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Using Shared Savings to Foster Coordinated Care for Dual Eligibles

The Issue

There are 9.2 million people who are dually eligible for Medicare and Medicaid, accounting for 29 percent and 39 percent of program spending, respectively. Most have multiple chronic conditions, a severe mental disorder, functional limitations, or cognitive impairments. New policy initiatives seek to integrate and coordinate care for this vulnerable population, with hopes that costs will fall and care quality will improve.  

What the Study Found

Policymakers have proposed moving away from fee-for-service arrangements by enrolling dually eligible people into state-designed coordinated care entities (CCEs) that would help manage and coordinate care using a global budget. In a CCE, the federal and state governments, and the CCE itself would share in any financial gains from coordinating care.

To help promote self-determination among patients and to encourage them to sign up for such plans, the author of this Commonwealth Fund–supported article recommends that patients also participate in the shared-savings arrangement. Under this approach, a share of the expected savings could be set aside into an account for each dually eligible person enrolled in a CCE. The funds could be directed by the patient to purchase supplemental services and supports, like transportation, home modifications, and personal assistance. Such an approach is already used in the Medicaid "cash and counseling" program, which allows consumers to purchase services and supports, with the supervision of a financial intermediary.


"It is important to advance program designs that have the potential to improve care and save money, but we need to do so in a way that promotes self-determination and the exercise of real options," the author writes.

Publication Details



R. G. Frank, "Using Shared Savings to Foster Coordinated Care for Dual Eligibles," New England Journal of Medicine, published online Jan. 2, 2013.