Viewpoint

Two opposing views on N.C.’s Medicaid reform

North Carolina’s legislature has overhauled the state’s Medicaid program, which serves nearly 2 million people.
North Carolina’s legislature has overhauled the state’s Medicaid program, which serves nearly 2 million people. tsumlin@charlotteobserver.com

Yes: New system puts patients first

Joseph Kyzer is the Communications Director at Americans for Prosperity North Carolina.

Patients’ healthcare came first in the Medicaid reforms passed last week by the North Carolina General Assembly. The legislation begins the process of improving medical options and fixing the financial ruin of a once-broken healthcare program.

Between 2008 and 2013, North Carolina’s Medicaid system was an unmitigated bureaucratic disaster. The program billed billions in cost overruns – including more than $500 million on a provider payment platform that launched years behind schedule and still failed to provide physicians timely reimbursement. The executive director of the platform’s development was later proven to have falsified overtime payments to fellow employees.

Cost-effective healthcare that is customer-focused is critical to patients as well as the sustainability of our public programs, and these General Assembly leaders were tasked with a monumental Medicaid turnaround. By declining to expand Medicaid and instead improving its efficiency, the current conservative majorities in Raleigh have saved their constituents hundreds of millions more in unexpected liabilities since taking control.

Until 2013, the dizzying deficits of North Carolina’s Medicaid program burdened our state’s entire bureaucracy by robbing funds from other cash-strapped services like education and public safety. Today the program is fully funded and on a sustainable path, thanks to a budget that provides billions in tax relief, invests $400 million more in K-12 education per year and raises teacher pay again.

The source of Medicaid’s expensive and unpredictable cost overages is its fee-for-service reimbursement system that rewards the volume, not quality, of healthcare performed by providers. All citizens seeking a better approach to healthcare should agree that patient outcomes matter more than the sheer number and cost of procedures billed to one’s coverage. Public programs like Medicaid should reflect and direct services towards this renewed goal of improved patient well-being.

Successful outcomes for Medicaid mean eventually moving its enrollees off public coverage to a private or employer-provided insurer that offers quality, reliable services not limited by government rules and cost constraints. In a study published last month, the left-leaning Annie E. Casey Foundation found child poverty dropped in North Carolina between 2013 and 2014. These are real results of policy reforms that empower people, not government programs, to control their care.

While misguided Medicaid expansions cripple state budgets in Ohio and Arkansas, North Carolina enjoys a $400 million surplus, billions more in tax relief and a top-10 slot for job creation nationwide.

Constituents should be encouraged by this General Assembly’s consistent approach to improving core services while investing in critical government functions with a balanced budget that provides tax relief back home. Our leaders are commended for their commitment to taking taxpayers off the hook for unpredictable, expensive Medicaid costs and replacing the failed system with a streamlined approach to providing poor families a helping hand.

No: CCNC has worked well

Jessica Schorr Saxe is a Charlotte physician. She is chair of Health Care Justice-NC.

Medicaid is important. Insuring almost 2 million North Carolinians, it improves health, saves lives and promotes social mobility by reducing financial insecurity. And it occupies a large part of the state budget.

Obviously it should be managed by an entity that is innovative in promoting quality, efficiency and cost savings.

Community Care of NC (CCNC) has provided that since the 1990s. Rooted in the communities it serves, it is a public-private partnership with extensive networks of providers and health organizations. In addition to delivering care, they collaborate to improve the health of individuals and populations by examining data, developing interventions and tailoring them to fit the state’s Medicaid population.

The stated intent of the recently passed Medicaid transformation bill is to “provide budget predictability for the taxpayers of this State while ensuring quality care to those in need.” It will turn Medicaid management over to out-of-state commercial managed care organizations, as well as some regional contracts with provider-led organizations.

The alleged rationale is that the Medicaid budget has been unpredictable and escalating due to poor cost control in the current system. However, the facts are:

1) In an audit of CCNC directed by the General Assembly, the state auditor showed savings of about $312/person/year, or more than $400 million annually.

2) An analysis by actuarial firm Milliman, Inc, showed CCNC saved the state almost a billion dollars between 2007 and 2010.

3) As Republican Rep. Nelson Dollar noted in debating the bill, North Carolina ranks 42nd in cost per Medicaid patient, and the cost per patient has gone down in the past four years.

The widely publicized Medicaid overruns of the past few years were not due to CCNC failures but to repeated underbudgeting by the legislature. Claim costs were actually level over this period.

Commitment to the health of patients and communities has resulted in quality improvements. The state auditor’s report notes decreased inpatient admissions, decreased prescription drug use and decreased emergency room visits for asthma. CCNC’s quality metrics compare favorably to top health plans nationally in managing diabetes, asthma and heart disease.

No wonder it is popular with primary care physicians – of whom about 90 percent participate.

Medicaid reform, as written in the bill, creates a convoluted system that will produce administrative burdens for clinicians. Such corporate bureaucracies cost money and alienate providers. We can expect greater expense and less access to care.

North Carolina would have been better off without this bill. Two things could mitigate the damage.

The first is expanding Medicaid, which would cover half a million North Carolinians and benefit our economy – and make the federal government more likely to approve the new plan.

The second is to preserve a major role for CCNC. Physicians are expected to make evidence-based decisions. So, too, should the legislature examine the evidence and continue a substantive role for this homegrown popular health network that exemplifies collaboration, caring, quality and cost-effectiveness.

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