Why managed care is not the answer for North Carolina

For over two years now, the North Carolina Medical Society has unequivocally opposed corporate managed-care organizations running North Carolina’s Medicaid program. We have proposed an alternative model and are working with other stakeholders to fashion a detailed plan to present to legislators as they consider how best to reform Medicaid this session.

Legislation recently introduced in the N.C. Senate seeks to “reform” the system by turning it over to managed-care companies. We understand the impulse lawmakers must have to simplify the complex issues surrounding this program and its impact on the state’s budget. But handing the managed-care corporations a check to take on Medicaid is not the answer. It isn’t reform. It’s simply wishful thinking.

Let’s examine what has happened in states like Florida, Texas, Arizona, Maryland and others, where legislators believed they had the answer to the Medicaid “reform” question in outsourcing their Medicaid programs to managed-care organizations.

A nationwide listing of state-imposed sanctions on large multi-state managed-care organizations between 2010 and 2013 found 35 individual state-imposed fines and/or sanctions against companies like Centene, Molina and Wellpoint among others. The violations prompting the sanctions included poor quality of care, failure to pay claims, failure to meet standards for preventive care and prenatal care, patients unable to access medications and improperly denied services. No doubt legislators winced when they issued the sanctions, since they had placed their trust in these companies and hoped they would “reform” the Medicaid system in their state.

Kentucky has struggled since it privatized its Medicaid program through managed-care companies three years ago. Legislators there have dealt with ongoing patient and financial issues. One managed-care organization dropped out and sued the state for damages, while the others, losing money on the program, renegotiated their contracts.

As Sen. Julie Denton, a Louisville Republican who chaired Kentucky’s Health and Welfare Committee and held hearings on the issue, told The Washington Post in 2013: “They have let these health plans run amok because they want the savings and they don’t want to do anything to jeopardize that. It’s all about the money. It’s not about patient care and access to care.”

A more recent example is found in Louisiana where a legislative audit in December 2014 found the state’s Medicaid expenses increased by more than $900 million since it moved to managed care in 2012. The predictability and savings anticipated by Louisiana lawmakers are not a reality three years down the road.

So, how do we propose to truly reform the system? We have always advocated a homegrown solution, led by health care providers. Doctors, nurses, hospitals and all the specialists and community supports must work as a collaborative team. These are the people who live and work in the community and know best how to care for patients as well as how to eliminate the inefficiencies and waste in the system. Making teams of providers accountable for the quality of care delivered to a specific population of patients is a massive change in how health care is delivered and paid for, and it won’t happen overnight. Truly meaningful and lasting change takes time.

But the changes we’re proposing aren’t something completely new and untested. The federal government, through its Medicare Shared Savings Program, has provided valuable information on how to move to a provider-led, value-based system. Already in North Carolina, 18 health care groups are serving patients as part of this Medicare program. Altogether there are 28 accountable care organizations in our state leading the way to this new type of health care, which serves the patient first and eliminates waste and inefficiency.

The NCMS recently called together representatives from all the organizations that would be affected by Medicaid reform – hospitals, nurses, pharmacy, mental and behavioral health, long-term care, disability, assisted living. These groups have a common interest: to find an alternative to managed care. We hope that legislators will listen to the unified voice of health care in North Carolina. We have an opportunity this year to enact something unique, that other states will look to as true reform. Let’s hope legislators can give a homegrown approach a chance to blossom here.

Robert W. Seligson is CEO of the North Carolina Medical Society.