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North Carolina's innovative Healthy Opportunities Pilot (HOP) program is revolutionizing how the state addresses social drivers of health through Medicaid.
With over 34,000 NC Medicaid members served so far, plus thousands of family and household members benefiting indirectly, the program demonstrates how innovative approaches to healthcare delivery can create positive change at both individual and community levels. Leaders hope the pilot might serve as a model for other states looking to address social drivers of health through their Medicaid programs.
I recently sat down with Dr. Betsey Tilson, North Carolina's State Health Director and Chief Medical Officer for the NC Department of Health and Human Services, to discuss the initiative.
Kim Meymandi: Could you explain what makes the HOP program unique?
Betsey Tilson: HOP is groundbreaking as the nation's first comprehensive program to test and evaluate the impact of providing health related social needs interventions through Medicaid. Through an 1115 waiver, we received federal authorization for up to $650 million in combined federal and state Medicaid funding to operate in three regions through October 2024. What makes this particularly innovative is how we've integrated these services with our Managed Care Prepaid Health Plans, creating a sustainable care management, referral, and payment infrastructure for whole person health, including social services.
KM: What motivated North Carolina to apply for this Medicaid waiver?
BT: The genesis of this program came from our understanding that health is driven by more than just clinical care. In fact, only about 20% of health outcomes are directly impacted by clinical medical care, while 80% of what affects a person’s health happens outside of the exam room. Meanwhile, approximately 90% of spending currently goes to clinical medical care. We recognized that to truly improve health outcomes, we needed to address the fundamental factors affecting people's health.
KM: How did you determine which social factors to focus on?
BT: We identified discrete areas of social needs that significantly impact health, supported by research and data. These include housing, food insecurity, interpersonal violence/toxic stress, and transportation. We prioritized their implementation based on both need and feasibility. Food services were the easiest to implement and most needed, while housing presented more challenges. Interpersonal violence services required careful consideration due to sensitivity and privacy concerns.
We took a thoughtful, phased approach to implementation. Food services launched first in March 2022, followed by housing and transportation services in May 2022, and toxic stress and cross-domain services in June 2022. Interpersonal violence services were added in April 2023. This staged approach allowed us to build capacity and learn as we expanded.
KM: Can you elaborate on how the program actually works?
BT: Network leads were established in the three pilot regions that created a network of human service organizations (HSOs) like churches and food banks that are able to provide the services. Following pilot eligibility approval and service authorization by the Managed Care Plans, referrals are made to the human services organizations on behalf of those in need. The HSOs deliver the services and submit invoices that are reviewed by network leads and then paid by the Managed Care Plans. The delivery of social services is then converted into healthcare claims. We spent the first nine months on capacity building, establishing the infrastructure needed to support this new approach.
What makes this particularly powerful is that we've integrated these services with managed care. This allows us to leverage care management, quality, authorization, financing and payment infrastructures to support the program. In addition, outside of the 1115 waiver authority, we've built in other financial incentives into managed care to create real motivation to invest in social services – for example, allowing payment for social services to be defined as medical care in the medical loss ratio.
KM: Where are the pilots located and how has that affected the way the program has operated
BT: The program is in three regions of the state encompassing 33 of the 100 North Carolina counties. They are predominantly rural counties which often face unique challenges in accessing both healthcare and social services. This has been an incredible opportunity to make investments – both economic and social - in these communities. For instance, in Western North Carolina, the program has leveraged over $30 million in combined public and private investments and supports nearly 300 jobs in the human service sector.
KM: The interim evaluation showed some impressive results. Could you share some of the key findings?
BT: Absolutely. I'm particularly excited about the impact we're seeing. First, we are efficiently delivering services. As of October 31, 2024, we have enrolled 34,160 people; delivered 668,183 services; and 95% of invoices are accepted, paid or in progress.
But what's most encouraging are the health outcomes. Based on data through November 2023, our interim evaluation shows that we are decreasing social needs in the area of food, housing, and transportation. We're seeing significant reductions in emergency department visits – about 6 fewer ED visits per 1,000 member-months. For non-pregnant adults, we observed 2 fewer hospital admissions per 1,000 beneficiaries per month. Perhaps most importantly, we're saving an average of $85 per participant per month in healthcare spending compared to what we would have expected without the program.
Another important finding was that the longer someone stayed in the program, the more their health care costs decreased. We think this is likely due to connecting the person to care management and having more of their whole person needs met.
KM: This is exciting news. I understand you've submitted a request to expand the program?
BT: Yes, we submitted our next 1115 waiver request in October 2023. We are asking for statewide expansion and some adjustments to eligibility factors and services. We are currently in active negotiations with CMS to determine the final approval.
KM: What impact has Medicaid expansion had on the program?
BT: Medicaid expansion has increased the number of people potentially eligible for the pilots, especially because there has been disproportionately high enrollment in Medicaid expansion in our rural areas. This means more people can access these crucial services.
KM: What advice would you give to other states looking to implement similar programs?
BT: Based on our experience as the first and most comprehensive 1115 waiver around health-related social needs, I'd recommend starting with food services, as they're relatively straightforward to implement. While housing is critically important, it's more complex to execute. Similarly, interpersonal violence services are vital but require careful consideration of privacy and security concerns.
Second, we've found that the longer people are enrolled, the better their outcomes. Don't artificially limit service provision.
Most importantly, focus on building strong community connections. Invest in creating an ecosystem that leverages existing community-based organizations. It’s important to recognize the broader economic impact of having healthcare dollars flowing to community-based organizations and how this improves the economic stability of communities.
We're very committed to community-based organization involvement – we've seen how healthcare dollars flowing into communities can improve both health and economic stability. It's not just about health outcomes, it's really about building the health and economic stability of North Carolina.
