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By Liv Osby, Greenville News

South Carolina's Department of Health and Human Services is launching an effort to reduce the inappropriate use of costly hospital emergency room services and cut costs in the state's Medicaid program.

The Healthy Outcomes initiative, which begins Oct. 1, provides hospitals with funding to devise and carry out plans that improve coordination of care and health outcomes of uninsured patients while also lowering health care costs.

Federal law requires that hospitals see everyone who comes to the ER, including the uninsured. The state's Medicaid program provides hospitals with Disproportionate Share funds, also known as DSH funds, to pay for some of that uncompensated care.

But because these patients often don't have a family doctor, they may seek care at the ER for conditions that are better handled in a primary care setting, such as upper respiratory infections, migraines and chronic conditions like diabetes, according to DHHS.

If they can be seen in a less costly medical home, the state would save money. Often, though, there are obstacles to using primary care, such as a lack of transportation and hours of operation that conflict with patients' jobs.

So under the initiative, hospitals have submitted proposals that include partnerships with other providers in the region, such as free clinics, to try to solve those problems.

"Too often the healthcare system - even for people with insurance - waits for problems to show up at its doors instead of actively working in the community to find the people in the most need of help," DHHS director Tony Keck told GreenvilleOnline.com.

"Just as often, when they do find these people, the system can only address their immediate medical problem - not the root cause which may be related to substance abuse, food insecurity, homelessness, domestic violence, unemployment, illiteracy or lack of social supports," he said.

"Because South Carolina Medicaid will reimburse hospitals $474 million this year for uncompensated care, it is critical to better manage these individuals."

The initiative grew out of the efforts of a number of hospitals around the state, including Greenville Health System and Spartanburg Regional Healthcare System, to improve the health and lower the costs of high-use patients in their ERs, Keck said.

Greenville Health System's plan, for example, calls for creating access to appropriate care and providing a comprehensive care management plant for targeted patients, initially those with chronic conditions such as asthma, diabetes and hypertension.

From April 2012 to March 2013, Greenville Memorial Hospital saw 1,279 patients in the ER with chronic diseases that resulted in 7,335 visits and an average charge of $6,339, according to the plan.

Under GHS's proposal, patients who come to the ER with non-emergent issues will be connected to care managers in the hospital who will find them medical homes. GHS will also operate extended hours clinics to divert non-emergent patients from the ER.

The plan has a goal of reducing ER use, EMS transports, re-admissions and charges by 5 percent, while increasing primary care visits and establishing care management plans.

Statewide, the initial goal is to reach 8,500 patients, find out what works and share it with other hospitals and communities, Keck said.

"This initiative engages hospitals and safety net primary care providers statewide in a collaborative effort to improve our ability to find patients in need and attend to all of their needs - medical and social - that result in poor health and high costs," he said.

"The cycle of ER visits, high costs and poor health will continue if these root causes are not addressed."

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