Strategy 1
Proving Value: Lead with Your Data and Demonstrate Return on Investment (ROI)
In the face of significant federal Medicaid funding cuts and requirements to comply with new federal mandates, MCOs and state agencies are intensely focused on securing maximum cost-effectiveness. Anecdotal evidence of success is no longer sufficient; MCOs prefer and often require measurable data that demonstrates the value of a product or partnership. Therefore, the core rationale for SSOs/CBOs is demonstrating a quantitative Return on Investment (ROI)—proving that their upstream, community-based interventions reduce expensive downstream utilization and improve the quality metrics that directly influence MCO payments.
Research has consistently shown that interventions focusing on non-medical factors—such as coordination and supports—yield a positive ROI for healthcare entities.14, 15, 16 For instance, a literature review of Medicaid HRSN interventions found average positive ROIs of 85% for food interventions.17 SSOs and CBOs must frame their services not just as a social good, but as a solution for managing financial risk, achieving cost containment goals and improving health outcomes.
Case Studies in Action: LSA Members in Wisconsin Leveraging Data to Further Partnerships
The experiences of Aurora Family Services (AFS)18 in Milwaukee, Wisconsin illustrate the power of ROI data. AFS, which served over 12,400 Medicaid families in 2024, participated in a state Medicaid-supported Intensive Care Coordination pilot program from 2022 to 2024 designed to reduce inappropriate use of EDs by high-utilizing patients. AFS placed social workers in three local EDs to identify patients with five or more visits in six months, conducted social needs screenings (addressing common needs like transportation and food insecurity), and provided intensive post-discharge follow-up, ensuring participants accessed necessary community resources and primary care. The payment structure underscored the need for measurable value: AFS received 25% of all cost savings generated by the program, including those associated with reduced ED utilization.19
A key finding was that intensive care coordination, which emphasizes a collaborative, culturally-sensitive intervention with a single point of contact, produces direct cost reductions.20 Initial data from AFS’s site demonstrated a 60% reduction in ED visits overall from their provider site, contributing to overall cost savings generated by the program.21 Based on this success, AFS plans to expand its care coordination services in Wisconsin to the maternal health field, aligning with the state’s new Maternal Health Strategic Plan. This documented reduction in high-cost utilization serves as a powerful model demonstrating a tangible return on investment to state Medicaid agencies and Medicaid MCOs looking for partnerships to lower cost of care and improve quality metrics.
Meanwhile, Lutheran Social Services of Wisconsin and Upper Michigan (LSS WI),22 through its Healthcare Partnership (HCP), saw similar success leveraging data in the state. Piloted in cooperation with the MCO Chorus Community Health Plans, HCP is an intensive care management program for Medicaid beneficiaries with high-cost behavioral health needs. LSS WI and Chorus agreed to equally share financial risk for beneficiaries during the first year of the HCP pilot. Results from that first year provided undeniable evidence of the value of SSO/CBO and MCO partnership: the program achieved an 18.8% decrease in costly healthcare claims, a 7.7% decrease in inpatient admissions, and a 16.7% decrease in 30-day readmissions among participating patients.23 Further, HCP outperformed the state Medicaid program in quality measurements including follow-up after hospitalization within 30 days; in 2024, 62% of state Medicaid beneficiaries received follow up compared to 70% of those in HCP enrollees. The following years saw similar contrast with 74% of Medicaid beneficiaries receiving 30-day post-hospitalization follow-up compared to 86% of those enrolled in HCP.
Using these data, LSS WI also made a strategic organizational decision to divest over $25 million from programs lacking promising outcomes data, while increasing revenue in successful programs by $60 million, illustrating a performance-driven resource allocation. This commitment to rigorous outcome measurement, supported by LSS’s in-house data analytics team, proved that their model can save MCOs money and improve client outcomes, demonstrating a foundational element for sustainable partnerships.24
Actionable Steps for Members
To implement this strategy effectively, SSOs/CBOs must:
- Develop Internal Data Analytics Capabilities: Shift resources to build the internal expertise necessary to consistently measure program impacts, moving beyond simply tracking activities to tracking outcomes.
- Track Payor-Relevant Metrics: Focus on utilization and cost metrics that directly influence MCO costs and state Medicaid financing pressures, such as reductions in ED visits, hospital readmissions, inpatient admissions, and improvements in adherence or HEDIS quality measures.
- Build a “Value Dossier”: Systematically compile evidence and case studies that quantitatively demonstrate how the organization’s programs reduce high-cost care and address social needs gaps for high-risk populations, making the case that the SSO is a financial risk-mitigator for the MCO.