December 19, 2014

Recently, we explained how North Carolina had a successful Medicaid managed care program in Mecklenburg County back in the 1990s that saved money for taxpayers.

Medicaid managed care allows private insurance companies and healthcare managers to compete for a chance to manage the government’s Medicaid program using a fixed price contract that shields taxpayers from cost overruns. That system seemed to be working when it was tried.

In fact, reporting on a 1998 research study from UNC Charlotte , the Charlotte Observer wrote ”Moving Mecklenburg Medicaid recipients into health maintenance organizations is saving taxpayers about $16.5 million a year and providing patients with better access to doctors, according to a preliminary study by UNC Charlotte researchers. “We were really shocked to see these kinds of savings,” said Nancy Schoeps, a senior lecturer in mathematics at the university and one of the co-authors of the study.” (8/28/98)

Besides savings for taxpayers, researchers found shorter waiting times for care and greater patient satisfaction under the Medicaid managed care plan than before.

With budding progress in Mecklenburg County, the state was supposed to go statewide with the new plan. Instead, the reform was snuffed out.

The Charlotte Observer reported ”An HMO covering 14,000 Medicaid patients in Mecklenburg County has notified the state it plans to pull out of the government program. UnitedHealthcare told the state it will leave Medicaid when its contract expires in late September, state and local officials said Friday. In their letter to the state, UnitedHealthcare officials said they have tried for nine months to persuade state officials to allow them to expand their Medicaid business into other counties. “The state has made it clear it plans to move forward and establish a different statewide model of care for its Medicaid program,” they wrote.

Originally, it was to expand to other counties, but never did. HMO officials said it wasn’t financially viable for them to manage patients in only one county. The Wellness Plan, an HMO owned by Carolinas HealthCare System, stopped serving 29,000 Medicaid patients in Mecklenburg last year because of its costs. UnitedHealthcare has participated in the project since 1999. Larkin said she couldn’t provide information on the company’s profit or losses in Mecklenburg. “I’m very disheartened,” Jacobsen said. “United’s done a great job for us [Mecklenburg County]. The program works. But the state obviously is not interested in replicating the program.” (8/31/02)

While most of us think competition is good, the Medicaid bureaucrats running the show at NCDHHS apparently prefer a closed, insular system for Medicaid . The Medicaid bureaucrats and the medical industry have pushed North Carolina into one option called Community Care of North Carolina.

CCNC is a network of nonprofits snagging $200 million a year from the state to channel Medicaid recipients to doctors and manage cases. The goal is controlling costs by keeping patients healthy and out of expensive ER and hospital care. All medical services are provided fee for service. The more a doctor or hospital does, the more they can bill.

Recent information indicates a drop on quality measures at CCNC . For example, ER visits are up, not down, and that isn’t supposed to happen. Ballyhooed cost savings are also questioned.

But CCNC really isn’t the issue. Competition is. Why not follow the lead of Senate reformers who want CCNC to compete with managed care so taxpayers get the best deal?

Managed care competition worked before the Medicaid industry killed it to grab more taxpayers money. Bring back competition.