Let me tell you about Frank. At  86, he has heart disease, diabetes, and kidney failure. He lives at home but struggles with the 16 medications he must take every day. He could also use some social support–maybe an adult day program, help shopping, or just somebody to keep him company.

What Frank needs most of all is somebody who can help organize all of his medical and personal care. It is complicated and much more than he can manage on his own. And when things go wrong, Frank lands in the hospital. Three times in just the past few months–with a fall, an infection, and with breathing problems.

His Medicare pays for doctor visits and all those drugs. Because he is very poor, also receives Medicaid, which provides him with a home health aide for a few hours, five days a week.  Medicaid is the joint federal/state insurance program for low-income people that has become the nation’s biggest payer of long-term care services.

But there is nobody to organize all of this. And that is costly and bad for Frank’s precarious health.

That may be changing. States are scrambling to create managed care programs for people like Frank, who are called dual eligibles because they receive both Medicare and Medicaid benefits. Twenty-six states have asked the federal government to let them operate managed care programs for  the frail elderly and younger people with disabilities. 

Nearly all states have already taken this step for the moms and their kids who make up the bulk of the Medicaid population. Now they want to do it do it for the 9 million dual eligibles who like Frank are the  poorest, sickest, and most in need of personal assistance. In fact, managed care may be the hottest trend in aging services. Just the other day, Kathy Greenlee, the Obama Administration’s assistant secretary for aging, said “all the energy is in Medicaid managed care.”

States are looking at two models. The first is managed care within a fee-for-service model–something like the payment system we have today. But in the second, Medicare and Medicaid would pay the managed care provider (an insurance company or a health system) a capitated rate, or a fixed monthly fee per patient. For that fee, the company would be responsible for all patient care. A few programs, such as PACE, have been doing this for years.

The trouble is, nobody knows if managed care can work on a broad scale for this population. Coordinating acute, chronic, and long-term care for the frail elderly is very different, and probably much more difficult, than organizing care for a young mom and her child. 

Still, this model holds tremendous promise–if the insurance companies and health systems can figure out how to both provide excellent coordinated care and save money.  And, as I wrote back in April,  it may someday become a model for all Medicare patients. 

Here are two views on the challenges ahead:  First, an optimistic take from the SCAN Foundation. Second, a much more skeptical perspective published in Health Affairs  from Tricia Neuman and colleagues at the Kaiser Family Foundation. Read them. and then watch closely to see how this very important experiment turns out. It may end up changing the way all of us get our medical and personal care.