We are down to the wire to meet President Obama’s Christmas deadline for passing healthcare reform legislation. Even as health care reform negotiations continue to move forward amidst intense debate, one small but powerful proposal has endured—the creation of an office focusing exclusively on the needs and services of those eligible for both Medicare and Medicaid.  

Currently named the “Federal Coordinated Health Care Office,” this proposed office would help facilitate a working relationship between officials from Medicare and Medicaid at the federal level and Medicaid offices at the state level to better integrate service delivery and payment mechanisms for dual eligible beneficiaries.

It would ensure that beneficiaries have full access to services they are entitled to and work to repair and streamline the disorganized patchwork of programs and services currently available, but often not accessible, to the most frail and vulnerable seniors. The conception of this office presents real opportunities to coordinate medical care and social services more effectively for low-income seniors living with chronic conditions who need quality, cost-effective care across the continuum.

For too long a chasm has existed between Medicare and Medicaid. Attempts to bridge this gap through various Centers for Medicare & Medicaid Services (CMS) pilot programs and demonstration projects have created some delivery system improvements for low-income seniors.

However, programs produced by these efforts have been slow in getting off the ground, saddled with unrealistic time frames and confounded by whether the feds or the states get “credit” for any savings generated. Given that Medicare bears almost all acute care costs and Medicaid bears nearly all long-term care costs for the dual-eligible population, balancing the ledger of credits and debits becomes a daunting and nearly fruitless task.

The U.S. Supreme Court’s 1999 Olmstead decision ruled that the Americans with Disabilities Act can require states to provide community-based services rather than institutional placements for individuals with disabilities. In the 10 years since this landmark ruling, there is still tremendous variability in the breadth, quality, and accessibility of community-based long-term services and many Americans are not getting the support they need at the community level.

Our current national recession has exposed the fragility of these alternatives to institutional care. Tough times have highlighted how chronically ill, low-income seniors and their caregivers suffer when vital services are eliminated and programs close.  

There is a critical, immediate need to better integrate health and supportive services regardless of whether seniors live in their own homes, assisted living, continuing care retirement communities, special care units, or nursing homes. Too often our flawed delivery system forces seniors to seek care in settings that are the least desirable and/or inappropriate for their needs.

If these mega-funding streams cannot work together, Medicare and Medicaid will continue to bear the fiscal pain of paying for emergency room and hospital visits and increased long-term nursing home placements that can—and should—be avoided.

A new Federal Coordinated Health Care Office, or “office of the duals” as we like to call it, has great potential to transform the healthcare and social service delivery systems by focusing on bridging Medicare and Medicaid regulations and payment streams at the state and federal level.

To be truly effective, this office will need creative, energetic staff with sufficient resources to work within and across the federal and state levels. Most importantly, staff must have clear visibility and specific authority to think and act decisively beyond the current bureaucratic structures of both programs.

Working in full partnership with states, Health & Human Services agencies, aging advocacy organizations, and other stakeholders, this office could provide a home and testing ground to tackle a number of long-standing questions about how Medicare and Medicaid can be better integrated to serve the growing population of adults aged 65 and older.

There are plenty of demographic, fiscal, and operational signs indicating the need for higher quality and more efficient service delivery for dual eligibles. Simply put, we can and must do better for our most vulnerable seniors and their families. We can no longer afford to consider and make changes to Medicare and Medicaid in isolation.

To truly bend the healthcare cost curve, we must focus on delivery system improvements for those who use the whole continuum of care intensively and not just incrementally alter siloed programs from a purely fiscal perspective. The proposed Federal Coordinated Health Care Office can serve as the keystone in this effort.

Bruce Chernof, M.D., FACP, is the president and chief executive officer of The SCAN Foundation, which strives to improve the healthcare and well-being of seniors in California.