Improving care delivery to individuals with special or supportive care needs


What states, private payors, providers, and technology companies are doing to control costs and improve outcomes for individuals with behavioral health conditions or in need of long-term services and support, including those with intellectual or developmental needs.

Three groups of Americans can have especially complex care needs: those with behavioral health (BH) conditions, including substance abuse; those with intellectual or developmental disabilities (I/DDs); and those who need long-term services and supports (LTSS) because of chronic, complicated medical conditions or physical disabilities (both of which are often related to aging). These individuals typically require a combination of diverse medical and supportive services that must often be delivered for prolonged periods. (For simplicity’s sake, we use the term special/supportive care needs in this report to refer to the combination of services required by the three groups.) Although individuals with special/supportive care needs constitute less than 20% of the U.S. population, they account for more—perhaps far more—than 35% of total annual national health expenditures (over $800 billion, including more than $450 billion for non-medical services).

States, payors, and providers have an opportunity to improve care delivery for these individuals. Several reasons help explain why it is important that they do so now:

  • The size of this group is growing because of a number of factors, especially population aging, increased awareness of the conditions, and improved diagnostic criteria that make it easier to identify those affected. For example, estimates suggest that the number of people above age 65 will be 60% higher in 2030 than in 2010 and that at least 70% of those over 65 will eventually need LTSS.
  • Inadequate coordination reduces the quality of care and drives up costs. Historically, supportive care programs have been managed by a range of public and private entities, especially state agencies, and services have been delivered by a variety of discrete providers. Because the structural incentives for collaboration among the providers are weak, care is often poorly integrated. One estimate suggests that closer integration of medical and supportive care for individuals with BH conditions could save the country $26 billion to $48 billion annually. Similar opportunities exist to improve the quality and cost of other special/supportive care services.
  • Frequently, spending levels do not align with the acuity of a patient’s condition or quality of care delivered. McKinsey research has found, for example, that in many cases the correlation between the level of need of individuals with I/DDs and the amount payors spend annually for their home- and community-based services (HCBS) is weak. Similarly, our research has shown that the correlation between the per-diem rates charged by nursing homes and the homes’ CMS star ratings (one broadly available proxy for quality) can be low.
  • Care availability is uneven. Many of the individuals with special/supportive care needs find it difficult to access services, largely because of the scarcity of specialist providers and high cost of care. For example, about 300,000 individuals with assessed I/DD needs remain on waiting lists for HCBS each year. Those with LTSS needs face these long waiting lists as well.

Many of the organizations involved in paying for or providing care to the three groups have innovated in recent years to improve care delivery. To investigate these innovations, we interviewed more than 10 state Medicaid directors and other experts, built a comprehensive managed care database of all programs nationwide, and analyzed publicly available databases and other sources. In this report, we present our findings and offer insights into how states, payors, and providers are attempting to increase the quality and efficiency of care delivery for these individuals. In addition, we discuss new technologies that could further improve care delivery to them. Wherever possible, we describe the results achieved through innovation; we acknowledge, however, that because many of these models are new, evidence of their impact is still emerging.