As Iowa’s 118 community hospitals and 71,000 hospital employees work daily to bring healing and wellness to all Iowans, the state’s reckless rush toward privatization of the Medicaid program has been a source of extreme concern. Most concerning are the myths about privatization perpetuated by our own governor as he tries to promote what is simply a bad idea for Iowa and, especially, for 560,000 vulnerable Iowans who depend on Medicaid.
On behalf of those Iowans and the health care professionals who care for them, it’s time that all of Iowa sees these myths for what they are: misleading half-truths that cannot hide the failures of this ill-conceived plan.
Myth: The federal government held Iowa to a higher standard when it forced the state to delay its plan.
Fact: The governor and his staff knew exactly what was needed to satisfy federal officials and, with any exercise of due diligence, they should have also realized it would be impossible to make this wholesale transition in only a year. No other state has ever privatized even part of its Medicaid program in such a tight timeframe, let alone the entire program, as the governor is seeking to do.
It was obvious to everyone, particularly among frustrated Medicaid beneficiaries, that the state was not ready, but Governor Branstad chose to ignore them, the people who provide their health care and other state leaders. Federal officials did what they were supposed to do: protect beneficiaries and ensure program integrity.
Myth: Medicaid privatization is the only option for coordinated, accountable care.
Fact: With the full knowledge and endorsement of Governor Branstad, the state already supports alternatives through the Medicaid State Innovation Model, Integrated Health Homes and Accountable Care Organizations – and as far as reducing cost and improving efficiency, they are working. The state and hospitals have put cooperative effort into these programs and they have shown more savings in the past five years than private managed care for Medicaid has demonstrated in 30 years of so-called “innovation”. Then again, there is nothing innovative about denying and delaying care.
The bottom line is Iowa already has one of the most efficient Medicaid systems in the nation and the state and health care providers have been working, hand-in-hand, to make it even better. Privatization will simply interject a very expensive middleman who will extract millions of dollars to meet corporate goals while adding no value to the system.
Myth: Iowans will support clean water, strong public education or a community-based, efficient and patient-oriented Medicaid program, but not all three.
Fact: Iowans can and do support all three and the path hospitals and other health providers desire to take will further sustain Medicaid and other widely-held priorities. The people of this state would rightfully reject wholesale privatization of the public school system or water resources, so it’s no surprise that nearly eight out of 10 Iowans oppose privatizing health care coverage for a half million highly vulnerable citizens. Knowing that, Governor Branstad’s administration fired its plan through the Capitol with no legislative debate and then, with the throttle firmly planted to the floor, pretended to take input from a predictably skeptical public.
As of today, nothing has been done to assuage that skepticism, which is why IHA, along with thousands of health care professionals and even more every-day Iowans, continues to oppose this untenable, unnecessary plan that puts the health of impoverished, disabled and elderly Iowans at risk.
Health care providers across the state know we can do better. In fact, we already are.
I adopted Colin and brought him home when he was one-day old. My wife and I were filled with joy as only new parents can be. It soon became clear that our perfect baby had severe difficulties. He had microcephaly, cerebral palsy, hypertonia and was almost blind. We were committed to him and started to find help, as his condition was way over our heads! We found Medicaid provided services in order to give him the help we were unable to give, and that would help him have a happy, productive life.
I also adopted my second son and found that he also had a medical condition that we had not known about. No one did. These boys are darling boys with their own talents and difficulties. Colin’s smile will light up any room, and he never, never feels sorry for himself. He was the boy that was to never, see, walk nor talk. He does all three.
My two special needs children now face a new challenge: the privatization of Medicaid services.
The changeover in Iowa from the reliable and efficient Medicaid system that dispenses $4,200,000,000 (that’s billion) dollars of needed medication and services to the elderly, sick and disabled community of 560,000 people in Iowa has gone from really bad to unworkable. I’m not a political person, and I’m certainly not taking an academic view of this situation. This issue is very personal to me as two of my three children are recipients of medical services they clearly need and that I cannot otherwise provide them. The State of Iowa is treating this like a game, or a political contest to be won or lost. I have two beautiful boys, 11 and 13 who are affected by the outcome of this issue and the results may continue to give them a good life, or become life-changing, if not threatening for them.
Here’s what I see. Our society has decided to take care of the less fortunate than us, the sick and the disabled. This is not because of who they are, but because of who we are and how we want to see ourselves. Medicaid in Iowa has been funded by 45 percent State funds and 55 percent Federal funds to accomplish this task. In the 13 years I have been personally involved in this system, I have found Medicaid and the Iowa Department of Human Services workers who administer its funds and services to be dedicated, caring, competent and, yes, overworked. The overhead that administration has cost is 4 percent of the fund. Now, 4 percent of the $4.2 billion is a lot of money, but just wait. It gets a lot better.
The new system will be administered by four (now three) for-profit managed care organizations that will be allowed 15 percent for overhead and profit. My radar goes up when this much money is involved, when it is being rushed to completion, when one of the four MCOs is removed by an Iowa judge after being involved in fraud and misrepresentation, and when providers and recipients cannot get answers to basic questions like how much they will be paid and how the system will work. Why is the Iowa administration (governor’s office) claiming that $51 million will be saved when this system will cost $462 million more in direct fees to the MCOs than what currently goes to administrative costs? I’m a real estate broker, not a math teacher, but if we don’t get more state or federal money, and the system costs $462 million more than the one we have that works, the only way to do that is to cut services. That means that my sons will pay the bill in reduced services so we can privatize a system that already works very well. Why are we doing this? Certainly not to save $51 million. As the numbers indicate, it will cost money, not save money, if needed services are not cut.
The governor was fighting tooth and nail to implement this system by January first, and even the federal Heath and Human Services Administration acknowledged it was unworkable and mandated a 60-day delay to sort out the details, including the fact that not enough people or providers have signed up for it. So now we are caught in the middle of a changeover that may or may not happen, and the health and well-being of our children are caught in the middle of this political battle.
I have called Iowa Medicaid Enterprises twice and was promised both times that they would not throw my 13-year-old son out of the facility he lives in when the changeover time is up. My response was relief. All I asked was that they simply write that down, because all the reams of literature I have been provided with and have reviewed have never said that. I asked that they write me an email or letter simply stating that my son’s services would not be cut or eliminated, because he would not survive without constant care. They both said they could not write it down. I would have to trust them, and they would have a supervisor call who had the authority to write this letter. Neither the letter, or the call from the supervisor ever came.
So, I found out who the main providers are for my children, whom they have selected as MCOs, and I picked those MCOs for my children all before the deadline of Dec. 17. Here is where the system really starts to break down from the perspective of the recipients of Medicaid services. I found that one of the providers would approve a medication used by my youngest son. His prescribing doctor and his entire history of medical care has been associated with the University of Iowa Hospital in Iowa City. UIHC has not selected the MCO that will provide this medication. So, I cannot continue my son’s medical care there because of procedure — not because of any medical consideration. (Editor’s note: Since this article was originally published in December, UIHC has signed contracts with all of the participating MCOs).
The medical situation is even more difficult for my other son. He is medically fragile and lives in a wonderful home called an Intermediate Care Facility for Intellectual Disability, or ICF/ID. His ICF/ID has signed contracts with all four (now three) MCOs. None of these MCOs have given my care provider any indication regarding how they will be reimbursing my son’s care, so I don’t have any idea which one to select. Keep in mind that these funds are a benefit due to my son’s medical condition, not a contract between two business people trying to make a profit. This is his money they are dealing with and so far, no MCO has indicated what they will be giving this boy so he can live in a caring, medical environment.
I’m fully engaged in this process because my son’s well-being is involved and is at risk, but I keep wondering why we’re doing this in the first place. The former system was working very well and was very efficient. It was reliable and with one payer, it was not confusing. The doctors were caregivers and the disabled, elderly and needy were the patients. The governor says the shift will yield some mysterious $51 million in savings, but no one has been able to identify the origin of these savings for me.
I don’t know what the future will be regarding this system, but I do know that some very motivated people will be making $462 million each and every year, and my two sons’ medical futures are at best unsure, and very much at risk. Any “savings” will be paid for by Iowa’s Medicaid recipients because they are a population who often cannot even speak for themselves and are an easy target. I do know that with every passing day, this system is becoming more confusing. It seems to be falling apart from the inside. It will provide less care to those Iowans who need it most, and there continue to be fewer and fewer answers regarding coverage, care and procedure. Also, I cannot think of one reason that we are attempting to change a system that already works, aside from the $462 million reasons that the MCOs have to bring this managed care to Iowa.
Wouldn’t it be easier and better for Iowans if we quit while we are ahead, and keep the system that we have? I know it would be better for me and my family.
Jeff Edberg is a native of Iowa City, where he works as a real estate broker. He and his wife Carol are adoptive parents committed to their kids’ happiness and well-being.
(The following was submitted to the Sioux City Journal in response to this editorial that appeared on December 20.)
The Iowa Hospital Association has been analyzing and evaluating the state’s plan for privatizing management of the Medicaid program since it was announced nearly a year ago. But long before that, IHA and Iowa’s hospitals accumulated years of experience with this arrangement through Magellan’s contract to manage Medicaid behavioral health services.
It is that analysis and experience that has led IHA to oppose the state’s privatization plan.
With Iowa’s low cost per beneficiary and minimal administrative overhead, the managed care companies will struggle to return any savings to the state. But make no mistake; these huge, for-profit, out-of-state companies that have fought tooth and nail to win a contract from the state will do everything they can to make money from this deal. To accomplish that preeminent goal, they will restrict access to care and they will reduce payments to providers.
This is not a guess or a threat; it is what managed care companies have consistently done across the nation to meet their business goals. In other states, these companies are known not as care managers, but money managers. They control costs by limiting access to care and reimbursement for care to meet their obligations to shareholders. With these restrictions in place, they may even save the state some money, but rest assured that savings will come at a price for Medicaid beneficiaries and the people who care for them.
And be aware that these companies are far more dedicated to shareholders than taxpayers, as evidenced by the research. A rigorous and recent Medicaid managed care study by the Robert Wood Johnson Foundation found that “any potential savings will not be significant” and that those savings “generally are due to reductions in provider reimbursement rates rather than managed care techniques.”
Meanwhile, Iowa hospitals and the state have already been working together to coordinate care and reduce costs. Through existing Accountable Care Organizations, Integrated Health Homes, the State Innovation Model and the Iowa Health and Wellness Plan, efforts are underway and creating positive results in Iowa – without the additional cost to taxpayers to cover an out-of-state company’s profit margin. In fact, the University of Iowa Public Policy Center released a report just this past March indicating that existing care coordination through Iowa’s Primary Care Health Home Program has generated 20 percent in savings ($11 million) in its first 18 months.
With results like these already occurring, why is the state looking to eliminate successful programs for an unsuccessful, unnecessary privatized model? And why is the Journal’s editorial board endorsing this plan, especially given the well-reported legal and ethical misdeeds of these companies as well as their botched rollout of the Iowa plan, which has been so poorly managed that the federal government was forced to step in and delay it?
There is no reliable evidence that Medicaid privatization reduces costs, improves quality or increases access to care. This is why Iowa’s hospitals encourage the Journal to reconsider its position and look beyond the claims and promises of companies that have no stake in Iowa, but simply seek to make money off of vulnerable Iowans.
At last week’s meeting of the Iowa Health Policy Oversight Committee, dozens of Iowans came to the Capitol to oppose privatization of the program, while a handful of non-Iowans were brought in to counter the wave of criticism.
It was an odd, but telling dichotomy. Here was a crowd of actual Iowa Medicaid beneficiaries and their family members and caregivers who, day-in and day-out, live the program and are now dealing with the frustrations brought on by a huge change for which the state – and, consequently, the vulnerable Iowans it serves – is clearly not prepared.
On the other hand, there was not a single Iowa citizen speaking in favor of privatization. Sure, there were a few speakers who claimed to be “neutral,” but at the end of the day their concerns and criticisms of the state’s ill-conceived, overly rushed plan were practically dittos of the Medicaid beneficiaries’.
Supporting the plan were, of course, the managed care organizations (MCOs), who continue to insist that everything is fine, but still fail to produce the evidence to support such optimism. They offered endless assurances about network adequacy, staff preparedness and infrastructure readiness, but their happy talk flew in the face of actual experience. Medicaid beneficiaries, one after another, shared tales of woe regarding lack of information, misinformation and disconnected calls. Yet, these incredibly vulnerable people are up against a deadline to make life-altering decisions that they are simply not prepared to make.
Then there was the testimony of the out-of-state beneficiaries. No doubt, these are good, sincere people, but the fact that they were brought in by billion-dollar MCOs and stood alone as proponents only raised more doubts, and more cynicism. Their stories fell flat among those who continue to wonder, “What about Iowans on Medicaid? What about us? Who speaks for us?”
One thing these anxious Iowans must be assured of is this: That their hospitals are on their side. Perhaps more than anyone else, health care providers know these Iowans. Hospital staff see and talk to them every day. They know Medicaid beneficiaries’ struggles and their fears. From front desk volunteers to unit clerks, physicians, nurses and technicians, hospitals know these are extraordinary patients who daily have much to overcome – and much to lose.
And understand this as well: these Iowans and their families trust their hospitals. Virtually no negative words were spoken about providers (or about the current Medicaid program, for that matter); it was clear they cherish and value the health care professionals with whom they work. They know that coordinated, patient-centered, high-quality care is not a marketing concept, but a way of practice that is realized every day in Iowa hospitals.
Hospitals must recognize and own that trust and they must stand by their record of service excellence, innovation and continuous improvement. Medicaid beneficiaries, who have been jaded by the shallow promises of the MCOs, must see that their hospitals are beside them not coincidentally, not because of politics and not because of revenue streams.
Their hospitals are beside them because that’s the right place to be. Because privatization is still wrong for Iowa and, most importantly, wrong for Iowans.
Last January, the state of Iowa went shopping for a vehicle that would carry out the governor’s order to implement Medicaid managed care by New Year’s Day of 2016. What’s transpired since then would not pass even the most fundamental test of how to shop for and obtain real value.
Any value-conscious shopper knows that a good deal starts with identifying and meeting established needs with the intent of doing more – more efficiency, more savings, more value. At the end of the day, the goal is to have something better and never to back-track.
That goal was not a priority as Iowa pushed out its request for proposals to the managed care dealers – and the results show it. Instead of new and innovative vehicles customized to respond to Iowa’s needs, the state got the base models with straight-off-the-shelf ideas and approaches. Not only did the proposals bring no innovation, they shoved Iowa’s population health progress off the road. The state didn’t even blink; its goal was seemingly not so much to have something better but to just have…something different.
And so the contracts were awarded and the managed care dealers delivered their vehicles, all shiny and new on the outside with plenty of fancy “Iowa” branding. But under the carefully polished surface were the decades-old creaky chassis and clunky drive trains that have plagued health care providers and Medicaid beneficiaries from coast to coast.
Undeterred, the dealers slapped Iowa license plates on their jalopies and state officials took them on the road to “listening sessions.” Iowans, who know a lemon when they see one, gave them an earful, with most of their sentences ending with exclamation points or question marks (or both). The state (and the managed care dealers who tagged along) “listened”…and moved on.
So Iowans talked louder. They wrote letters, sent emails and posted on social media. Their newspapers wrote stories showing how these vehicles have consistently underperformed and uncovering the questionable business practices and legal misdeeds of the managed care dealers. Then they published editorials wondering how and why the state ever made these deals. Hundreds, if not thousands of Iowans flooded the phone lines when the federal government asked for input.
Meanwhile, unable to hold up against a combination of the state’s pedal-to-the-metal timeline and growing scrutiny – not to mention virtually no public support – the managed care vehicles have started disintegrating as more issues and problems emerge. Where were the beneficiary packets? How can there be an out-of-network payment penalty when there are no networks? What about this lawsuit and that lawsuit? What about the judge who says one of vehicles needs to be recalled and junked? Where is this $51 million in savings going to come from? What will happen when all the various grace periods run out?
The state replied: stop being afraid, all is well. Don’t worry about the speed, the lack of safety (who really needs a seat belt?) or the bits and pieces shaking loose from the duct tape and chicken wire.
But Iowans don’t respond well to bad deals or condescension, so their completely understandable demand for the state to put an end to its headlong rush into the unknown and unnecessary continues.
And their hospitals – the professionals they trust more than anyone else – are right there with them. Together, we seek only what’s right for Iowa and what’s best for Iowans. And like Iowans always do, we demand value – for health care providers, for taxpayers and for 560,000 vulnerable Iowans who want and deserve real answers.