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Governor Plans to Overhaul the State's Healthcare System

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On Wednesday Governor Pat Quinn released the draft of five-year plan for one of the most innovative and far-reaching healthcare transformation programs in the country.

The “The Path to Transformation” proposal would allow the state to obtain $5.2 billion in federal funds over five years to modernize healthcare infrastructure and services and lower long-term costs. The plan, which requires federal approval, is part of Quinn’s agenda to improve the health of the people of Illinois and increase access to quality, affordable healthcare.

“Illinois has made tremendous progress in recent years reforming and improving our healthcare system to control costs and deliver better quality care,” Quinn said. “This plan will help take our healthcare system to the next level – improving the health of people and communities across Illinois while significantly lowering our long-term costs.”

The proposal – known as a federal 1115 waiver demonstration project – is one of the key recommendations of the state’s Alliance for Health, a state-led group of health policy leaders, providers, insurers and other stakeholders that was convened by the governor’s office last year. Through the project, the state is requesting federal matching funds for approximately $1 billion annually for five years for services that are currently funded solely through state resources. By investing these matching funds in improving the delivery system, especially for people with special needs, the plan will lower costs over the long run for both the state and federal governments.

The plan will also support Quinn’s recently announced Birth to Five Initiative by providing support for parents through a home visit program keyed to the early months of a child’s life.

The state has posted a draft of the plan, which was crafted through a process that included extensive consultations with healthcare advocates and leaders of the healthcare delivery system. Public hearings on the draft are scheduled for Feb. 14 and Feb. 20 (see below for details on the hearings). The state plans to formally submit the proposal on March 12.

The proposal would build on and accelerate Quinn’s Rebalancing Initiative, under which the state is making it possible for people with disabilities and mental health challenges to receive the care they need in their own homes and communities instead of institutions. Federal approval of the waiver will allow the state to consolidate nine separate existing programs that serve populations with special needs and are run by various state agencies.

The Path to Transformation will give the state the flexibility to manage the programs more efficiently so that they achieve the triple aim of reducing costs, improving healthcare outcomes and giving people more and better options for care in their own communities.

The plan is organized around four pathways to health: transformation and modernization of the delivery system to create patient-centered health homes; improving the overall health of the population through a focus on prevention, primary care and wellness; building a 21st Century healthcare workforce; and rebuilding and expanding the state’s home and community-based infrastructure, especially for those with complex health and behavioral health needs.

The Path to Transformation Plan has won praise from healthcare advocates and providers who have been closely consulted during its formulation.

“The Illinois Hospital Association appreciates Quinn’s leadership on the 1115 Medicaid Waiver, and we support the general direction of the waiver to bring in critically needed federal funding to transform the Medicaid program to ensure effective, coordinated care for the most vulnerable citizens of Illinois,” IHA President and CEO Maryjane Wurth said. “We look forward to working with the Governor and his Administration, as well as the General Assembly, as the state moves forward with submitting the waiver application to the federal government.”

“This 1115 Waiver application gives Illinois the best opportunity it has ever had to address the root causes of ill health,” Health and Medicine Policy Research Group Executive Director Margie Schaps said. “This will empower Illinois to weave a system of care that prevents people from falling through the cracks, that supports people who wish to remain in their homes and communities rather than institutions, and it will also bend the rising curve of healthcare costs.”

“The Path to Transformation plan is an opportunity for the state to garner federal funds to make badly needed investments in the community behavioral health and supportive housing infrastructure,” said Mark Ishaug, CEO of Thresholds, a major mental health provider and advocacy group. “We are confident the waiver will result in improved health outcomes and reduced Medicaid costs over the long run.”

“The inclusion of home visiting in the waiver plan will be a critical piece of Quinn’s Birth to Five Initiative,” Voices for Illinois Children President Gaylord Gieseke said. “All the research shows that outreach to families at this crucial time in a child’s development has a significant positive impact on the child’s overall health as well as their social and emotional development.”

The waiver application is being led by the state’s Office of Health Innovation and Transformation on behalf of several state agencies, including the Illinois Department of Healthcare and Family Services, the Illinois Department of Human Services, the Illinois Department of Public Health, the Illinois Department of Children and Family Services and the Illinois Department on Aging.

“We know that we can achieve better healthcare outcomes and lower costs when people live in healthy, safe communities with access to high quality healthcare delivery systems in which provider teams work with patients to achieve a state of physical, mental and emotional well-being,” said Michael Gelder, a senior health policy adviser to Quinn. “On behalf of Gov. Quinn, I would like thank the many stakeholders who have contributed their time and expertise to helping us draft this proposal.”

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