DNP870 Module 4 assignment: policy options analysis against stated criteria, a full sample

A New Benefit or a Contract Requirement? Comparing Two Policy Options for Financing Community Health Workers in Medicaid

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Doctor of Nursing Practice Program, Aspen University

DNP870: Health Policy, Advocacy, and Partnerships

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Month Day, Year

A New Benefit or a Contract Requirement? Comparing Two Policy Options for Financing Community Health Workers in Medicaid

Policy analysis compares options against criteria stated in advance, so that the recommendation follows from the reasoning rather than from the analyst's preference. This paper compares two ways a composite state could finance community health worker services for Medicaid enrollees, a new covered benefit created by statute and a requirement in managed care contracts, using criteria drawn from a standard policy analysis framework, with the current situation as the baseline.

The Problem

Medicaid enrollees in the state face unmet social needs, such as housing instability, food insecurity, and transportation barriers, that contribute to avoidable hospital use. Community health workers can help address these needs; in a randomized trial, low-income patients supported by community health workers had fewer hospital days than controls, and a later analysis estimated a return of $2.47 to Medicaid for every dollar invested (Kangovi et al., 2020). Yet the state has no stable financing for this workforce. Most community health workers are funded by short-term grants, and programs end when grants do.

Criteria

Bardach and Patashnik (2020) describe policy analysis as a sequence of steps that includes defining the problem, constructing alternatives, selecting criteria, projecting outcomes, and confronting trade-offs. For this analysis, five criteria were selected before the options were evaluated: effectiveness, the likely effect on enrollees' access to community health worker services and on avoidable hospital use; cost to the state; equity, whether benefits reach the enrollees with the greatest needs and support a fairly paid workforce; political feasibility, the likelihood of enactment or adoption; and administrative feasibility, the capacity of the agency and plans to implement it.

Baseline: The Status Quo

Under current policy, community health workers are funded by foundation and federal grants in a patchwork of programs. Access depends on where an enrollee lives. Programs are unstable, and workers leave when grants end. The status quo costs the state nothing directly but forgoes potential savings.

Option A: A New Medicaid Benefit

Under Option A, legislation would create a covered benefit for community health worker services, with certification standards and fee-for-service payment rates, available to all enrollees who meet criteria regardless of plan. Effectiveness: high, because it creates a stable, statewide entitlement with defined services. Cost: highest of the options, with estimated first-year state and federal spending of $14 million statewide, partly offset by savings over time. Equity: high, because coverage follows the enrollee rather than the plan, and payment rates can be set to support fair wages; research has found that community health worker wages rose more in states with certification programs (Jones et al., 2022). Political feasibility: moderate, because it requires legislation and appropriation in a tight budget year. Administrative feasibility: moderate, because the agency must write certification and payment rules and obtain federal approval.

Option B: A Managed Care Contract Requirement

Under Option B, the Medicaid agency would amend its contracts with managed care plans, which cover most enrollees, to require each plan to fund community health worker services for members with identified social needs, counting the spending toward quality incentives. Effectiveness: moderate, because plans would decide how many workers to fund and for whom, and services would vary by plan. Cost: lower to the state in the short term, since plans absorb costs within existing capitation, though rates may rise later. Equity: moderate to low, because enrollees in fee-for-service Medicaid would be excluded, and plans may target members with the highest expected savings rather than the greatest needs. Political feasibility: high, because it requires no new legislation. Administrative feasibility: high, because it uses existing contract processes.

Confronting the Trade-Offs

Option B is easier and cheaper in the near term; Option A is more effective and equitable but harder to enact. The choice turns on whether the state values speed and feasibility or durability and fairness. A combined approach can capture some advantages of both: adopt Option B immediately through contracts, which can begin within a year, while pursuing Option A as a regional pilot through legislation, using the pilot's evaluation to decide on statewide coverage. This sequencing tests the benefit's cost and savings in practice while ensuring that some enrollees gain access now.

A Summary Comparison

Rated on a simple scale of low, moderate, and high, the options compare as follows. On effectiveness, the status quo is low, the contract requirement moderate, and the new benefit high. On cost to the state, the status quo is lowest, the contract requirement low in the short term, and the new benefit highest. On equity, the status quo is low, the contract requirement moderate to low, and the new benefit high. On political feasibility, the status quo requires nothing, the contract requirement is high, and the new benefit moderate. On administrative feasibility, the contract requirement is high and the new benefit moderate. No option dominates on every criterion, which is typical of real policy choices and is why the analysis must say how the criteria are weighed.

In this analysis, effectiveness and equity were weighted most heavily, because the problem is defined by unmet needs among the enrollees least served by current programs. An analyst who weighted cost and speed most heavily would favor the contract requirement alone. Stating the weighting openly allows decision-makers who disagree to see exactly where and why their conclusion would differ, rather than disputing the evidence itself.

Recommendation

The recommended policy is a two-part strategy: require managed care plans to fund community health worker services in the next contract cycle, and enact legislation creating a covered benefit as a two-year regional pilot with a required evaluation. The strategy performs better than either option alone on effectiveness and equity, while remaining feasible. Its main risk is that the contract requirement becomes a substitute for the benefit rather than a bridge; the evaluation requirement and a sunset on the contract-only approach address that risk.

Conclusion

Comparing a new Medicaid benefit with a managed care contract requirement against stated criteria shows a clear trade-off between feasibility and fairness. Sequencing the two, contracts first and a legislated pilot alongside, offers a practical path toward stable, equitable financing for community health workers.

References

Bardach, E., & Patashnik, E. M. (2020). A practical guide for policy analysis: The eightfold path to more effective problem solving (6th ed.). CQ Press.

Jones, T. M., Jeung, C., Schulte, A., Lewis, C. M., & Maddox, P. J. (2022). Hourly wages and turnover of community health workers according to US state certification policy and Medicaid reimbursement, 2010-2021. American Journal of Public Health, 112(10), 1480-1488. https://doi.org/10.2105/AJPH.2022.306965

Kangovi, S., Mitra, N., Grande, D., Long, J. A., & Asch, D. A. (2020). Evidence-based community health worker program addresses unmet social needs and generates positive return on investment. Health Affairs, 39(2), 207-213. https://doi.org/10.1377/hlthaff.2019.00981