Dan Gorenstein: Jacey Cooper had a big problem to solve.

It was 2010, and she was working for a county hospital in Bakersfield, California.

The hospital had brought her in to help them figure out how to care for more people through its uninsured and low-income patient program.

Jacey Cooper: We needed to expand the program. But getting a budget to do that was going to be a challenge, right?

DG: Jacey knew a lot of the program’s existing costs came from just a handful of the 9,000 patients already in the program.

People who were in and out of the hospital and emergency room, struggling with what should be manageable conditions like diabetes, high blood pressure, hypertension.

JC: Health care is really complicated. They don’t know how to manage the system. So it’s easier to just show up to an emergency department.

DG: Jacey was confronting a problem that had plagued the U.S. health system for decades: about 5% of patients make up about half of all spending.

Over the years, many health care giants have tried to tackle this phenomenon: Kaiser Permanente, UnitedHealthcare.

And back in 2010, Kern Medical Center tapped 27-year-old Jacey Cooper to chase this health care holy grail: better care and lower costs.

Doctors and nurses told Jacey these patients needed someone to help them navigate their care, someone who makes sure they’re eating well, keeping prescriptions straight, making appointments.

JC: Talks to them, builds trust with them, teaches them, coaches them.

DG: Jacey pulled together a team of care managers to do just that in hopes that she could keep people out of the hospital and ER and lower costs enough to cover more people.

Check. Check. And check. 

JC: We took that program from 9,000 people to 18,000. We reduced the overall cost by something around 46%. And ultimately a lot of the savings came from really targeting those high utilizers. 

DG: Jacey had just graduated from University of Southern California a few years back.

She’d had twins while on Medicaid.

She had flirted with becoming a doctor, but Jacey was learning fast how much she loved to dissect problems and connect dots. 

JC: I think that’s when I realized, Oh, I kind of have a knack for this type of stuff. 

DG: And while she didn’t know it then, Jacey had just planted the seeds for some of the most important work she’d do in her career.

Theme music

DG: A decade later, those seeds are taking root in a way she never could’ve imagined. 

At age 39, she’s in charge of California’s Medicaid program, the largest in the country.

And she’s designed the nation’s most ambitious effort to push Medicaid coverage beyond the four walls of traditional health care.

It’s called CalAIM.

Today, California’s multi-billion dollar bet that a stable place to live may be the key to better health.

From the studio at the Leonard Davis Institute at the University of Pennsylvania, I’m Dan Gorenstein. This is Tradeoffs.

*****

DG: After her success in Bakersfield, Jacey landed a top lieutenant post in Sacramento with Medi-Cal — that’s California’s Medicaid program.

In her new, bigger job, Jacey wanted to bring the message of better care management statewide.

That’s what brought her to Rancho Cucamonga on an April morning in 2018, 40 miles east of LA.

JC: This was like the beginning of the journey.

DG: The beginning of what would become CalAIM.

Jacey was sitting in the lobby of the Inland Empire Health Plan, or IEHP, one of the state’s largest Medicaid plans.

She had practiced her 10-minute presentation so much by then, she had it down.

She was excited about one slide in particular.

The image showed dozens of lines, thick ones, thin ones, dotted ones, too. Intersecting, overlapping, red, black and blue.

JC: They mapped one person with chronic homelessness and the amount of systems and people they touched was crazy. It was this huge web.

DG: The slide seemed more like something cooked up by Dr. Seuss than what it was — a map charting the different relationships between one person and their 13 Medi-Cal case managers. 

One for substance use. One for mental health. People for specialists and primary care.

The slide drove home Jacey’s point: People needed more help navigating this crazy, complex system.

JC: Talk about the waste and confusion and frustration, because it’s like, holy cow, how do you do that?

DG: Rancho Cucamonga was one of Jacey’s first stops as she criss-crossed the state making the case to insurance companies and doctors that Medi-Cal had a lot of heavy lifting to do.

Her top priority: change how the program treated its patients with lots of complex medical needs — like that person with 13 case managers.

Jacey made it clear in her 10-minute slideshow that Medi-Cal was too often relying on glorified phone operators to help really sick, overwhelmed people. 

JC: Care management is more around meeting people where they are, in the emergency room, in clinic, at the corner. It was more around a personal way of doing things and seeing how impactful it could be.

DG: After her presentation, she stopped talking.

She opened her government-issued gray laptop to take notes.  

JC: I just wanted to listen to people. I wanted people to break things down for me. I wanted people to show me the best. And I wanted to hear what wasn’t working.

Bradley Gilbert: Having the state come and Jacey in particular was very cool.

DG: Bradley Gilbert was then head of IEHP.

BG: I can’t remember another time they actually came to us to really get some input. 

DG: Bradley and his team were already running a version of Jacey’s better care coordination program. 

But they were doing more than that.

They were also serving people whose health needs had to come second because their social problems got in the way.

People whose lives looked a lot like Lacy McClellan’s.

Lacy McClellan: I want to be able to see my doctor. I need to talk to her about a lot of stuff, but we’re going to be coming off of some heavy drugs.

DG: I met Lacy on a hot sunny day this past August.

The 39-year-old was living in a tent encampment called Heroin Alley near the train tracks in Modesto, California, a 90 minute drive from the Bay Area.

A heroin addiction was just one of Lacey’s health problems.

LM: I have cancerous cells that were forming, and I have thyroid problems. My mental health is really bad. I get mad and angry real fast and easy.

DG: Lacy knows she’s sick. She wants to get better.

But without a safe, stable place to live, taking care of her health feels impossible.

Lacy guesses she’s lived in 40 different places in the last 9 months.

LM: I have to go out and I have to hustle every day. I don’t have electricity And I very rarely have a phone. My phone’s never charged, you know what I mean? So I can’t make a doctor’s appointment. I need a roof over my head so I can get better and do everything I need to do to make myself better.

DG: At the Rancho Cucamonga office that morning in 2018, Bradley told Jacey that to get people healthy and out of the hospital, IEHP needed to stabilize the lives of people like Lacy first.

BG: I think we realized that if you don’t address those issues, you’re not going to be able to get them to where you want them to be or they won’t get where they want to be.

DG: The company ponied up $30 million of their reserves to help the people they insured who were homeless find permanent housing, even paying their rent.

Bradley’s team showed Jacey data on how these programs improved health and lowered costs.

Jacey was like a wonky kid in a health policy candy store.

JC: They would talk about which providers they were working with and why they picked those providers. It wasn’t just this theory. It wasn’t just a presentation or a white paper. They were actually walking me through their process

DG: Jacey had arrived in Rancho Cucamonga with an idea of how she could help people with complex medical needs.

She left with ideas about how she could do that and so much more.

JC: People who have a place to live and thrive and heal are going to have better health outcomes. And sometimes you have to provide additional services to allow them to stay there.

DG: Over two months of meetings, Jacey visited nearly two dozen counties, hospitals and health insurance plans all across the state.

At each stop, she learned about more interventions, adding ideas to her growing list.

By May, her listening tour was over and she dragged that government-issued gray laptop back to her team in Sacramento.

JC: I came back after it and I had hundreds of pages of notes and they said, “Well, what’s next?” And I said, “Give me a hot second.”

DG: Maybe a few hot seconds. 

JC: Over a 10-month period, that was all I did. I would spend literally my whole day talking to people internally, all the subject matter experts get them in a room and just brainstorm.   

DG: Jacey read literature reviews.

She talked with colleagues around the country.

She lived in front of her 20 ft. by 5 ft. whiteboard, mapping ideas out, trying to make it all fit.

JC: I would take pictures because I was always really scared that at night someone would come and erase my whiteboard. I probably had 40 pictures of whiteboards just in case someone got excited and felt like it needed to be cleaned in the middle of the night.

DG: In one picture, alongside risk profiles and lists of support services, a small dry-erase note.

JC: It says, “I love you, Mom.” 

DG: Jacey crammed a lot into CalAIM: expanded dental benefits, new ways of treating addiction, better patient data-sharing.

But getting the federal government to pay for the kinds of services IEHP was offering its homeless population was keeping Jacey locked in her office.

JC: Here are all these things that are actually working for people that we haven’t been able to find solutions for historically or we haven’t paid for them. How do I find a way to pay for that? Because once you can pay for something, once you finance it and once there’s sustainability, then it can grow.

DG: Medi-Cal is a joint state and federally-funded low-income health insurance program.

So there were hard lines Jacey could not cross. like using federal dollars to pay someone’s rent — that was forbidden.

But there was something Jacey could do.

Back in 2016, the Obama administration made a significant regulatory change giving Medicaid insurance companies new power. 

JC: It was just like this little nugget in there.

DG: Federal health officials dubbed this little nugget “in lieu of services.”

Yes, a name only a technocrat could love.

But it opened a door for Jacey that had been closed to the pioneers who had the same dream of addressing a patient’s social problems.  

And Jacey ran through it. 

JC: It just seemed like this huge opportunity at the time to use the in lieu of services authority in the federal regs to cover all these amazing things that were being done.

DG: For the first time, state Medicaid programs — at scale — could reimburse insurers for things that were closer to social services, things that could potentially prevent health problems down the road. 

Treating mold in an asthmatic’s apartment, or covering the cost of meals for someone with diabetes.

In lieu of services seemed like the key to unlock Medi-Cal — so it could do more to address social problems. 

To be approved by the feds, a new service had to have a clear connection to someone’s health and data showing it was a good use of money and improved care.

JC: I think we met for two months, maybe three months, multiple times a week with the same group of people in a room and just hammered one out after another of really, really long days.

DG: Some things easily made the list, like paying to help transition people from nursing homes into the community.

But others fell short.

One popular pilot she’d learned about was what some call “community paramedics.”

JC: That was a big one people were pushing for.

DG: Instead of an ambulance automatically taking someone to the ER, community paramedics would take them to a place where they could sober up or get counseling.

JC: There needed to be more places to divert the care from the emergency room across the state of California in order for that investment to be successful. We weren’t there yet. Ultimately removed from the list.

DG: By mid-2019, 14 services — Jacey called them community supports — made the list. 

Almost all of them were related to housing.

Either helping someone find an apartment — paying security deposits, turning on utilities — or keeping people in their homes: widening doorways for a wheelchair, screwing in bathroom grab bars.  

As Jacey stared at her whiteboards and looked at the evidence, she realized at its core, this new program stabilized people’s lives, and the best way to do that was with housing.

JC: By allowing someone to get housed, they can start thinking about how they’re going to address some of the other things in their life. 

DG: Jacey paired this “stability” principle with the work she’d done in her ’20s in Bakersfield that had started her on this whole journey.

This was the multibillion dollar bet she wanted California to make: People with more stable housing, paired with a health care guide, would lead healthier lives, go to the hospital less and save the government money.

Jacey spent 2020 and 2021 convincing state and federal officials to sign off on CalAIM.

A few days after Christmas 2021, the federal Centers for Medicare and Medicaid Services gave CalAIM the final thumbs up.

JC: I was elated. You have no idea. It was a very hard, long negotiation. I’m not going to lie. There were moments where I did not know if we would get across the finish line. I came home and my husband opened a bottle of champagne, and of course, I wrote CalAIM on that cork and I will keep it for a very long time.

DG: Jacey Cooper had gotten the green light to move forward with the most ambitious test of Medicaid’s ability to improve people’s health by meeting their social needs. 

Now, with the eyes of the Medicaid world on her, she had to make it work.

When we come back, CalAIM goes live. 

MIDROLL

DG: Welcome back.

CalAIM officially launched on January 1, 2022.

And in just its first nine months, it’s already changing lives.

Dale Stout: I’m sorry, Laurie, are we interrupting?

DG: Dale Stout leads us through the Illumination Foundation in Riverside, 50 miles east of LA.

He’s like a proud mayor showing off his hometown.

A hitch in his gait, the 50-year old walks us down a narrow hallway, popping into every room with a big smile that’s returned by whomever he greets.

DS: This is Tina. 

DG: Illumination Foundation is a nonprofit that runs medical respite facilities across Southern California, places homeless people can go to recover after leaving the hospital and then, it’s hoped, get connected to permanent housing.

Medical respite is one of the 14 so-called community supports Jacey Cooper included in CalAIM. 

Dale came to Illumination Foundation in February 2022 at one of the lowest points in his life.

DS: I can truly say I’m one of those people that actually did lose everything.

DG: Dale had run a construction company, been an EMT, and later moved in to care for his aging mom.

As her health got worse, so did his drinking.

His mother had a stroke. One week later so did Dale, both landing in the hospital.

DS: I was there for 17 days. I remember seven.

DG: Once admitted, a staph infection almost cost Dale his left arm.

His doctors diagnosed him with brain damage from repeated seizures.

On top of all that, his mom, who died in May, had debts.

DS: Found out that the bank took our house, I lost my car and my business. It came down like a ton of bricks.

DG: Dale slowly began to heal, and a doctor started talking about discharging him, but, Dale asked, to where?

DS: I was worried. Where was I gonna go? I was pretty scared. 

DG: That’s when CalAIM swooped in.

A hospital social worker promised Dale he wouldn’t end up in a shelter, referring him to Illumination Foundation.

His Medi-Cal insurer — Inland Empire Health Plan — would pay for him to stay there for at least 30 days, time to keep healing and try to find a new home.

DS: If they hadn’t stepped in and taken me, I would have been on the streets. I would’ve went right back to drinking. I’d be dead.

DG: Instead, Illumination Foundation helped Dale make his appointments: neurologist, cardiologist, substance use, physical therapy.

DG: When I got here, I couldn’t do nothing with this side, my whole right side. I couldn’t do nothing. I was hanging on the walls. 

DG: Illumination Foundation matched Dale with someone to help look for housing, another new service paid for by CalAIM.

DS: I was there knocking at his door every day, limping to his door. Just let me get there. I gotta find out what I gotta do.

DG: Staff helped Dale get his Social Security card, ID and birth certificate — things he’d need to find a new place.

When his time there was almost up, CalAIM threw him another lifeline.

DS: I get a one time six month extension.

DG: Short term housing after hospitalization is another one of CalAIM’s services. 

Six more months of housing paid for by the health plan, reimbursed by state and federal Medicaid dollars.

In many ways, Dale is a poster child for CalAIM when it really works.

Because Medi-Cal is paying for him to have a place to stay, he’s been able to relearn how to walk, stay sober and schedule brain surgery.

He’s become a leader in his new community, someone residents turn to and staff can rely on.

DS: I’ve had a lot of stuff I’ve been through in my life, but this year, it’s tested my faith, and I know it’s making me stronger. And here I am. I’m actually a walking miracle. And I owe this, I owe Illumination Foundation. If it wasn’t for them, I’d be on the streets. I know I would.

DG: Across the state, CalAIM is helping people like Dale stabilize their lives under the assumption that it will lead to them taking better care of their health.

In the first six months of 2022, more than 81,000 Californians have received what’s called enhanced care management,  a new benefit to help them navigate their complex medical and social needs, the culmination of Jacey Cooper’s original idea.

And while managed care plans can choose which, if any, of the 14 new, more “social” services to offer, all 24 plans in the state covered at least two as of July 1.

Medi-Cal says 3,800 people including Dale, have gotten help finding a place to live, and 5,900 have gotten assistance staying in their home.

But Jacey Cooper understands how those numbers compare to the need. 

JC: We have 161-ish thousand homeless people in California.

DG: We met a few dozen of those people when we visited California this summer, a sharp reminder of the depth of just some of the problems CalAIM is facing.

A woman refuses to see the doctor, afraid someone will steal her van and six dogs.

Woman: I won’t go unless I’m screaming in agony, and it takes a lot for that to happen.

DG: Another man’s leg wound was on the verge of gangrene, his prescriptions wrapped in a t-shirt on a picnic table.

Man: I got a lot of grandkids. And I got some beautiful kids, man. And I don’t go around them because I’m this way, you know?

DG: A syphilis outbreak raging through another camp along the river. 

Outreach worker: We were just trying to really talk them into going in and getting treatment. So she said she was gonna try to get to the hospital today, so hope they go.

DG: Whether people lived under bridges, next to railroad tracks or on the side of the road, there was always a sense of desperation, uncertainty and danger. 

The idea that health insurers, nurses, doctors and case workers could do much to help seemed naive.

CalAIM is audacious, and its boldness raises questions about whether Medi-Cal can pull this off.

Some of those questions are simply aimed at the program’s mechanics. 

Will the program find enough social service providers to offer these new services?

Can those providers adapt to the bureaucratic, administrative burdens of Medicaid?

Will doctors, nurses and social workers even know about CalAIM to refer patients?

Patient advocate Anthony Wright likes CalAIM.

But he wonders whether the insurers — the managed care plans — have the capacity to deliver.

Anthony Wright: Those health plans do not have the best track record, even with providing some of the basic core health care services, childhood vaccinations, providing access to the primary care and specialists that patients need.

DG: Anthony runs the advocacy group Health Access California, a job he’s had for 20 years.

AW: Too much of the history of our health system has been a game of hot potato. Of health plans and even providers trying to avoid the sickest, most complex cases and dump it on others in the health care system.

DG: It’s taking time for the plans to figure this out, and the state is watching.

Jacey says some plans, for example, have asked for too much documentation from patients, delaying approval for urgent services.

So the state has started mandating quicker approvals in those cases.

DG: Other CalAIM onlookers wonder if the program is trying to solve problems that sit too far outside the four walls of the health care system. 

Paula Lantz: It’s not a public health insurance plan’s job to deal with the housing affordability crisis in California, the transportation problems in California, the climate change.

DG: University of Michigan professor Paula Lantz has spent decades studying attempts by Medicaid to improve health by addressing patients’ social needs.

PL: The housing crisis in California, it’s huge. So what can Medicaid do about it? I don’t think a lot.

DG: Case in point, Dale Stout.

After his CalAIM-funded 6-month extension, Dale must leave Illumination Foundation.

DS: My six months is up December 4. I’m terrified. Terrified.

DG: Dale’s case worker helped him send in multiple applications for government housing vouchers.

But when we visited in August, he was still waiting to hear back.

DS: I want to lash out sometimes. Where the fuck is my housing, dude? I’ve done everything you fucking ask me to do twice with a bow on top. What else, what the fuck you want from me?

DG: Jacey says Dale’s story is unfortunately a common one in the early days of CalAIM.

And it underscores some of the program’s limitations.  

Jacey doesn’t have power to hand out vouchers, build affordable housing, or even pay for someone’s rent. 

JC: It is hard when you have certain parts of the puzzle kind of really working, and then you hit a limitation that you don’t fund.

DG: Jacey points out the state has tapped several state agencies, including Medi-Cal, to address its homelessness criss. 

Jacey’s pushing what her agency can do, creating a $1.3 billion program to pay plans if they work with housing agencies to find their patients permanent housing.

But in some way, a $1 billion incentive fund captures the power and the impotence of CalAIM’s influence on housing. A billion dollars is a bunch of money, but it can only be spent on the edges of what the program is hoping to do. 

For researcher Paula Lantz, it raises a final set of questions: What does success for this bold new program actually look like?

PL: Policymakers, people who allocate resources, including a lot of people within the health care delivery system, think that this is the magic bullet and we’re going to throw all this money. What happens when it doesn’t work? 

DG: California state officials, including the governor and Jacey Cooper are on record that CalAIM will improve health and lower costs.

Paula has her doubts. 

Some studies have shown that getting people housed and providing them with supportive services saves money in the long run.

But while Paula’s rooting for CalAIM,  the 2019 literature review she co-wrote found that connecting complex patients to social services rarely improved outcomes or lowered costs compared to similar patients who received traditional medical care.

PL: These kinds of interventions are often oversold to get the political buy-in and to get the resources by saying they’re going to be cost neutral, they’re going to actually end up being cost saving. My biggest worry is that there could be very positive impacts of what they’re doing that don’t show up in a bottom line. And then it just makes people not even want to invest in it any further.

DG: Jacey knows the literature as well as anyone. 

She remains confident CalAIM will save money because so many of these services did just that as local level pilots.

Her department estimates that if ER, hospitalization and long-term care use drops by 3.3% by 2026 that would offset the costs of these new services designed to stabilize people’s lives.

Jacey says even if CalAIM falls short of saving money, the program’s ultimate success will be measured by what it does for Californians.

JC: We should be prudent with taxpayers’ dollars. But if people’s health outcomes are improving, if people are getting access to the appropriate services they need. I think overall that is success. That is what we are trying to do.

DG: All Medicaid eyes are on CalAIM.

The onus is on the state to conduct a rigorous, independent analysis of the program.

That’s essential with so many health officials wondering if CalAIM could be replicated in their states. 

Jacey knows this work will be slow, it will be hard, and that’s ok.

JC: That’s never really scared me in my career for whatever reason. I always know it will be probably a little messy at some point. And at some point it gets unmessy, right? And you can move forward or you pivot and you correct pretty quick. 

DG: She smiles when she thinks about the challenges ahead.

Through the messiness, she tries to focus on the people she’s trying to help.

People like Lacy McClellan, who has not returned follow-up calls from the doctor who visited her in Heroin Alley in Modesto.

And people like Dale Stout, who after months of waiting, is finally in line to get a housing voucher this fall, one step closer to his own place.

JC: I think it’s just increasing the bar of what we should be doing, what our society should be doing. And so it’s a huge opportunity. And I hope that we meet the moment.

DG: After long days, Jacey thinks of a quote she read back when this work all started, about how the best experiences come when we do something that matters, do it well and do it in service of a cause larger than ourselves.

That is why Jacey is in this job.

I’m Dan Gorenstein, this is Tradeoffs.