The Importance of Organizational Agility for a Changing Medicaid Landscape (Part 1)

As news feeds, push notifications, and national headlines remind us every day, the Medicaid and healthcare reform landscape is continually evolving. Regardless of specific policy outcomes, there’s consensus that the new administration will reduce spending on Medicaid, and offer states greater flexibility in Medicaid program management as it relates to payment methodologies, service packages, eligibility, and service delivery.

In terms of funding, the state impact could vary widely. While many states and healthcare organizations remain focused on responding to the implications for payment and delivery models, there’s a more fundamental component of organizational resiliency in this time of uncertainty: proactively orienting and aligning internal operations to enable greater adaptability and agility.

Upcoming programmatic changes require significant organizational agility – agility with regards to how organizations:

  • Build organizational capacity to absorb strategic change
  • Communicate changes with stakeholders such as providers and enrollees
  • Adapt to change and the internal expertise required to do so quickly
  • Use technology to ease the transformation
  • Manage data to allow for informed decision making and outcome-focused results

Organizations that adopt an iterative “adapt and learn” mentality will more quickly and effectively adjust. By applying agile principles to organizational design and talent development, state Medicaid programs, payors, and providers can get ahead of the curve as it relates to new technology, strategy, and regulatory requirements brought by healthcare changes.

How should state Medicaid programs approach this change? As states prepare for change, they should consider focusing on their:

Organizational capabilities: To provide the organizational focus that is critical for success, state Medicaid programs will need to align their organizational structure and         resources with the program’s changing needs and strategic objectives. Leadership must commit to being nimble during this period of change.

Resource levels and staff expertise: State Medicaid programs must develop staff with the appropriate expertise and experience to address the demands of a more agile Medicaid enterprise. Leadership is both a dimension of excellence and a key enabler of an organization’s ability to create and sustain excellent performance. Employees with the right skills, proficiency levels, and motivation to exceed role expectations are vital to organizational excellence. A shared vision, paired with an organizational change management approach, is required for any sustainable strategic change. The right structure and policy in place allows an organization to be capable and adaptable to change. Dedicated resources not only drive change, but also embed those changes long-term.

Agility of technology: Technology can be a key driver to organizational success, but it can often stall change when it does not match an organization’s objectives. A modular system enables organizations to replace technology quickly and take advantage of innovation without a major system overhaul.

Adaptability to manage data across the Medicaid enterprise: Data can bring new insights to the organization and can lead to better decisions—supporting efforts such as population health management. An adaptable approach allows organizations to integrate data across different sources and support data-driven decisions.

While the new presidential administration’s policies will most directly affect Medicaid as a state organization, impacts will undoubtedly reverberate throughout the healthcare industry. In Part 2 of the series, we’ll unpack these implications for providers and commercial payors.

Click here to read Part 2 in the series.