Posted: 08 Jun. 2021 8 min. read

To win and retain Medicaid contracts, health plans should emphasize equity strategies

By Ben Jonash, principal and Olga Karlinskaya, manager, Deloitte Solutions LLP

Many of our health plan clients are looking to expand their footprint in Medicaid, which is creating a new level of competition for contracts. Health plans that can demonstrate a willingness to move the needle on health equity are likely to be most successful, current and former state Medicaid directors tell us.

The need to address the drivers of health (also known as social determinants of health) has been a top issue among Medicaid directors for several years. However, the disproportionate impact that COVID-19 had on low-income Black and Brown communities highlighted the urgent need to improve health equity. While Black Americans make up 12% of the population, they account for more than one-third of deaths related to COVID-19, according to the Centers for Disease Control and Prevention (CDC). Black Americans are more likely to be employed in frontline, essential jobs—and are also more likely burdened with chronic disease—due largely to the drivers of health (e.g., access to quality education, well-paying jobs, healthy food, and safe housing). If infected, the overall mortality rate from COVID-19 is higher for Black Americans due to delays in (or limited access to) testing and treatment.

Health equity has become a top priority for Medicaid decision-makers

As we continue into 2021 and beyond, having a strategy to improve health equity will likely be table stakes for health plans that bid on Medicaid contracts, as well as for health plans that intend to renew existing contracts. State Medicaid directors have told us that they intend to look much more closely at health-equity strategies as they evaluate care models and delivery-system outcomes.

Health plans should try to ensure that their clinical, provider, and member-engagement strategies go beyond reducing costs and improving overall health outcomes for Medicaid members. As health plans address state and federal program requirements, they should also consider highlighting the ways in which they expect to improve health equity—particularly among low-income ethnic and minority populations that have disproportionate rates of obesity/diabetes, substance use disorder (SUD), and high rates of preventable poor pregnancy outcomes. While those three conditions are already priorities for Medicaid, health plans should evaluate these conditions (and all others) through a health-equity lens. In other words, health plans should aim to position themselves as a partner in the effort to improve health equity. This includes collaborating with state Medicaid programs and providers on evaluating and/or defining health-equity metrics, which can be incorporated into program design as key performance indicators.

To be competitive, health plans that develop and deploy health equity strategies should consider the following disease-state specific examples:

  • Obesity and diabetes: Medicaid beneficiaries are diagnosed with type 2 diabetes at a higher rate than the general population, according to the CDC. Within Medicaid, obesity and diabetes are more prevalent in majority Black populations. To enhance health equity, health plans could partner with local park and recreation departments, houses of worship, and local county extension offices to support beneficiaries through education, sponsored exercise courses, or incentives programs that focus on nutrition. Additional opportunity exists for partnering with providers to align incentives (contracting) to support specific patient populations. Members who have a Body Mass Index of above a certain threshold might work with clinical teams on tailored weight-loss plans or lifestyle changes. This has the potential to reinforce capability gaps for the health plan while enhancing patient outcomes that are critical to the Medicaid program.
  • Pregnancy and maternal care: About 45% of all births in the US are covered by Medicaid.1 Studies have found Black women are two to three times more likely to have had a preterm infant if they had experienced discriminatory treatment in seeking housing or in societal interactions.2 Recognizing risk factors tied to the drivers of health (adequate housing, access to healthy food, safe neighborhoods) as early as possible is fundamental to addressing health inequities among pregnant women and new mothers.
  • SUD: In states that have high SUD rates in Medicaid, RFP responses should highlight intervention and treatment-adherence strategies for beneficiaries. These can include community partnerships. For example, health plans that forge partnerships with local courts might help some SUD patients stay out of the criminal justice system or avoid returning to it. Additional opportunities include developing partnerships with foster care, juvenile justice programs, and other state-financed organizations to ensure that children have health coverage—and access to addiction-treatment and behavioral health services—as they enter adulthood. Case in point: A North Carolina-based behavioral health managed care organization recently partnered with county social services departments to launch a child welfare program.3

Health equity should be viewed through a human-centered-design lens

The achieve meaningful results, the products and capabilities that health plans invest in need to be adopted by the populations they serve. One approach is to use human-centered design to identify the core human needs and build solutions to account for them. Human-centered design is a methodology used to develop solutions or solve problems by accounting for the end-user perspective in every step of the process. It involves a blend of research techniques to build deep understanding.

When applying a human-centered design methodology in Medicaid, it is important to account for the clinical needs of the member/patient. It is also critical that health plans understand the drivers of health-related needs (e.g., employment, food, housing), and balance that with the needs of the state Medicaid program. In other words, to foster success in meeting the needs of these various stakeholders, health plans should engage not just with members, but also with states, to ensure these solutions are designed in a way that addresses key state Medicaid objectives. For example, a patient might avoid rehabilitation if the office is in a neighborhood that brings back bad memories. Testing these ideas with experts who can speak to the needs/solutions alignment with state priorities is critical. This ensures that community-based solutions, and clinical products or capabilities are built with the ideal experience in mind so that the desired clinical and cost outcomes are met. 

Acknowledgements: Sima Muller, David Rabinowitz, and Russ Pederson


1.  Medicaid Initiatives to Improve Maternal and Infant Health and Address Racial Disparities, Kaiser Family Foundation, November 10, 2020

2. Vibrant and Healthy Kids: Aligning Science, Practice, and Policy to Advance Health Equity, National Academies Press, July 25, 2019

3.  Cardinal Innovations creates child welfare program for counties, Winston-Salem Journal, December 10, 2020

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