Innovative solutions to challenging problems: how the private sector can improve Medicaid

March 29, 2024
Original illustration by Justine Allenette Ross

The siloed nature of the Medicaid system—”If you’ve seen one Medicaid program, you’ve seen one Medicaid program,” industry veterans like to say—makes innovations difficult to scale. There are 56 Medicaid offices across America’s states and territories, and over 90 million people on Medicaid. A program that works for one state may be impossible just across the state’s border. Yet, in spite of the logistical hurdles in both the public and private sector, there are many opportunities for companies and venture capital to help improve the delivery of care to Medicaid beneficiaries. We convened three Medicaid industry experts to explore the role of innovation in Medicaid. 

Our three panelists are:

Allison Hamblin, the president and CEO of the Center for Health Care Strategies, a nonprofit policy resource center devoted to improving outcomes for people enrolled in Medicaid.

Meera Mani, a physician and partner at Town Hall Ventures, an investment firm focused on healthcare solutions for America’s most vulnerable communities. 

Emily Brown, founder of Attane Health, a digital health platform that provides personalized food access and selection, telenutrition services, and educational support to low-income American families with a focus on Medicaid beneficiaries.

Below the trio discuss how we can innovate in Medicaid, some of the barriers, venture’s role in the Medicaid ecosystem, and what’s next. 


What innovation in Medicaid looks like

Allison Hamblin: It’s important to remember that innovation in Medicaid is not just technology-supported solutions. Innovation also comes through innovative use of public policy tools, innovative use of payment approaches, and how we use other tools and strategies to drive maximum impact.

There is tremendous flexibility across each of the 56 states and territories Medicaid serves in terms of how to make the most out of the payment and partnership levers the states have at their disposal to really drive improvements in health outcomes and health equity. This combination of a common set of tools and flexibility around how to use those tools to maximum impact based on regional needs and regional priorities promotes ongoing innovation.

Meera Mani: I wholeheartedly agree: not everything needs to be a venture-backable business and many innovations are simply not. Where we feel most motivated at Town Hall Ventures is when we find an amazing mission-driven founder that has a deep lived experience or knowledge of the issue that they’re trying to solve. 

The other thing is, if I rewind the tape back five years investing in Medicaid innovation was almost a sideshow. On the private sector side there was a lot more focus on innovation in commercial insurance. But we’re now at a moment where there is this first tranche of companies—I think of Cityblock Health, for instance—that have gained real traction and proven that Medicaid innovation and venture capital can coexist and deliver results in the public interest. Now the challenge and the opportunity for us is to really build on that momentum.

Emily Brown: My experience coming to this space has really been driven by that lived experience. I’m actually a former Medicaid beneficiary—and it wasn’t that long ago. I also come through this lens of having started as a nonprofit first. I came across a number of barriers and challenges to scale and impact as a nonprofit. Innovating in the Medicaid space as a venture-backed company really was the way to have impact.

I've met so many other founders just like me who are bringing that lived experience to improve quality in Medicaid. I always tell people wherever there are barriers or challenges, there really are opportunities for innovation. 

Barriers to innovation in the Medicaid ecosystem

Hamblin: To your point Emily, I think for so many years we have lamented how under-resourced this sector is and how under-resourced our safety net providers are. And, Meera, you talked about how this is no longer a sideshow—there is this huge influx of private capital coming in and sending resources towards the mission that we collectively care about. I often find myself in conversations where I’m trying to convince people not to be scared and to recognize that, yes, there are risks to navigate here, but we have to make the most of this moment. 

Brown: We know that Centers for Medicare and Medicaid Services has done a lot of transformative work around health-related social needs recently. Some states have waivers that allow “in lieu of services” and others are not there yet. That policy piece that Allison talked about is really important and continues to be a really important driver to build the evidence for the policy at the state level and federal level. That’s one of the challenges we’re navigating. Just like any emerging market, there are early adopters. We’re going where those early adopters are and building the case and the evidence. We believe others will come along because it will continue to open up doors for companies like Attane Health in the space.

Managed Care Organizations (MCOs) and the states themselves are working to deliver this type of care to a wide range of populations across geographies, which offers its own set of challenges. We use technology to help us with scale and to deliver excellent care. But we have to help our partners understand that it's not just about connecting to a third-party retailer because those retail outlets are not distributed equitably. 

It’s also about translating to the Medicaid partners, who sometimes don't understand all the barriers and challenges themselves to delivering equitable care. We found ourselves, as any early stage company in an emerging market, having to do a lot of education with our partners so that they truly understand where those barriers are, where those challenges are, and why a company like Attane Health can help support them reach the goals and outcomes that they're hoping to achieve.

Hamblin: All of that resonates, Emily. I think one of the barriers on the purchasing side—and state government procurement is a highly regulated environment—is the limited data in new and emerging markets. From a purchasing end, how do you pick the winners and how do you identify who has the model that is worth investing in? At this early stage, the evidence base is more fully developed in some areas than others. So your strategy is wise in terms of focusing on early adopters willing to act.

We have to find the most efficient pathways to change

Mani: I remain an optimist. I come from a place of empathy and respect in terms of how big a load the state and Department of Health and Human Services leaders carry day in and day out. You have to be very thoughtful about big needle movers—you have to bring two ideas, not 22. We have to find the most efficient pathways to change. It requires the discipline to say to a portfolio company “no, I won’t connect you with that state or partner—they’re not ready for it. It’s a conversation that goes nowhere and it’s inefficient and unproductive.”

The idea would be to have a really good understanding of what things are best positioned to take off. My team and I tend to focus very heavily on that and we’ve gotten positive feedback from the people we engage with both at the government level as well as the private sector.

What we’ve learned is that the journey for companies in emerging markets is arduous and full of twists and turns getting contracts in place and lining it up with the waiver programs. It takes a while. But, over time, once you get that scale and once you serve not 10,000 but 50,000 people, then the adoption, in some cases, is surprisingly easy. Because it’s much easier to talk to people and say “been there done that in these two states and here are the outcomes.” The beginning is the hardest part, is what we’ve learned. 

Brown: We’re still very early on in our journey. But I’m really excited because we’ve been able to secure some pretty significant pilots. Obviously I can't name them [laughs]. But one in particular is in a specific state where we’ve been able to work with an MCO to do a value-based arrangement and work with philanthropy to support the evaluation component with this work so we can understand what those measures and metrics should be. I’m really excited about this one in particular because it will be the largest demonstration of food as medicine in this state. 

It’s been a little bit like winding through the forest with these really long sales cycles. But I believe, just like Meera said, it’s about locking down those first two and then it comes quickly.

Mani: There is a set of people that are like, “Listen, when you’ve implemented in two states that’s when I want to talk”—and that’s really helpful. 

Brown: For us, it's really been where we have relationships and also where there are stakeholders who are open for something new. Relationships are great, but there has to be an appetite to be an early adopter—because without that it’s really difficult to make it happen.

Mani: I think it's also just true resilience and a move-heaven-and-earth mindset on both sides: both the strategic entity—whether it’s private or public—and the startup. That level of cannot fail is really critical; it’s foundational. 

We have to constantly be very disciplined—and I’d be the first to admit that we’ve invested in companies where the fundamentals that we're seeking are high growth—on not being growth at all costs, but just really nailing the outcomes and the impact, so that you have legs to stand on as you scale.

Hamblin: Policy alignment is key here and I’ve heard both of you speak to that from your perspectives. We really try to reinforce the message that if you want a state’s attention, the innovation has to be in the sweet spot of the things they are most focused on. It can’t be a nice little thing on the wish list. It has to be in the bullseye: something that the agency, the governor’s office, or the legislature has named as a priority. So targeting efforts of where to focus, how to frame the narrative, and the messaging are so important. 

This is oversimplifying the landscape, but: states have personalities. There are the states that tend to be early adopters, like to be the first one to get the waiver, and who have the leadership and political will to take those kinds of risks and be early movers. But that doesn’t mean that the states that don't fit that profile aren’t potential targets for particular strategies and services. 

We’ve had some interesting experiences lately where we’ve been really surprised in a positive and constructive way about some states that are not on the typical radar of risk taker or early adopter but really want something practical and something concrete. There are a lot of states out there where, so long as you frame your message in a really concrete way of “this is what I have, this is how it fits your need, and this is the very clear pathway from x to y,” we've seen some appetite for those types of solutions in states that aren't always on the a list of of early adoption. Sometimes it’s not as grandiose as an entire waiver, but there are still lanes to move in so long as you’re strategic about it.

The future of innovation in Medicaid

Mani: When you said that, I just started smiling because I'm thinking about the unsung heroes who are so scrappy about deploying the funds that are available to states. Very scrappy, super strategic, and deploy it to make some pretty remarkable improvements in the program—whether it's on the tech infrastructure or new programming. So I couldn't agree more in terms of thinking broadly about innovation and not going to just the usual suspects.

I’m curious to get both of your perspectives on what areas would be most relevant for innovation.

Hamblin: Workforce is such an issue. Solutions that amplify the reach of the existing workforce, but also address workforce expansion is a huge one. From a demographic trend perspective, addressing the needs of older adults is a huge area—that has connections to the workforce issue—but also demands innovations around how to provide home and community-based services. It’s such a pain point both for enrollees and states, and that’s everything from informal caregiving to clinical support.

Brown: For me, obviously we’re building this social determinants of health work, which I believe is going to continue to grow as we imagine healthcare really truly beyond the clinic walls. With behavioral health there’s this national reckoning that we have long not had enough support, and I think there's going to be a lot of innovation and opportunity in that space. And, to piggyback off Allison, the workforce continues to be a challenge for everyone. So thinking through all of the labor issues and opportunities to have a workforce that is more congruent with the population and meets the needs there is also really important.

Mani: That’s a great list, and areas of high interest for us, too. We have portfolio companies involved in workforce solutions and a number of companies taking care of older adults, one of which is exclusively focused on Hispanic seniors. I would add rural health to the list—nowhere is the shortage of workforce more evident than in these rural communities. The amount of inbound I’m getting from health plans saying “do you have a solution for rural access?” is really surprising. The other I would say is specialty care. How do you provide equitable specialty care, particularly in these communities where access is already a challenge?

For me, there has never a better time than now to be building and innovating for underserved communities.There is private capital that’s more willing to deploy into these areas than there has been in the past. There is a silver lining from the pandemic that has really made us revisit some very core assumptions and defaults related to care, including our flexibility in terms of new models of care. And then there is a real recognition that if you don't take care of the needs of half of humanity in America, depending on how you look at it it's a moral crisis or it's a financial crisis—you may be motivated by one or both, but both of those hopefully motivate you to action.

Brown: We were built for Medicaid enrollees by former Medicaid enrollees, so this space gets us excited. I’m an optimist and I believe wholeheartedly that we can solve these problems. I look around and see so many innovators finding solutions that are meeting the needs of the target populations they're focused on—and continue to be encouraged by the level of innovation and adoption. All of our partners are gathered around the table to solve the same problem and what gets me excited every day is knowing that people are willing to collaborate to solve these problems. 

Hamblin: I firmly believe that the most disruptive innovations come from attempts to solve the most challenging problems. Medicaid has the thorniest challenges in terms of the limited resources of a publicly financed program and serving a population that is challenged economically, structurally, institutionally, and by the legacy of racism. Every challenge you name the Medicaid population is facing in a more complex way than commercially insured. So if we can identify solutions that improve outcomes and advance health equity for the Medicaid population the benefits will flow much more broadly than that. 

This conversation has been edited and condensed for clarity.

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