"Fixing" a Medicaid System That Isn't Broken

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The News and Record is out with an editorial highlighting a new report from the NC Auditor that found the current Medicaid delivery system is working just fine, and saves taxpayers money. At the same time, lawmakers in Raleigh are weighing a radical overhaul of the system.

From the editorial,

The legislature has gotten a favorable report about the system that delivers care to most Medicaid patients, just in time to kill it.

N.C. Auditor Beth Wood reported last week that Community Care of North Carolina, which manages medical services for 1.4 million Medicaid patients, saves money and improves health outcomes. Yet, legislators are working on a plan to replace this model, instead contracting with private managed-care companies. If it were up to the Senate alone, something like that would have been created a year ago.

It was the legislature itself that asked the auditor to look into the effectiveness of the current structure. It should have waited for her findings before moving in a different direction — and possibly making a mistake.

The Community Care model puts primary care physicians in charge of patients. They coordinate services among different providers with the goal of keeping patients healthy rather than treating illness. The North Carolina Academy of Family Physicians supports this approach.

It seems to pay off, according to the auditor’s report, compiled with the help of an independent medical researcher. It documented significant decreases in hospital admissions and fewer hospital readmissions, fewer emergency room visits for asthma and fewer diabetes-related hospitalizations — all leading to cost savings.

The report looked at data from 2003 through 2012. Ironically, Gov. Pat McCrory came into office in January 2013 talking about fixing a “broken” Medicaid system. Indeed, the N.C. Department of Health and Human Services was behind schedule and over budget in trying to install a computerized billing system. But problems with delivering medical services were likely exaggerated for political reasons. McCrory cited the “broken” system as justification for refusing to expand Medicaid eligibility under the Affordable Care Act.

Some lawmakers still aren’t convinced that the system is working as well as it could. A key senator, Ralph Hise (R-Mitchell), said savings tailed off in the last five years covered by the study. Yet, as an operational system improves its efficiency, further gains become more difficult.

The question is whether the legislature will introduce a new way of providing Medicaid services that works even better. The Senate wants to make flat payments to managed-care organizations, holding them accountable for outcomes and any cost overruns.

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