Goal: Coverage that won’t soak taxpayers

Medicaid reform is necessary. People must be persuaded to better manage their own health so the state, in return, can offer viable options for the needy. Read opinions by the AJC Editorial Board; Joseph A Parker, president of the Georgia Hospital Association; and others. Then tell us what you think.

By the AJC Editorial Board

“I don’t want to see services that have been put into place deteriorated in any kind of way.”

— Blake Fulenwider, deputy commissioner, Georgia Department of Community Health.

Georgia has the right goals for Medicaid reform. Now it’s up to state officials to do the right things.

That’s a non-negotiable necessity when it comes to revamping the program that handles health services for 1.7 million Georgians, more than a third of whom are children or aged, blind or disabled.

It’s not hyperbole to characterize this group as a vulnerable population. As The Atlanta Journal-Constitution reported this month, Medicaid’s ranks include far more than the poor and their children. Participants include the elderly who’ve spent down savings gleaned during their working years, as well as the mentally ill.

Designing and providing a reasonably comprehensive care plan for these folks may well prove less costly than relying on a disjointed assemblage of clinics, hospital emergency rooms and even jails to fashion a patchwork of under-coordinated care.

That’s not to say Medicare is cheap. It is not, carrying a fiscal 2011 cost of $7.8 billion in Georgia. That makes it tempting for policymakers and politicians alike to fixate on bottom-line costs. Left lurking in the footnotes can be the human tally in pain and suffering induced by poorly designed or administered or just plain inadequate programs.

It’s likely the revised system expected to be announced this summer will expand use of for-profit companies to manage care, as is done now for children and pregnant women.

Care providers and patient advocates worry, with good reason, that expanded use of managed care could cause patient care and provider reimbursement rates to suffer. That should not happen.

It’s the decent and responsible thing for the state to adequately fund Medicaid and ensure that ends aren’t made to meet primarily through slashing benefits provided. Smarter care shouldn’t equal cut-rate care.

Last week’s announcement that Georgia’s Medicaid program is facing a $300 million shortfall in the coming fiscal year points out the tough job ahead — one we must do well.

That’s not to argue that effective cost controls aren’t necessary. They are. Getting the best value for taxpayer dollars is as essential as achieving significant improvements in the health of Medicare enrollees.

State health officials seem to be on board with that creed, which is good. A consultant’s summary for the Georgia Department of Community Health noted that, “Healthier individuals will have more productive lives and may lead to decreased program costs.”

The temptation to overpromise and under-deliver could prove strong because the challenges facing Medicaid are many. The report prepared for DCH, for example, outlines nine possible scenarios for redesigned Medicaid programs. We face a complex set of problems involving entrenched systems and entrenched human behaviors. This can’t continue.

In the end, the state must find ways to convince people to make better health care choices and become active participants in managing their own health or that of those they’re responsible for. A current and accurate bureaucratic phrase for achieving this result is managing the “whole person.”

In return for that acceptance of personal responsibility, the state must offer viable options to care for the needy in our midst.

Getting there will be easier said than done, but it must happen. We must continue to pare back growth in Medicaid costs. Smart, coordinated care must be offered. By doing both, we should save money and improve the health of at-risk Georgians.

Andre Jackson, for the Editorial Board.

Managing care will fix what ails Medicaid

By Joseph A. Parker

Gov. Nathan Deal and state health officials are calling for reform to Georgia’s Medicaid program. Georgia hospitals agree that change is needed. The challenge is how to do it.

The reform process began last year and we applaud the governor and Department of Community Health Commissioner David Cook for seeking input from all key stakeholders, including hospitals. We are committed to working together to find the right solutions for our patients and our communities.

As recently reported by the AJC, Georgia hospitals have major concerns with the current Medicaid managed care program implemented by the Perdue administration in 2006. Three for-profit, out-of-state insurance companies were charged with managing the care of low-income women and children in the Medicaid population by keeping them healthy and reducing the need for high-cost health care settings such as hospital emergency rooms.

However, the state’s own data shows that these companies haven’t effectively managed patient care. Instead, they’ve simply ratcheted down payments to health care providers, resulting in widespread dissatisfaction among doctors and hospitals frustrated by increased administrative burdens coupled with lower payments.

Despite these concerns, it is highly unlikely that these companies — known as care management organizations (CMOs) — will be leaving Georgia any time soon. The state simply doesn’t have the resources to abandon the current model and start over. We understand that and pledge to work with the state to reduce unnecessary costs and administrative burdens for providers, increase accountability for the CMOs and ensure that Georgia’s low-income women and children receive high-quality care.

However, hospitals’ biggest concern in this reform process is a proposal by the state’s consultant to shift the rest of the state’s Medicaid population — the aged, blind and disabled — into this same managed care arrangement. Simply put, this would be disastrous for everyone involved.

Before the first patient is seen under this new system, Medicaid CMOs would carve out anywhere from 10 to 15 percent of the funds currently used to pay hospitals, doctors and nurses for their own administrative costs and profits. We estimate this would amount to $450 million to $675 million a year.

To make matters worse, placing Georgia’s aged, blind and disabled into the CMO program would trigger a federal regulation resulting in an immediate annual reduction of $250 million in state and federal funds that go to Georgia hospitals and nursing homes.

Of this $250 million, about $100 million goes directly to Georgia’s teaching hospitals, such as Grady Memorial Hospital, that have physician residency programs. These programs are integral to ensuring an adequate physician supply in the state. In addition, cuts of this magnitude will hurt Georgia’s economy. Fifty percent of every dollar hospitals receive for providing care goes to salaries and job creation.

The loss of hundreds of millions of dollars annually will hurt not only our patients, but our employees and communities.

Finally, the aged, blind and disabled population has multiple chronic conditions that require true care management, and we believe that medical providers — not out-of-state insurance companies — have the experience, expertise and compassion to improve health outcomes for patients and achieve long-term savings through improved care management. Furthermore, the infrastructure is already in place to make it happen.

Thanks to Gov. Deal’s leadership and commitment to improving Georgia Medicaid, we have the opportunity to serve as a national model in creating an efficient, effective Medicaid program. But to do that, we must truly focus on managing care and keeping people healthy — not merely cutting payments to health care providers.

Joseph A. Parker is president, Georgia Hospital Association.

On the record: ‘Consider the options for redesign’

From the Georgia Department of Community Health’s “Medicaid and PeachCare for Kids Design Strategy Report”:

“States are increasingly looking towards new and innovative ways to decrease costs, focusing on providing benefits more effectively with greater administrative efficiencies rather than focusing solely on traditional cost containment strategies.”

“Factors outside the control of DCH, including health care reform, will also shape the future of Medicaid and PeachCare for Kids. For example, Georgia potentially faces major growth in Medicaid enrollment. These factors may create significant change in the Georgia health care marketplace and in Georgia Medicaid.”

“DCH is now ready to ‘take stock’ and consider options for redesign. There are opportunities to improve quality of care for members, contain costs, and make budgets more predictable. When designing the new Medicaid programs and services, there are opportunities for Georgia to address some of the current provider and member frustrations.”

“For Georgia to progress to the next stage of evolution, it will need to employ more rigor around contract monitoring, oversight and accountability to achieve successful outcomes and assure value. Monitoring contracts under a value-based purchasing model shifts the focus from monitoring structures and processes to monitoring outcomes — or measuring the value of the services that Georgia has purchased.

“The physician shortage must also be considered in any redesign effort. This includes both how the redesign itself can help to assure access for members despite the shortage and how the redesign might help to reduce physician workloads and incent physicians to participate in Medicaid and PeachCare for Kids.”

“Medicaid is one of the most expensive public programs in Georgia. Given limited budgets in a challenging economy, the State must have a Design Solution that is cost-efficient and has budget predictability.”

14 comments Add your comment

Can't afford it

June 17th, 2012
6:01 pm

i am one of many without insurance who will now be served by Medicaid starting in 2014 following Heath care reform. hope you guys are ready!


June 17th, 2012
4:31 pm

yuzeyurbrane @ 4:07 pm – I am no position to take a stance on either side, but what I do know is that Georgia DHS has gotten better oversight over such programs and your issues may not be as bad as YOU claim. However, the issue of Provider Fraud enforcement and oversight does need further expansion and strengthening for sure!


June 17th, 2012
4:07 pm

Bernie, I defer to your differentiation of health care providers outside the Perimeter. It sounds logical. However, I have excellent sources of info re my Emory Healthcare example. I do acknowledge that Emory pushes up its Medicaid treatment numbers by having its residents and some other doctors largely staff Grady which is certainly better than many other health care providers. However, I stand by my statement re games by which it claims to be seeing more Medicaid patients at its own facilities than it really does. It is not as bad for Medicare patients but similar games are starting with them as well. It is like some colleges that like to say that 99% of their students are on scholarship but don’t tell you that some of the scholarships are just a few hundred dollars a year. Show me the numbers of how many Medicaid patients are accepted and rejected and if rejection is only a rare occurrence, I will be pleased to render a mea culpa.


June 17th, 2012
2:35 pm

catlady @ 2:06 pm – Yes I agree Patient abuse does happen as with anything else. A similar example can be sighted by any Insurance Payor around the Nation even those who have coverage. Despite the occurrence we cannot truly justify abolishing a process based on a few bad apples. Whats worst than that and pretty much goes unnoticed and unpunished is Providers of services billing and getting paid for services that the billing provider never performed. There is far more offenses of Fraud and money spent on that offense in the Millions of dollars, than the example you just espoused upon.