Saturday, July 12, 2014

'Intervention: Will North Carolina Clean Up its Medicaid Program?'

Louisiana Governor Bobby Jindal:
'MCOs are good!'
Forbes magazine has an article we highly commend to you to read today if you care about the following things in North Carolina:

  • Higher teacher pay for public education
  • The University of North Carolina higher education system
  • The Community College System of North Carolina
  • Tax cuts
  • Better health care outcomes for Medicaid patients
Not necessarily in that order.

What does the Medicaid program in North Carolina, or any state in the Union for that matter, have to with public education or tax cuts?

Everything it turns out.

We have written extensively about the massive growth in the federal health care programs, Medicare and Medicaid over the past 30 years. Not only have both been the primary drivers in the reason why we have massive budget deficits in Washington, Medicaid has been the primary driver behind the reason why public school teachers have not been afforded major pay increases as well. Plus any other constraints on investments in higher education or the other major duties of the state legislature.

Medicaid cost overruns soak up all of the financial resources (your tax money) that could be used to pay for the other essential functions of state government.

(Somehow, roads keep being built and repaved throughout all this, ostensibly because it has had a 'dedicated funding source', the gas tax at the state and federal level. But even that fund is falling short now as more and more cars get more efficient and use less gas to go more miles)

In this Forbes article, you will clearly see and understand why North Carolina has to join the other 37 states in the Union and adopt a MCO model for Medicaid, or Managed Care Organizations.

Put very simply, MCOs are private corporations that come into states and then contract out with the state to manage the care of the patient. They assume full financial risk for that patient and get paid a previously-agreed upon amount of money per patient (capitated) each month to monitor that patient's health care.

When we say 'full financial risk', what that means is the private company takes that risk from the taxpayer (you) and puts it on their shareholders and financial reserves. No more running back to the legislature every summer for an additional $500 million to pay for unexpected and un-budgeted Medicaid cost overruns.

We just saw in the last post how much waste, fraud and abuse actually occurs in both the Medicaid and Medicare programs anyway. These managed care companies also take over the implementation of the bill-paying to the doctors and the hospitals so it becomes important to them that none of this money is wasted or abused in the first place.

We met Louisiana Governor Bobby Jindal this past week at a function for Thom Tillis who is running for the US Senate in North Carolina. He said the most important thing they did early in his term as Governor was to pass and implement the MCO system in Louisiana.

Listen to what Governor Jindal had to say:
'The most important thing was not that we started to save $100M per year in the State of Louisiana. The most important thing that happened that we started to see much better health care being delivered to our poorest citizens.
MCOs targeted each individual and dealt with their problems on an individual basis with assigned caseworkers and case management systems. 
We had hundreds of premature babies before MCOs that went into hospitals and cost the state Medicaid program millions of dollars. After MCOs started, we were able to effectively deal with the health problems and conditions of these pregnant mothers who were on Medicaid and help them bring their babies to full-term and much healthier birth weights and that saved the state millions of dollars each year'

Notice the direct correlation here. "Better Health Outcomes' leading to 'Saved Taxpayer Dollars'.

All of which could be spent on: A) higher teacher salaries in North Carolina this year; B) more investment in research facilities or professor pay in all of the UNC System universities or 3) tax cuts for you, the steady and beleaguered North Carolina taxpayer.

Or anything else the General Assembly wants to spend those savings on.

North Carolina has always been a leader in many ways as The New South took over from the Old South.

This is one area where North Carolina sadly lags far, far behind 37 other states which have already taken the steps towards providing more effective health care for its most at-risk citizens while saving money at the same time.

It seems to be a 'no-brainer', doesn't it?

Read the Forbes article in detail. Call and write your elected representative to tell him or her that you agree that North Carolina should move to MCOs as soon as possible.

*disclaimer: we have been working to help pass Managed Care in North Carolina for the past year but we would not be doing so if we believed it was going to cost the state more money or not help Medicaid patients receive better care

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