(The following was written in response to this column.)
Dr. Steven Goldberg, the chief medical officer from WellCare, one of the managed care organizations (MCOs) contracted to take over Iowa’s Medicaid program, paints quite a rosy picture of managed care under companies like his. On behalf of Iowa’s hospitals and the vulnerable Iowans who depend on Medicaid, the Iowa Hospital Association would like to explore these claims a bit further:
- Regarding the studies from the Menges Group and Lewin Group that purport to show savings from managed care: The $2.4 billion in “savings” claimed in the Menges report sounds impressive, until you divide it among the 40 managed care states, which includes nearly all the largest states in the union. California alone has 9 million managed care enrollees – 16 times the potential number in Iowa – so how much of this claimed savings could possibly find its way to Iowa?
- However, that might be a moot question, because the numbers from the Menges report are not actual savings but projections based on assumptions of reducing inpatient admissions (30 percent) and outpatient services (25 percent) due to care coordination, something Iowa providers are already doing.
- The 2009 Lewin Group study also depends on data from as far back as 1995. The relevance of this information is questionable in a post-Affordable Care Act health care world.
- That same study raises serious doubts about Medicaid managed care’s viability in a state like Iowa: “Rural settings pose daunting challenges to the managed care model in Medicaid (as well as for other payers). The limited number of providers can make development of a network problematic, and the market may be unable to provide the economies of scale that are achievable in more metropolitan areas.”
- While Dr. Goldberg is quick to point to savings “up to 20 percent” reported in the Lewin paper, that’s the highest end of the spectrum. Most states reported significantly less savings – as little as one-half of one percent.
- A much more rigorous and recent Medicaid managed care study by the Robert Wood Johnson Foundation (RWJF) 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.”
- It’s also worth noting that both of the studies cited by Dr. Goldberg were not peer-reviewed and were paid for by the health plan industry (companies like WellCare), while the RWJF report was done independently and only included peer-reviewed studies.
- With regard to the health care outcomes results WellCare credits to managed care in Kentucky and Missouri: The managed care industry doesn’t own a patent on coordinated, preventive care. Through existing Accountable Care Organizations, Integrated Health Homes, the State Innovation Model and the Iowa Health and Wellness Plan, these same 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 this already occurring, why is the state looking to eliminate this and other successful programs for an untested MCO model?
As the media have reported –and in addition to assorted legal and regulatory misdeeds – the four Iowa contractors have a history of making unverifiable claims. But once the MCOs have taken control from a state, these claims take on a life of their own because only the companies have access to the complete information. Meanwhile, the RWJF study, the most current and objective available, found virtually no upside to Medicaid managed care with regard to savings, access to care or quality improvement.
This massive, fast-moving change offers nothing to Iowa. What these health plans claim they can bring is already happening here – led by Iowans, for Iowans.
It’s time to show the MCOs the door.
Let’s just clear one thing up from the get-go: Iowa hospital leaders do not fear change. Anyone who does fear change really has no business in health care administration – or health care, for that matter.
Health care is change. Much of it is necessary and welcome, innovative, even revolutionary. Some of it is unnecessary, a hindrance, even dangerous. The bulk of it is somewhere in between – basically good ideas in need of refinement, testing, tweaking, discussion, compromise. In health care, real, disciplined change takes leadership, cooperation and time.
But that’s not how it’s working with Medicaid managed care, with the state single-handedly rocketing toward its January 1, 2016 implementation. It is, at this point, a dictatorial do-something that lacks credibility and buy-in. And now accusations have been laid down that those questioning that plan and timeline – including health care providers – are merely defending the “status-quo” and have no real arguments, but only fear the change.
So let’s talk about what really comprises the status quo in managing Medicaid. In support of its version of Medicaid managed care, the current administration points out that dozens of states have privatized their programs. Not only that, many of those states have contracted with the very same companies that won Iowa’s bid. This is put forth as proof that the administration’s plan is a good plan.
One would hope for something more substantial, but “everybody’s doing it” seems to be the beginning and end of the administration’s central point. It’s not for lack of trying to create a substantial argument, one can assume, but for lack of substantive proof (see “$51 million in Medicaid savings”). Despite years of experience in dozens of states, there is simply no evidence that privatized Medicaid managed care improves health, increases access or saves money.
Talk about status quo, how can anyone reasonably expect something new, different and better when the same plan is being put into place with the same out-of-state, profit-driven business partners? And putting it into place at breakneck speed certainly doesn’t bolster the state’s case. In fact, the rush to implementation not only undermines credibility, but wrecks any real chance of collaboration and innovation. Who has the time (or motivation) to do anything new and thoughtful for Iowa?
The real rub to all this is that not only can Iowa do Medicaid better, Iowa is doing Medicaid better. Through the State Innovation Model, Accountable Care Organizations and Integrated Health Homes, there is progress on accessibility, quality and cost. Those changes and that progress are being made because there has been teamwork between the state and providers, because good ideas have been refined, tested, tweaked and, when needed, compromised on. How can slicing up Iowa’s Medicaid population and the people who care for it between four huge, out-of-state companies possibly create an environment conducive to care coordination?
Iowa hospitals lead change, with Medicaid and on countless other fronts. When it is collaborative, positive and patient-centered, Iowa hospital leaders embrace change. But the state’s plan for Medicaid has none of those qualities. The state’s approach is change without discipline and it needs to be rescheduled and rethought.
It isn’t out of trepidation that Iowa hospitals have reached that conclusion; it is out of well-considered, ongoing analysis based foremost on putting the health of people and communities first.
The Iowa Hospital Association (IHA) opposes the state’s plan because it seeks to reduce Medicaid costs by restricting access to health care services and reducing reimbursement to providers through claims denials and requirements for prior authorization. Merely copying what 40 other states have pursued unsuccessfully is not new or innovative. It simply hands the reins of Iowa’s second largest insurance program to four out-of-state companies, along with a half a billion dollars of Iowa taxpayer funding.
Research of publicly funded managed care in both Medicaid and Medicare clearly demonstrates that minimal to no savings occur through the private management of these programs. In fact, spending for private management actually increases the cost of these programs in markets that are efficient utilizers of public resources. Iowa is such a market, as shown by the state’s low average cost per Medicaid enrollee and its low Medicaid administrative costs (among the lowest in the nation, in fact).
The current administration and Iowa hospitals agree that Iowa has been an innovator in its management of Medicaid. Just this year, the federal Centers for Medicare & Medicaid Services (CMS) approved a $40 million implementation grant for Iowa to continue work on the State Innovation Model (SIM) initiative, a multi-payer Accountable Care Organization (ACO) model that resulted from an 18-month collaborative plan design phase. The plan was approved by CMS and envisioned a long-term goal of advancing the significant progress made after the state expanded Medicaid to create the Iowa Health and Wellness Plan, which provided health insurance to more than 150,000 newly eligible Iowans.
The first five years of ACOs have yielded cost savings in both the private insurance market and the public sector (with Medicare) that have already eclipsed decades of experience with privatized Medicaid managed care. Moving to privatized Medicaid is a divergence that will inhibit, not improve, further opportunities for innovation.
One way Medicaid innovation is at work today is through Integrated Health Homes (IHH), which coordinate care for Iowa adults and children with serious mental health issues. Along with mental illness, these patients typically have three or more chronic health conditions, often leading to trips to the emergency room (ER) and hospitalizations, making their health care very expensive.
Managing care for such complex patients, who interact with many parts of the health care system, is always difficult and often fragmented. However, the health homes’ team-based approach addresses those issues by training providers, tracking patients and sharing information among providers, resulting in fewer ER visits and hospitalizations, reduced cost to Medicaid and a better quality of life for these Iowans.
So what is the future for these forward-looking programs under the state’s Medicaid managed care plan? The truth is, no one seems to know. The state is moving so fast and awarding contracts so quickly, those kinds of questions have been left unanswered. This is why there is grave concern among Iowa hospitals and other health care providers that these innovative and effective programs will simply be run over in the rush to implement privatized managed care.
The vast majority of Iowans are not on Medicaid, but the 560,000 who are in the program are among the state’s most vulnerable and least represented. We should all be concerned about their health care, not to mention what happens to the taxes that pay for it. There is no solid evidence from other states that privatized management will improve the health of Medicaid recipients, provide better access to care or save money.
Those in charge of the state’s fast-track plan for Medicaid privatization seem to rely on no one noticing the perils ahead. Iowans who care about their neighbors and holding our government accountable should prove them wrong.
“I don’t think the medic ever saw anybody so messed up and still living. Doc was trying to give a shot of morphine. I looked over at him, and that needle in his hand looked to me like a runaway sewing machine. I actually had to hold on to his arm to steady him so he could give me a shot.”
Those are the words of Dennis Joyner, a Vietnam War veteran who, while patrolling the Mekong Delta, lost both legs and an arm in a mine explosion. Joyner’s story, and millions of others like it, is now honored by the American Veterans Disabled for Life Memorial, the newest monument on the National Mall in Washington, D.C.
The fact that the memorial opened just last year is itself a blunt statement about the complex and sometimes shameful relationship our nation has had with its “wounded warriors.” At the memorial’s dedication, President Obama shared the story of a Continental Army soldier who lost the use of one of his hands in the American Revolution. That wound made him officially “unfit for labor,” but also unable to receive any kind of disability pension. He wrote the White House in frustration that “many of those who aided in conquering the enemy are suffering under the most distressing poverty.”
Sadly, those words written more than 200 years ago still carry truth today, as the nation’s health care system still struggles to help veterans heal and manage their health. That struggle persists despite more than $150 billion being spent annually by the U.S. Department of Veterans Affairs.
While that amount may seem like more than enough to care for some 9.1 million VA-enrolled veterans, it’s important to bear in mind the complexity of these cases in terms of not only physical health and disability, but mental health and socioeconomic factors (these are, after all, young people, barely into their lives as workers and earners, who often come from low-income, low-education backgrounds where support simply cannot be sustained). In many ways, disabled veterans are textbook examples of the highly-complex, high-risk cases that challenge virtually all providers to coordinate care, manage resources and control costs.
So it is with more than a little sympathy that community hospital leaders should view the struggles of the VA. Community hospitals know all too well the impediments that come with caring for complex, chronically ill patients within the financial and regulatory constraints of government-paid health coverage. At the same time, it re-affirms that those in charge of these programs – from Congress and the Iowa Legislature to agency and department heads – have an obligation to properly fund and manage them so that innovation is encouraged.
That is where IHA comes in, supporting and representing the interests of Iowa’s community hospitals and ensuing access for the patients they serve. It is also fundamentally why IHA has called into question the state’s plan and timeline for implementing Medicaid managed care, a plan that not only lacks innovation, but presents a real threat to the accumulated progress made by Iowa providers.
It is all too easy to forget people who live on society’s margins, including those who are disabled, chronically ill and poor. For disabled veterans like Dennis Joyner, the new memorial — at last — speaks to that marginalization and serves to remind a nation, in the heart of its capital city, that there is an obligation to care.
But there will never be a memorial for Medicaid enrollees. Let’s do everything possible to ensure one will never be needed.
It’s a town like hundreds of others scattered across the nation’s midsection. The county seat with about 9,000 people, tiny by coastal urban standards, but not quite “small” by local standards. An economic base in manufacturing and agriculture. Ninety minutes to the nearest city of 50,000. An attractive Main Street and a Walmart bring regional shoppers. A state park with a good-sized lake brings in regional tourists.
There’s also a hospital and its stats are also familiar. Forty beds and 170 employees. About 1,000 annual admissions and an average census of 10. Fifty thousand outpatient visits and 200 births a year. But it’s not enough – this hospital is dying.
In fact, it’s slated to close in October. The reasons are familiar: a shrinking population that is leaving behind the old, the poor, the uninsured and the under-insured. And shrinking reimbursements from Medicare and Medicaid that are failing to be offset by other revenue streams. All made worse by a state government that refuses to expand Medicaid – even while hospital leaders have issued countless warnings about the consequences and even as this hospital has foundered in financial straits.
There are those who will shrug away this hospital’s demise. “It was just one hospital,” they will say, even though it is also hundreds of jobs (both in and out of the hospital) and millions of dollars and the only hospital in an entire county and beyond. “It was just one hospital,” they will say, even though there will be no replacing its community benefits, its community support or its community leadership – ever.
Some will say this is the natural evolution of the marketplace, as if the marketplace was as pure, organic and free from manipulation as the Serengeti (well, the Serengeti of 300 or more years ago). But that’s not how health care works and there’s no going back.
For better or worse, this nation has chosen to treat the business of health care differently as a matter of priority and policy. A commitment has been made to accessible care. Through public policy, generations have worked to safeguard that access, particularly for vulnerable populations, most recently with the Affordable Care Act (ACA) and Medicaid expansion. When a hospital closes, it is a failure to uphold that commitment.
Advocates in the state where this hospital is slipping away are continuing to fight for Medicaid expansion, just as IHA successfully did three years ago. That “win” was a big one for Iowa hospitals, but other threats are still out there and the financial straits hospitals are sailing today are as perilous as ever.
Right now, charting a course through the state’s rollout of Medicaid managed care tops the IHA agenda. IHA continues to monitor, analyze, respond, provide resources and gain allies on this enormous and complex issue. It isn’t going away anytime soon, no more than Medicaid, Medicare or ACA are going away.
Just like hospitals, these policy behemoths are not only a major part of the U.S. health care system, they are at the foundation of the nation’s economic and social infrastructure. They are like tectonic plates, constantly in motion as they are pushed and pulled in all directions by the forces of Congress, state and local governments, regulators, courts and countless others whose lives and livelihoods are inextricably connected to that infrastructure.
When those plates move, it can rock a hospital’s world. That’s why IHA exists. There is much at stake, many stakeholders, many challenges – and many opportunities. That is why hospital-focused advocacy and advocates are so important, to tell the hospital story again and again – as many times as it takes.
Because that story should never be allowed to end with, “It was just one hospital.”