Minn., health providers aim to cut costs

Gov. Mark Dayton's administration says a program designed to increase quality for 100,000 Medicaid patients will also save the state $90 million over the next three years.

The program is a part of a federal demonstration project between the state and six Minnesota health care providers. Human Services Commissioner Lucinda Jesson said under this project, providers who keep patients healthy share in any savings. If patients require unnecessary care, providers are on the hook for that as well.

"We've designed this to where the shared savings and the shared risk will be large enough that it will be worthwhile financially as well as on a matter of quality care for providers to make this work," Jesson said.

Traditionally, providers are paid based on the number of procedures they perform. Some experts argue that provides little financial incentive to prevent costly complications or emergency room visits.

Major health care providers taking part in the program include: Children's Hospitals and Clinics of Minnesota, Essentia Health, North Memorial Health Care and the Northwest Metro Alliance.