining
   beneficiaries, these improvements likely
                                                             which program should serve which populations.
   would be concentrated among individuals
                                                             By consolidating the services offered by these
   from certain racial or ethnic groups, which
                                                             programs under managed care, CalAIM eliminates
   could reduce disparities between such
                                                             this potential fragmentation challenge. The nearby
   groups. In addition, persons of color are
                                                             text box briefly discusses how CalAIM relates to
   disproportionately represented among seniors
                                                             Full-Service Partnerships.
   in the Medi-Cal program compared to seniors
   living in the state as a whole. Many CalAIM                  Evaluations of Existing Programs Reveal
   reforms could improve care for Medi-Cal’s                 Some Promising Results. Evaluations have been
   senior population, which, in turn, could                  carried out of Whole Person Care, Health Homes,
   disproportionately benefit the state’s seniors            and Full-Service Partnerships. These evaluations
   of color.                                                 show significant progress has been made under
                                                             these programs in establishing the infrastructure

   Comparing CalAIM and Full-Service Partnerships
      The approach of California Advancing and Innovating Medi-Cal (CalAIM) is similar to that
   of Full-Service Partnerships in that both provide supportive services (including housing) and
   care coordination to individuals with severe mental illness. While Full-Service Partnerships
   would continue in conjunction with CalAIM, the similarity between the approaches provides the
   Legislature an opportunity to (1) draw lessons from these longstanding Mental Health Services
   Act programs in its deliberations over CalAIM and (2) explore where coordination between CalAIM
   programs and Full-Service Partnerships might improve service delivery and outcomes.

                                      2 0 21-2 2 L AO B u d g e t S e r i e s                                     12
needed to identify and serve high-risk, high-need              assessment, the evaluations do not conclusively
beneficiaries. Infrastructure improvements include             show improved outcomes.
the formation of care coordination and outreach
                                                                  •  Challenges Developing Population Health
teams, the execution of multiagency data-sharing
                                                                     and Service Delivery Infrastructure
agreements, and the establishment of incentive
                                                                     in Programs. While clear progress was
payments to improve local service delivery. In the
                                                                     made under Whole Person Care and
case of Whole Person Care, these infrastructure
                                                                     Health Homes in establishing cross-agency
improvements facilitated the enrollment of over
                                                                     collaboration, data sharing, and program
100,000 program beneficiaries by the third year
                                                                     linkages, challenges also arose. For example,
of implementation (almost half of whom were
                                                                     despite the execution of a new data sharing
experiencing homelessness, a population that can
                                                                     agreement under Whole Person Care, half
be hard to reach and engage in services).
                                                                     of all pilots reported continued difficulties
   Additionally, the evaluations of these existing
                                                                     in obtaining necessary data for successful
programs provide some evidence of improvements
                                                                     program implementation. Additionally, pilots
in clinical care and health outcomes. For
                                                                     commonly reported a lack of available housing
example, Whole Person Care enrollees reported
                                                                     and behavioral health services capacity
improvements in their overall and mental health,
                                                                     constraints as impediments to improving
Health Homes participants visited emergency
                                                                     enrollee outcomes.
departments at a significantly lower rate after one
                                                                  •  Clinical Care and Health Outcome
year of enrollment, and Full-Service Partnership
                                                                     Improvements for Whole Person Care
clients utilized primary health care at higher rates
                                                                     Participants Were Not Systematically
than before they joined the program. (Full-Service
                                                                     Different Than Similarly Situated
Partnership clients also demonstrated lower rates
                                                                     Non-Participants. We previously highlighted
of criminal justice involvement than prior to program
                                                                     several clinical care and health outcome
participation.) However, as we discuss below, these
                                                                     improvements that were found in evaluations
evaluations fall short of conclusively demonstrating
                                                                     of existing pilot programs that CalAIM builds
improved clinical care and health outcomes as a
                                                                     upon or draws inspiration from. In our
result of these programs. Final evaluations of Whole
                                                                     assessment, however, these evaluations fall
Person Care and Health Homes have yet to be
                                                                     short of conclusively demonstrating improved
completed, which we expect will shed additional
                                                                     outcomes as a direct result of the pilot
light on the impacts of these programs.
                                                                     programs. As shown in Figure 9 on the next
                                                                     page, while the interim evaluation of Whole
…THE PROPOSAL FACES SEVERAL                                          Person Care shows certain improvements in
RISKS, CHALLENGES, AND                                               care delivery among program participants,
LIMITATIONS                                                          these improvements do not appear to differ
                                                                     systematically from a comparison group of
                                                                     fairly similarly situated Medi-Cal beneficiaries
Implementation Issues
                                                                     not participating in Whole Person Care.
   CalAIM Builds on Programs Whose Impacts                           This similarity could indicate that the
Are Not Fully Understood. As previously noted,                       improved outcomes reported for program
evaluations of existing programs that major new                      beneficiaries may not be due to the impacts
CalAIM initiatives would build on or otherwise draw                  of the programs but instead due to other
inspiration from do not conclusively demonstrate                     factors, such as the tendency of individuals
the effectiveness of these programs in improving                     experiencing acute health crises to improve
care delivery and health outcomes. The following                     in health following acute episodes (provided
bullets highlight several of the challenges that                     adequate medical care is delivered). Moreover,
existing programs have faced and why, in our                         differences in acute care utilization between
                                                                     Whole Person Care participants prior to their

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Figure 9
                                                                                                                           effectiveness of different
                                                                                                                           approaches in terms of
 Whole Person Care Interim Evaluation Does Not Conclusively                                                                program structure, care
 Demonstrate Improved Acute Care Outcomes                                                                                  coordination, and population
 Acute Care Utilization Per 1,000 Member Months                                                                            targeting and outreach
                                                                                                                           across different participating
      Emergency Department Utilization                                  Inpatient Hospitalizations
                                                                                                                           program administrators.
   180                                                          120
                                                                                                                           We understand that
                                                                                         Program Participants
                                                                100                                                        evaluations of Full-Service
   160                                                                                                                     Partnerships similarly
                     Comparison                                  80                                                        have rarely focused on
   140                                                                         Comparison Group       a                    comparative effectiveness of
                                                                                                                           different approaches across
   120                                                           40                                                        partnership participants.
    Pre-WPC        Pre-WPC       WPC          WPC                Pre-WPC     Pre-WPC         WPC           WPC
      Year 1        Year 2       Year 1      Year 2               Year 1       Year 2       Year 1        Year 2
                                                                                                                           While we understand that
                                                                                                                           different approaches across
                                                                                                                           the state in implementing a
   a Comparison group reflects a large sample of Medi-Cal beneficiaries with similar health and other characteristics as
                                                                                                                           program may be warranted
      Whole Person Care participants but who are not enrolled in Whole Person Care.
                                                                                                                           given differences in local
Note: Pre-WPC Years reflect the two years prior to when a Whole Person Care participant enrolled in the program and a
     comparable time period for the comparison group. WPC Years 1 and 2 reflect the first two years after a program        environments and needs,
     participant joined the program and a comparable time period for the comparison group.
                                                                                                                           we believe different
      WPC = Whole Person Care.
                                                                                                                           programmatic approaches
                                                                                                                           may produce different results.
     enrollment in Whole Person Care and the                                                                               Evaluation of how pilot
     comparison group raise questions about                                                           results      compare given  differences in approach
     whether the two groups are similar enough                                                        could help the Legislature better determine
     to compare for the purpose of judging the                                                        which models of care to expand to additional
     impacts of Whole Person Care. All that said,                                                     localities.
    the evaluations only cover the expiring pilot
                                                                                Based on the above findings related to the
    program’s earliest years of implementation.
                                                                              programs CalAIM would build upon, it is difficult to
    Positive impacts directly related to program
                                                                              definitively expect CalAIM to achieve its intended
    implementation could take longer to arise.
                                                                              outcomes related to improvements in health equity.
    The forthcoming evaluations should cover the
                                                                                 While ECM Target Populations Generally Are
    impacts of the latter years of implementation
                                                                              Reasonable, They May Be Overly Broad for
    and, therefore, fundamentally could change
                                                                              Targeting Those With Greatest Needs. Although
    our understanding of the impacts of these
                                                                              the administration says it intends for ECM to be
                                                                              targeted at the top 1 percent of Medi-Cal utilizers,
•  Comparative Effectiveness of
                                                                              the proposed criteria for ECM eligibility may apply
   Different Approaches Among Program
                                                                              to a much larger share of the overall Medi-Cal
   Administrators Not Evaluated. The
                                                                              population. Some managed care plans have
   Whole Person Care and Health Homes
                                                                              suggested that, as currently written, the proposed
   interim evaluations primarily analyze the
                                                                              eligibility criteria could apply to a significant share
   impacts of the pilot programs from a total
                                                                              of their enrollees. However, as the administration
   statewide perspective, while also highlighting
                                                                              releases further information on CalAIM, it may
   differences in approach among the different
                                                                              continue to clarify the proposed ECM eligibility
   participating program administrators. Per the
                                                                              criteria such that it applies to a narrower group of
   state’s evaluation instructions, however, the
                                                                              current Medi-Cal enrollees.
   evaluations do not focus on the comparative

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Medi-Cal Beneficiaries Not Enrolled in                       benefits. For example, constraints in the local
Managed Care Would Not Be Able to Access                        housing supply in certain communities could make
Certain New CalAIM Benefits. CalAIM’s most                      assisting members in obtaining appropriate housing
significant benefit expansions—ECM and ILOS—are                 a challenge for managed care plans. Notably,
proposed to be available only through managed                   limited housing availability has been among the
care, through which more than 11 million Medi-Cal               most common challenges cited by implementers
beneficiaries receive services. Medi-Cal’s more than            of the Whole Person Care pilots in addressing the
1 million beneficiaries eligible for comprehensive              nonmedical determinants of health.
coverage who receive care through Medi-Cal’s                       Plan Discretion Makes Access to ILOS
fee-for-service delivery system would not be eligible           Benefits Uncertain. Federal law requires the
for these services. Many of these beneficiaries are             state to allow Medi-Cal managed care plans to
members of populations with high needs, such as                 choose whether—and which—ILOS benefits to
elderly and disabled individuals and foster youth,              offer. If managed care plans do not widely opt
who potentially could benefit from the expanded                 to provide ILOS benefits, the availability of these
services and care coordination under CalAIM.                    new services could be more limited in scope than
As part of CalAIM, DHCS intends to develop a                    the state ultimately desires. Furthermore, the
specialized model of care for current and former                degree to which managed care plans would elect
foster children. At this time, however, how this                to offer ILOS benefits would vary from county to
new specialized model of care would allow current               county. As a result, which specific ILOS benefits
and former foster children to avail themselves of               would be available to a Medi-Cal beneficiary
CalAIM’s new managed care benefits is unclear.                  would vary based on where they live in the state
   CalAIM as a Package of Reforms Only Would                    and what managed care plan they are enrolled
Address Certain Drivers of Health Disparities.                  in. In addition, plans may vary in determining
Although CalAIM would address a wide range of                   which beneficiaries receive ILOS benefits. These
underlying determinants of health, there are some               potential inconsistencies in access to ILOS
significant nonmedical drivers of health disparities            benefits could reduce CalAIM’s effectiveness in
that it does not directly address. For example,                 promoting health equity statewide. Therefore, while
while some ILOS benefits would address particular               the proposed ILOS benefits under CalAIM have
nonmedical determinants of health—in particular,                significant potential to reduce health disparities
housing insecurity—they would not directly mitigate             in the Medi-Cal program, these uncertainties in
the negative consequences of other nonmedical                   access to ILOS benefits makes the degree to
determinants, such as unemployment or education                 which this would occur unclear. However, although
level. Similarly, although a healthy diet and regular           ILOS benefits are proposed to be optional for
exercise are two health behaviors that have a                   managed care plans to provide at this time, the
significant impact on health outcomes, the ILOS                 administration has indicated that including these
medically tailored meals benefit is the only one with           new benefits in CalAIM reflects an opportunity to
any direct relationship to these behaviors.                     assess the feasibility of converting some services
   Constraints in Supply Could Limit                            proposed under ILOS into statewide mandatory
Effectiveness of Reforms. Whether the CalAIM                    benefits in the future. To the extent that more
package would be able to effectively reduce health              plans provide these services in the future—either
disparities within Medi-Cal depends, in part, on                voluntarily or as a result of a statewide mandate—
the degree to which managed care plans would be                 disparities in access to these services, and thus
able to take advantage of and expand community                  health disparities in the Medi-Cal program, could be
resources to serve the broader, nonmedical                      further reduced.
needs of their members. Accordingly, limits in the                Strategy for Ensuring Lack of Bias in
availability of community resources could limit the             Population Health Management Program
effectiveness of the CalAIM initiative, as well as              Implementation Deserves Scrutiny. Under the
the time frame for realizing potential health equity            CalAIM’s population health management proposal,

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managed care plans would use algorithms                         determining whether CalAIM is proving successful
to assist in identifying their highest-need,                    in promoting health equity would be difficult.
highest-risk enrollees (in addition to using                    Moreover, CalAIM may provide the state with
traditional identification means such as referrals              new opportunities to track Medi-Cal beneficiary
and self-assessments). Research has shown such                  outcomes, the improvement of which could help set
algorithms sometimes are biased, such that they                 the foundation for future progress on health equity.
systematically refer fewer members of certain racial            As previously discussed, under CalAIM, managed
groups for additional medical care. These biases                care plans would be required to build, improve, and
could inadvertently contribute to existing health               maintain significant infrastructure for the purpose
disparities. As a result, the administration has                of identifying high-risk, high-need beneficiaries and
proposed that managed care plans be required to                 tracking their connection to services. This, in turn,
identify any potential biases in their algorithms and           presents the state with an opportunity to draw
correct for them. However, the administration has               on this data to better track Medi-Cal beneficiary
not yet provided guidance on how managed care                   outcomes and needs, as well as CalAIM’s overall
plans should identify and correct for bias in their             performance in improving health outcomes and
algorithms.                                                     equity. For example, the state potentially could
                                                                track (1) rates of housing instability among
Evaluation and Oversight Issues                                 Medi-Cal beneficiaries; (2) changes in Medi-Cal
   Unclear How Progress in Improving Equity                     beneficiaries’ risk scores; (3) progress in linking
Would Be Measured and Evaluated. By                             high-risk, high-need beneficiaries to services; and
improving health outcomes for many of the state’s               (4) various other beneficiary outcomes and CalAIM
highest-risk, highest-need residents, CalAIM is                 impacts. As yet, however, the administration has
intended to promote health equity. However, to                  not clearly articulated how improved managed
date, the administration has not released a detailed            care plan infrastructure related to population
plan for how CalAIM would be evaluated. Without                 health management would translate into improved
careful and robust monitoring and evaluation,                   statewide performance monitoring through public
                                                                reports and dashboards.

Key Takeaways and Issues For Legislative
   CalAIM Has Potential to Improve Health                       significant social and policy challenges the state
Equity... As mentioned above, health disparities                faces—including many challenges that have
are driven in large part by nonmedical determinants             traditionally been considered beyond the scope
of health. By encouraging managed care plans to                 of health care policy. Due to the scale of these
provide nonmedical services, CalAIM has potential               challenges, whether CalAIM can make a meaningful
to address some of the underlying causes of health              impact on them is unclear. Evaluations of similar
disparities, and thereby promote health equity.                 programs, such as the Health Homes Program and
Additionally, CalAIM would direct more health care              Whole Person Care, have yet to find any conclusive
resources toward the highest-need, highest-risk                 evidence that the major interventions included
beneficiaries. Targeting enrollees who systematically           in CalAIM—such as ECM and ILOS—lead to
face the worst health outcomes also has the                     significant reductions in health disparities.
potential to improve health equity in Medi-Cal.                    Legislature Could Consider Which
  …But Success Is Far From Certain. In                          Nonmedical Determinants Medi-Cal Is Most
addressing the nonmedical determinants of health,               Suited to Address. While CalAIM is intended
CalAIM is intended to mitigate some of the most                 to address several nonmedical determinants of

                                         2 0 21-2 2 L AO B u d g e t S e r i e s                                        16
health, there are other nonmedical determinants                sacrifice the opportunity to draw down additional
of health that it is not positioned to address. For            federal funding for these services.
example, as discussed earlier, overall economic                   Recommend Formulating Specific Equity
well-being and educational status also are key                 Metrics to Ensure CalAIM Is Meeting Equity
nonmedical determinants of health that drive                   Goals. While CalAIM holds promise in improving
disparities in health outcomes among population                health equity, its success is not certain. This
groups. To address these other sources of                      makes monitoring the performance of CalAIM
health disparities, the Legislature might need to              critical. To do so, we recommend that the
pursue distinct policy changes that are better                 Legislature formulate a set of metrics related to
equipped to improve outcomes in these areas.                   the health equity goals of CalAIM and require
In addition, for the nonmedical determinants                   the administration to report on these metrics
of health that CalAIM is intended to address,                  periodically. In addition to including metrics related
whether Medi-Cal is the program best equipped to               to care delivery and utilization, we also would
improve outcomes is unclear. For example, there                encourage inclusion of metrics that more directly
are other state departments that aim to address                indicate beneficiary health outcomes to the fullest
housing issues (a key nonmedical determinant                   extent possible. Figure 10 on the next page lists
of health that CalAIM intends to address). Given               examples of health equity metrics that, should
these considerations, the Legislature may wish to              systems allow, we would recommend be included
consider which nonmedical determinants of health               in periodic public reports or a dashboard related
Medi-Cal is most primed to address, and consider               to CalAIM. (This list is not meant to be exhaustive.)
whether additional resources should be provided                Creation of a CalAIM equity reporting mechanism
to other state programs to address nonmedical                  or dashboard could be considered in concert with
determinants of health statewide. Importantly,                 the Health and Human Services Agency’s effort
without Medi-Cal playing a role, the state would               to create a dashboard tracking health disparities
                                                               beyond Medi-Cal.

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