Health care costs for poor draining Georgia budget

ATLANTA — The Deal administration is trying to plug the big money drain in government: health care for the poor, especially the old and disabled.

 

The program is gobbling up more and more of the state budget, crowding out other state services. The possible savings are estimated in the hundreds of millions of dollars.

The elderly only make up 8 percent of the population covered by Medicaid, the program for the poor. Those 8 percent, though, generate 20 percent of the cost. The disabled are another 15 percent of all those covered, but they use 44 percent of the money.

On the other hand, the generally healthy children and adults constitute 72 percent of the population getting taxpayer-funded medical care but need only 36 percent of the expenditures.

Gov. Nathan Deal has lived with these numbers for years as ranking member of the Health Subcommittee in Congress before his election as governor. He assigned Community Health Commissioner David Cook to redesign the programs that provide health care to the poor as a way to rescue taxpayers while also improving the quality of care. Removing administrative headaches and safeguarding the livelihoods of doctors and hospitals were secondary goals.

“We constantly should be challenging ourselves to be the best government we can be,” Cook said.

What Cook may do has medical providers and advocacy groups nervous.

He started by hiring a national consulting firm to study Georgia’s Medicaid program and the PeachCare for Kids spinoff for children. It also reviewed what other states do.

It recommended that Georgia expand to the elderly and handicapped the same type of plan that the generally healthy people in the programs get. That plan is called care management, and it’s administered by three private, out-of-state companies called care-management organizations.

The CMOs are supposed to do more than handle claims paperwork. They are paid a flat fee for every person enrolled in their network, and the way the companies are supposed to earn their profit is by steering their patients to clinics and private physicians instead of expensive emergency rooms.

The consultant, Chicago-based Navigant Consulting Inc., argues that the elderly and handicapped would benefit even more from the intense interaction of care management because they’re sicker and need treatment more often. They might even avoid the need for some treatment if a CMO reminds them to take their medicine or get preventive checkups, they suppose.

“Nearly all studies demonstrated a savings from the managed-care setting,” the authors wrote. “… Savings from Medicaid managed care can be significant for traditionally high-cost enrollees.”

Redesign needed

In the five years since Georgia shifted to CMOs, taxpayers have enjoyed a slower rise in medical costs than the national average. The providers say that cost came out of their pockets because the CMOs simply didn’t pay them what they were owed.

“The only thing we have seen in the five years is they have been effective in cost management which they’ve done by cutting providers,” said Kevin Bloye, vice president of the Georgia Hospital Association.

The association estimates providers lost $1.1 billion since 2007.

It agrees a redesign is called for. It recommends one based on what North Carolina does by using physician-run, nonprofit administrators rather than CMOs. All of the doctors treating the same patient there share medical records.

Cook hasn’t rejected the suggestion, but he said it’s hard to compare North Carolina with Georgia because the states use different ways of keeping statistics.

“I would argue we are pushing quality up in Georgia,” he said.

The Medical Association of Georgia is formulating its own response to the consultant’s report within the next week. The Hospital Association’s board meets this week to determine its next move, too.

If the providers are concerned about expanding care management to the elderly and handicapped, the advocates for those groups are apprehensive as well.

“There are questions about how well managed care may work for populations with complex health needs, and the Department [of Community Health] should work with advocates for these vulnerable Georgians to ensure any redesign system does not disrupt or impede care for this fragile population,” said Cindy Zeldin, executive director of the advocacy Georgians for a Healthy Future.

She said the existing system could be improved for those already in managed care.

No decision yet

The elderly and handicapped weren’t included in managed care to begin with because vigorous advocacy highlighting the “vulnerable” and “fragile population” convinced policymakers at the time not to take on a protracted political battle with an organized group that is emotionally sympathetic to voters. Disability Day brought hundreds of handicapped individuals to rally on the Capitol steps Thursday in the chilly rain.

 On the other hand, the CMOs naturally argue in favor of it and its expansion.

 “By doing so, Georgia would simply be following national trends in managed care and acting in the best interest of the taxpayers who foot the bill,” said Derrick Dickey, spokesman for the three CMOs.

 The commissioner says he hasn’t made up his mind. His timetable calls for accepting public comments until the end of the month. His agency began last week working in task forces to sift through the comments and the consultant’s report for a conclusion. Transition would begin in 2014.

 His decision could have a major impact on taxpayers’ pocketbooks and the lives of thousands of poor people whose health will be governed by it.

 

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