Point of View: A "course correction" on Medicaid
Every year, the cost of Oklahoma's Medicaid program is the result of blind luck. The vagaries of the health status of the state’s most vulnerable population are left to the whims of chance. Any number of circumstances (including a pandemic) can significantly alter the state’s fiscal responsibility for the care of its Medicaid population.
Gov. Kevin Stitt has suggested that it is time for Oklahoma to take a more measured approach to how we administer and pay for the care of our Medicaid population. Currently the state pays for service volume (fee-for-service), not necessarily quality or efficacy of service.
The governor’s plan is to move to a managed care environment. At its core, managed care is an effort to shift the risk for the cost of care for Medicaid recipients from the state’s taxpayers to an insurance company. The state will contract with one or more insurance companies to take the financial risk for the total care of a defined part of the Medicaid population. These entities will accept a negotiated fixed premium. In exchange, they will deliver all the care the recipient requires. If they can do this and keep the population healthy, then they will profit. If they cannot, then they will suffer a loss. The concept is to ensure the recipients stay healthy while reducing use of the most expensive parts of the health care system.
Here is a small example. There is an organization that acquires and stores mothers’ breast milk from donors to be used for babies whose natural mother cannot produce her own milk. However, Medicaid now cannot pay for this service because the milk is considered food and thus not covered. But in a managed care environment the premium is global, and the contractor is free to do those things such as paying for breast milk, which keeps people healthy thus reducing the cost of future care.
The concern expressed by many providers is that we have been here before and it was a disaster. This is true. A decade ago, the Oklahoma Health Care Authority did an experiment with a “managed care program.” It did not go well. Many Oklahoma doctors and hospitals were disadvantaged by slow, delayed and inadequate payments. The state eventually eliminated the program. Much of the current reaction on display is a result of these unfortunate memories.
So, what is the difference now? In my opinion, OHCA has gone to extraordinary lengths to ensure the past isn’t repeated. There are a plethora of protections and safeguards built into the request for proposal language that ensure the state’s providers will not be disadvantaged.
For the fiscal integrity of the state and for the opportunity to improve the health of its clients, OHCA needs to change course. Simply relying on blind luck is no longer prudent.
Hupfeld is chairman of the Oklahoma Health Care Authority.