The $100,000 Challenge: Harnessing Innovation to Enhance Medicaid Performance

Melissa Buckley, Director, Innovation Fund

May 10, 2017
Melissa Buckley
Melissa Buckley

In a search of private market innovations that improve the way Medicaid health plans serve their members, the California Health Care Foundation (CHCF) Health Innovation Fund is sponsoring a competition that will award $100,000 to support implementation of a pilot project with a nonprofit safety-net plan.

The Health Innovation Fund invests in companies with potential to improve access, quality, and efficiency to bring their solutions to the safety net. So far, we've supported advances in teledermatology, mobile consumer engagement, diabetes care, and asthma screening. Now we're teaming up with the Association for Community Affiliated Plans (ACAP) and Village Capital to launch the ACAP Medicaid Innovation Challenge. The judges will be looking for innovative, emerging companies that enable health plans to make it easier for Medicaid recipients to access needed care and resources.

The Affordable Care Act (ACA) established incentives for value-based care and technologies, inspiring thousands of new digital health companies to spur breakthroughs in health care delivery and payment models that reduce costs, improve patient and provider experiences, and raise the quality of care. While most innovations in health care have focused on private and commercial customers, the nation's largest health program, Medicaid, remains a largely untapped market for entrepreneurs. Innovations within Medicaid (known as Medi-Cal in California) have the potential to benefit millions of Americans who are not now well served by the health care system.

Since the ACA rollout, investors have made big bets on Medicaid. In the law's first four years, more than $15 billion was invested in the government's health care engine for the underserved, according to StartUp Health Insights Reports.

ACAP represents 59 nonprofit safety-net health plans serving more than 17 million Medicaid enrollees — nearly half the Medicaid population in managed care plans. And the Medicaid population is significant: 1 in 5 Americans (and 1 in 3 Californians) is a Medicaid enrollee. Total program spending is more than $530 billion a year. Medicaid covers six times as many people as the private marketplaces created under the ACA. Because the growth in this market has been so robust, digital health companies have been willing to take on risk in their models by guaranteeing results and engaging enrollees who previously did not make full use of their benefits. Because of the range of options and possibilities, investors and entrepreneurs have been drawn to the Medicaid arena.

Medicaid Is a Big Customer for Health Care Services

Medicaid beneficiaries face significant impediments to achieving better health outcomes. Many are grappling with substance use, and difficulties with housing, transportation, and family supports further complicate matters. Moreover, enrollment churn makes it more difficult to improve recipients' health. Our investees are trying a number of approaches to easing these problems.

mPulse Mobile (a CHCF Health Innovation Fund portfolio company) uses text messaging to engage customers through work with health plans and providers. The company recently partnered with partnered with Harvard Medical School to evaluate the impact of their two different approaches to working with Medicaid programs. In one, text messages encourage new enrollees to select primary care providers. In the other, texts engage members to take steps to better manage chronic conditions like asthma and diabetes.

Another CHCF investee, RubiconMD, offers eConsults, an electronic system in which all requests from primary care providers for specialty assistance are reviewed by specialists. By allowing primary care providers to discuss cases with clinicians in more than 100 subspecialty areas, access to specialty care is projected into underserved regions. Another company in the CHCF portfolio, outpatient cardiac monitoring pioneer iRhythm, recently went public with an offering on the New York Stock Exchange. As these companies succeed in their respective markets, patients receive high-quality care, and companies, patients, and the delivery system all win.

In the current, resource-constrained landscape, technology-based solutions that reduce costs will be in demand. Through partnerships with companies eager to improve access and quality within Medicaid programs, we have learned that innovations can help reduce costs, make care delivery more efficient, engage hard-to-reach audiences, and offer preventive care. And that's why we are supporting the ACAP Medicaid Innovation Challenge.

The winner of the competition will pilot its product with an ACAP member plan and receive $100,000 to fund it. Do you know of a company that should apply? Is it yours?

Find out more about the ACAP Medicaid Innovation Challenge. We're taking applications until June 1.