Editorial: Keep eye on health care experiment

  • Article by: EDITORIAL , Star Tribune Editorial Board
  • Updated: August 20, 2011 - 9:17 PM

Scrutiny needed as state shifts more into managed care.


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One of the state's most influential special interests -- Minnesota's nonprofit health plans -- faced an unprecedented level of scrutiny this year during the legislative session.

But after serious questions were raised about how much money the plans made off the taxpayer-funded medical assistance programs for the poor, elderly and disabled, lawmakers at the session's end opted to give them even more of the state's health care business.

About 115,000 of the sickest and most vulnerable patients who are currently in a state-administered plan will now be automatically enrolled in privately run managed-care plans next year, unless they choose to opt out. About half are expected to do so.

This is a sweeping new health care reform -- one that many other states are implementing -- and it did not get the airing that it deserved during the legislative session.

The intentions behind it are good -- improving medical care while saving money. But Minnesota cannot afford to assume this will happen, which is essentially what it's done.

There's been no deep analysis of a pilot program begun almost two decades ago to see if managed care improved quality and held down costs for the healthier enrollees it already has.

This is now a $3-billion-a-year business in Minnesota, and recent financial results suggest that public managed-care plans often are more profitable for insurers than are their commercial plans for private consumers.

The state should monitor results more carefully now that it's steering about 57,000 new high-health-needs patients into managed care, and doing so with vague expectations instead of specific requirements for improved care.

It's not clear which of the state's big health plans -- UCare, Medica, HealthPartners and Blue Cross Blue Shield -- will want to handle plans for this challenging new population, though UCare, Medica and county-based plans are expected to participate.

Those that do should be applauded for taking on these patients, particularly after UCare recently closed a well-liked program for high-needs patients because it lost money.

Plans that step forward should be given time to work and learn from these patients, but the state will need to determine whether they delivered.

State Sen. David Hann and Rep. Jim Abeler, Republican lawmakers who advocated for this shift, promised that level of scrutiny during an interview with a Star Tribune editorial writer. State Department of Human Services (DHS) officials also vowed to keep a close watch.

Still, there are no safeguards in the legislation to ensure this. More details about the quality and cost benchmarks, and the time frame for analysis, are needed.

Lawmakers in particular should have delved deeper into this shift's potential savings this session. Although a state fiscal analysis predicts savings of up to $40 million over the next biennium, the analysis is also riddled with caveats about uncertainties.

Care coordination and an emphasis on prevention -- managed-care hallmarks -- could wind up being more costly initially than the current fee-for-service plan but deliver longer-term savings.

A look at state statistics offers another reason for caution about savings from shifting these high-need patients.

A DHS analysis done at the Star Tribune's request compared average monthly enrollee costs for public patients in managed care vs. those in the state-run fee-for-service plan. Fee-for-service is widely thought to be more costly.

But over the past five years, the average monthly cost per enrollee has declined slightly each year (-0.24 percent) while managed care has gone up 3.94 percent annually with a patient group generally less expensive to insure.

The Minnesota Council of Health Plans said managed-care costs increased because of changes in benefits -- behavioral services coverage was added -- and because more people with disabilities enrolled.

However, the state plan bent the cost curve more with a sicker population while covering the same services.

It's worth noting, too, that another reason for the difference is that the Legislature has cut provider reimbursements in the state program, but federal "actuarial soundness" guidelines likely protected payments to the plans during budget cuts.

Reports done elsewhere vary on cost savings from shifting this population into managed care. Minnesota is entrusting many of its most vulnerable citizens to the state's respected health plans.

Scheduling a checkup to see how the plans and the patients are doing is entirely reasonable.

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    Nearly 60 million Americans, roughly one in five, get health or long-term care through the Medicaid program, which is paid for by the federal government and the states. About 70 percent of people enrolled in Medicaid get some or all of their services through a managed-care plan. About 61 percent of the state's Medicaid enrollees, a group that skews younger and healthier than the state-administered plan's population, are enrolled in managed care.

    From Minnesota's Healthcare Imperative report and the Kaiser Commission on Medicaid, February 2010 report

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