As Apple Watches makes their way onto the wrists of millions in the coming weeks, the company has demonstrated once again that success and sustainability are a direct result of innovation and modernization. Proof lies in the fact that, like cellular phones, time keeping and personal health tracking isn’t new, but Apple has again re-imagined an old concept to develop something that feels brand new and drives consumers to line up around the block to get their hands on it.
But believe it or not, there is still a sector of our society that lags in innovation, a place where quality and speed are not incentivized and teamwork is more of a concept than reality. That would be government.
For the most recent example, one need look no further than the request for proposals (RFP) released by the governor’s office that proposes to privatize the state’s Medicaid program. On first glance, it would seem that privatization could indeed bring about efficiency and better outcomes. Unfortunately, innovative products and services are only as good as the engineer’s vision and the blueprints used to build them. And if the RFP serves as a metaphorical blueprint for Medicaid managed care, it’s anything but modern or innovative despite almost humorously being dubbed the “Medicaid Modernization Initiative.”
There’s no doubt that the Medicaid program wants for efficiency, but the companies being asked to find it must design their products using a flawed blueprint that appears to have been simply pulled off a shelf from 25 years ago and dusted off. Imagine if Apple was preparing to release the Apple Pocketwatch or the new iRotary Phone – how well would that go over?
As Coca-Cola discovered with its “New Coke” re-branding flop in the 1980s, putting a new name on an old idea doesn’t produce anything but new consequences and consumer skepticism. In this case, Medicaid “modernization” puts hospital payments and beneficiary access to services at risk.
So where do we go from here? Well, Steve Jobs once said, “Innovation distinguishes between a leader and a follower.” The state of Iowa needs to determine whether it intends to lead or follow on this initiative. Will it go the route of New Coke or can the state muster the courage to innovate?
IHA is pushing the state toward the latter, but with a proposal anchored to a jalopy of an idea, it will take significant muscle from hospital advocates to move things in the right direction. By following hospitals’ lead in innovation, the state itself can lead by example. Under those conditions, just like Apple Watch hopefuls, Iowa’s hospitals, Medicaid beneficiaries and the uninsured hopefuls, just might consider lining up days in advance to get signed up.
Lynda Douglas thought she had a deal with Tennessee. She would adopt and love a tiny, unwanted, profoundly disabled girl named Charla. The private insurance companies that run Tennessee’s Medicaid program would cover Charla’s health care.
Douglas doesn’t think the state and its contractors have held up their end. In recent years, she says, she has fought to secure essential care for Charla.
“If you have special-needs children, you would not want to be taking care of these children and be harassed like this,” Douglas said. “This is not right.”
Across the country, state Medicaid programs, which operate with large federal contributions, have outsourced most of their care management to insurance companies like the ones in Tennessee. The companies cover poor and disabled Medicaid members in return for fixed payments from taxpayers.
That helps government budgets but sets up a potential conflict of interest: The less care these companies deliver, the more money they make. Nationwide, such firms had operating profits of $2.4 billion last year, according to regulatory data compiled by Mark Farrah Associates and analyzed by Kaiser Health News.
In an attempt to manage that tension, Washington regulators are about to initiate the biggest overhaul of Medicaid managed-care rules in a decade. Prompted by the growth of Medicaid outsourcing and concerns about access to care, the regulations are expected to limit profits and set stricter requirements for quality of care and the size of doctor networks.
“We want the enrollees to have timely access to integrated, high-quality care,” James Golden, who oversees Medicaid managed care for the Department of Health and Human Services, told a group of insurance executives in February.
Tennessee Medicaid contractors — operated by BlueCross BlueShield of Tennessee, UnitedHealthcare and Anthem — are among the most profitable Medicaid plans in the country, according to data from Milliman, a consulting firm.
State officials point to data on quality and survey results as evidence that the companies are doing a good job while allowing the state to spend far less on Medicaid than predicted. In a survey last year, more than 90 percent of customers using TennCare, as the program is known, said they were very satisfied or somewhat satisfied, officials note.
TennCare Director Darin Gordon worries that new federal rules could hinder states from improving Medicaid quality while controlling costs. “Don’t hamstring us,” he said.
But doctors and patient advocates say state savings and insurer profits come at the price of inadequate physician networks, long waits for care and denials of treatment. Answering another question in the survey, 30 percent of adults said the quality of their TennCare care last year was fair or poor.
More than half of Medicaid beneficiaries in the nation now receive coverage from managed-care companies. That shift helped prompt inquiries by the HHS inspector general last year that found widely varying state requirements for access to doctors and poor information for members on where to find them.
Policy experts believe that the proposed rules, expected soon, will set stricter standards.
In Tennessee, where TennCare’s member-per-doctor ratio for primary care is one of the worst among states that have such rules, views diverge sharply on whether those rules are necessary. Many, like Lynda Douglas, say the system is far from adequate.
Douglas, 69, knew that she wanted to adopt Charla a decade ago, as soon as she took the girl for foster care from the state. Charla’s problems include cerebral palsy, a badly curved spine and frequent seizures. She is 16, cannot speak, weighs less than 80 pounds and loves Barney the dinosaur.
Douglas, who lives about an hour east of Nashville, was grateful that TennCare contractors sent daytime nurses to monitor Charla’s seizures and maintain a tube that delivers medicine or nourishment eight times a day.
Then, more than a year ago, UnitedHealthcare reduced the nursing to one hour a day, even though Charla’s condition hadn’t improved. Douglas protested with the help of the Tennessee Justice Center and a pro bono lawyer and won. But TennCare appealed. It took two more rounds of adjudication before a judge ruled in Douglas’s favor late last year.
The managed-care companies “are making a mint down here,” Douglas said. “They’re getting rich at the expense of the kids. This is not right.”
UnitedHealthcare made an operating profit of $236 million last year on revenue of $2.8 billion in its Tennessee Medicaid business, according to state filings. Anthem’s operating profit for TennCare came to $53 million on revenue of $946 million. BlueCross’s operating profit for TennCare was $121 million on revenue of $1.8 billion. Those results do not include expenses for taxes, depreciation and other items not directly related to health coverage.
“Our care teams worked with the family and with [Charla Douglas’s] physicians and other providers to assure that her services were appropriate,” UnitedHealthcare said in a statement. The plan followed TennCare’s contract and care guidelines, it said.
Gordon, the TennCare director, rejects suggestions that managed-care networks are inadequate or that contractors deny needed care.
TennCare members sometimes have trouble seeing specialists, but so do patients in commercial plans, he said. Like many state Medicaid directors, he wonders how HHS can publish network rules for 50 states with widely varying geographies and health systems.
He also doesn’t accept that Medicaid plans need rules that limit profits and force them to spend a minimum portion of revenue on medical care. Written the wrong way, the standard could discourage spending on coordinators who improve care quality at decreased cost, he said.
“Yeah, we’re a little concerned,” he said. “There are some things that we think may have adverse effects.”
Think of why the police exist and that popular synonym for police, “law enforcement.” That term is casually applied, but its use and popularity has real meaning and implications. In contemporary America, police officers are viewed as responders: they get the radio call, they speed to the scene in their vehicles and then they take care of business by, literally, enforcing the law.
But is that really what the police are for? Sir Robert Peel, founder of Scotland Yard and the father of modern policing, wrote nine principles for policing, the first of which states, “The basic mission for which the police exist is to prevent crime and disorder.”
The primary tactic for upholding that principle was the police patrol – the beat cop, on foot, scouting the neighborhood and interacting face-to-face with citizens. But the very meaning of patrol completely changed when revolutionary technology, in the form of automobiles and two-way radios, hit the streets and took police officers off the sidewalks and away from people.
This fundamental shift from proactive prevention to after-the-fact reaction was not viewed as a problem for several decades. In fact, some concluded that making arrests was the best that police could do because crime was too big and with root causes too complex for the police, as “law enforcement,” to prevent anything.
Many criminologists believe this shift contributed to skyrocketing crime in the 1970s and 1980s. It wasn’t until the mid-1990s, with the implementation of “community policing” and “broken-windows theory” (which says petty acts like vandalism, if not immediately addressed, lead to more serious crimes), that crime rates, particularly in big cities, turned decidedly downward.
What does any of this have to do with health care? Sir Robert wrote, “The test of police efficiency is the absence of crime and disorder, not the visible evidence of police action in dealing with it.” It could also be said that the test of health care efficiency is the absence of illness and disease and not merely the visible evidence of providers delivering care.
Yet, our society remains largely convinced that with the help of crime-fighting gadgetry, we can still arrest our way out of crime (just look at how policing is still depicted on television; is there really any difference between “Adam 12” and “CSI” except the technology?)
It’s not quite so bad in health care; people understand, perhaps more than ever, that illness and disease can be prevented. Still, there are strong expectations (all reinforced by an antiquated payment system) that health care providers, like law enforcers, exist for exactly the reason the name suggests; that health isn’t possible unless care is being provided, often in an intense and costly manner, and that indeed we can treat our way out of poor health.
It is obviously vital for hospital leaders and other providers to address that misguided perception. How? Once again, we turn to Sir Robert, who wrote that the police are simply “members of the public who are paid to give full-time attention to duties which are incumbent on every citizen in the interests of community welfare and existence.” Can’t the same be said of health care providers? Isn’t there more than a little similarity between broken-windows theory and population health?
Health care, like policing, is a partnership between providers and communities, where in the name of prevention each shares, in-part, the other’s role. The future for an effective, efficient and sustainable health care system depends upon transparently connecting with key communities – including government, business and payers – to cultivate those partnerships and ensure shared priorities are understood and best practices are adopted.
Medicaid, with 560,000 insured Iowans, is the second largest health plan in the state, providing health insurance to more Iowans than Medicare. Medicaid is a $4.1 billion program (including state and federal contributions) that spends 58 percent of its resources on 168,000 severely disabled individuals. Correspondingly, it spends 42 percent of its resources on the other 392,000 participants.
Two months ago, the Branstad administration announced its intent to contract management of Medicaid to private companies. Medicaid is currently managed by the Iowa Department of Human Services. The initial request for proposals indicates that the administration is willing to pay up to a 15 percent contingency to successful bidders, of which there will be at least four, putting into play $645 million of earnings per year to be divided among these successful bidders. The state also wants its costs reduced by $100 million per year.
At least 18 companies have indicated initial interest in managing Iowa’s Medicaid program; all but one are non-Iowa companies. The timeline for selection of bid winners is July 31.
This timeline and the notion of moving the entire Medicaid program to management by private entities begs many more questions than it answers.
First is the potential impact on private insurance rates in Iowa. Since the adoption and approval of the Iowa Health and Wellness Program by the Iowa Legislature and Branstad administration, charity care and uninsured rates in Iowa hospitals have plummeted. During the first 11 months of 2014, the number of people hospitalized in Iowa without insurance fell by 47 percent compared with the same period in 2013. With more Iowans now insured, hospitals’ charity care losses fell 31.5 percent, yielding a total 11-month improvement of $103.3 million.
Everyone understands there is no free lunch in health care. The $745 million (earnings plus savings) meal price for Medicaid managed care will come at someone’s expense. It most likely will come at the expense of charity care and self-pay cost reductions.
Second are the implications of Medicaid managed care on Iowa’s Medicaid innovation program. In the last three years, health care providers have come to the table with the state and Iowa’s leading private health insurer to design a program that aligns public and private interests in bringing greater value to Iowa health care. This effort recently resulted in Iowa being one of only 18 states awarded $41 million to further improve Medicaid outcomes.
The chief objective of Iowa’s Health and Wellness Program and the State Innovation Model (SIM) for Medicaid is to move Iowa’s health care system to one that rewards care coordination, resulting in higher quality and more efficient outcomes. Achieving this goal of care coordination and community networks is the SIM’s central focus.
The Medicaid managed care initiative also hinges on the establishment of community care networks. But as proposed, these concepts appear to compete with one another. Based on initial interest, the Medicaid managed care proposal presupposes that those in the best position to establish relationships at the community level throughout Iowa are non-Iowa insurance companies. The lack of clarity on how the SIM coordinates with Medicaid managed care threatens the opportunity and possibly the funding for improvement through the SIM.
This is not Iowa’s first rodeo with Medicaid managed care. The state’s first major initiative with managed care was with the introduction of managed behavioral health services 20 years ago. The results of that experiment are written across Iowa’s health care landscape today as hospitals routinely search for inpatient bed placements, community access to sub-acute care remains virtually non-existent and hospital emergency rooms are, for many, the only point of access to Iowa’s mental health care system.
The state should slow down, resolve questions of fundamental competing concepts and set objective benchmarks for those seeking to assist in managing one of Iowa’s most important constituencies. Perhaps then, Iowa can avoid similar access concerns being imposed on Iowa’s entire Medicaid program.
It’s no secret that Iowa went through one heck of a winter this year. While this is always an area of concern from an emergency response perspective, new attention is being brought to helping give remote Iowans better access to care. This method is called telehealth and it seeks to help Iowans who may live long distances from their nearest hospital or are unable to travel by connecting them directly with their doctor over secure, advanced technological means.
The concept of telehealth is not exactly new. For more than 50 years, the idea of practicing medicine through telecommunications has had several different incarnations. The National Aeronautics and Space Administration (NASA) was one of the first telehealth pioneers. During the “Space Race” of the 1960s, NASA created technology to transmit astronaut vital signs back down to mission control. In fact, much of the history of telehealth has remained in the military and space technology communities.
In the later part of the 20th century hospitals began using telehealth by way of sending X-ray imaging, electrocardiograph data and other patient measures over telecommunications technology. Some will even argue that one of the most advanced forms of telehealth can be seen in the da Vinci surgical robot, in which a surgeon can literally operate on a patient in another room or even another country!
But for the most part, telehealth in its current form refers to the practice of medicine with patients in a videoconference setting. This practice looks to not only increase access for remote and/or elderly patients, but also reduce costs while improving outcomes for the patient. And for the most part, the United States is going all in on telehealth…with Iowa currently being one of a handful of exceptions.
That’s because as of right now, Iowa is only one of four states left in the country without a policy in place to help reimburse doctors and hospitals to use telehealth. That’s not to say that it isn’t happening in the state in earnest; many hospitals and health systems have moved forward with their own telemedicine programs.
However, if Iowa is going to see telehealth in every corner of the state, a fair payment policy needs to be put into law by elected officials. The majority of health plans pay for telemedicine services, but there are inconsistencies in Medicaid payments for telehealth services that must be mitigated. Through legislation, the state could put in place consistent payment structures that will result in adoption of telehealth resources across the state.
IHA has more information on this issue in its 2015 Legislative Agenda. Supporters of this effort can tell their friends and family to learn more about telehealth at www.IowaTelehealthNow.org or they can contact their legislator by clicking here.