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McCrory approach not best way to innovate on Medicaid

By Adam Searing
Special to the Observer

Gov. Pat McCrory has proposed radical privatization for North Carolina’s award-winning Community Care Medicaid program by selling off segments of Medicaid to private health insurers. Aside from McCrory’s dubious rationale, many people are confused as to why he would propose this change on the same day North Carolina’s conservative U.S. Sen. Richard Burr gave a national award to N.C. Medicaid for significantly lowering costs while delivering extremely high-quality care.

McCrory’s privatization scheme has already been tried in multiple other states and follows a well-worn path: private companies come to the state and bid to provide health services for some parts of the Medicaid population. The companies typically compete to serve moms and kids on Medicaid – the largest, healthiest, and least costly group to cover. For some reason outside investors don’t see much of an upside in providing care to aged and disabled people on Medicaid. This is the smallest group on Medicaid but the largest consumer of costly health services – costing around 63 percent of the state’s Medicaid budget. It’s hard, expensive and, by the way, our moral duty as a society to provide quality care to our lowest-income older adults and people with serious disabilities. That’s why private industry would rather let the government handle that difficult part of Medicaid while they get the healthier and more profitable parents and kids.

Selling off part of the state’s Medicaid program to out-of-state for-profit companies is not simply a bad idea from Pat McCrory’s administration, but it also exposes the political calculation and resistance to creative Medicaid reform prevalent among the governor and his top health officials like Department of Health and Human Services Secretary Aldona Wos and Medicaid director Carol Steckel.

Building on Community Care

Real, innovative solutions to improving our entire health care system and not just our Medicaid program are already being tested by the state’s Community Care program. Interest among private insurers, businesses and the state health plan in Community Care’s ability to deliver higher quality care at a lower cost has resulted in a partnership project in seven rural counties. Private insurer Blue Cross Blue Shield of North Carolina and the State Health Plan are working with Community Care to use the successful health networks developed by Medicaid to deliver similar higher quality care to privately insured patients and state plan enrollees. And what small business wouldn’t like to lower its health care costs by using the excellent networks of primary care practices connected with the state’s top medical specialists?

Typically private industry wants to move toward new solutions based on evidence of effectiveness and not just good wishes. Luckily, there is plenty of independent evidence that the Community Care program is saving money and delivering higher quality care. Respected national consulting firms from Milliman to Treo Solutions have documented Community Care’s hundreds of millions of dollars in taxpayer savings and the significant positive health effects resulting from better informed and better coordinated care.

If Gov. McCrory really wants to talk innovative Medicaid reform, this is where he should be starting. What about a statewide partnership with Blue Cross where small businesses are given the opportunity to access Community Care health networks at a substantial premium savings over a traditional health plan? We could combine the power of the private sector with the innovation already available in Community Care to enable our physicians to focus on caring for the patient – whether they are on public or private insurance – and use Community Care’s approach of providers working closely together while focusing on quality to save money and improve care for everyone. Success would likely encourage interest from large self-insured employers as many bigger N.C. companies take a hard look at their own health costs.

Admittedly this would require some lateral thinking. And unfortunately the governor missed a huge opportunity to jump-start this sort of reform when he signed a bill this year rejecting billions of dollars in federal money for expanding Medicaid to over half a million North Carolinians. The federal dollars could have been used not only to expand coverage but also to simultaneously create a new statewide partnership that would coordinate higher quality care while lowering costs for taxpayers and private businesses.

Our health care system serves hundreds of thousands of patients – both privately and publicly insured – every day. The real solutions to better quality and lower costs don’t come from a narrow focus on just the public sector or just the private sector but when we work together to make our entire health system work better and lower costs for everyone.

Adam Searing is director of the N.C. Health Access Coalition.
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