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Editorial: Hennepin County needs HMO review

Bailout is a signal that times have changed.

Last update: May 1, 2008 - 6:32 PM

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TO BE DETERMINED

"We have a complicated set of variables to consider. If we get out, what does that cost us? Could we sell the plan? We have to ask if this [HMO] is a business in which the county can remain viable.''

Gail Dorfman, Hennepin County commissioner

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Recent news of a multimillion-dollar financial setback gave Hennepin County a very good reason to reexamine whether it should be in the health insurance business.

Several weeks ago, commissioners transferred $6 million in emergency funds to bail out Metropolitan Health Plan (MHP), the county's insurance plan for the needy. Board members had no choice because state law requires such plans to maintain a certain level of reserves.

Now the county has wisely hired a consultant to review the program. That approach makes sense. Commissioners need a fresh, outside evaluation to help determine the program's future. MHP has been successful during most of its 25 years, but the insurance landscape has changed. It's the right time to reevaluate the plan and its place in the current health care market.

In 1983, the county established the nonprofit, state-certified HMO to give traditional patients of Hennepin County Medical Center (HCMC) and community clinics access to managed-care health programs. Many of those patients receive health benefits through government programs such as Medicaid, Medicare or General Assistance.

MHP serves residents in several metro-area counties, and it was once one of the plans offered to county employees. It has been uniquely positioned to coordinate care for clients who use other county services and was among the first HMOs to have interpreters for non-English-speaking patients. In addition, the plan often reported multimillion-dollar surpluses that were pumped back into the county for health and health-related services. Its annual budget is about $158 million. Until recently, it paid for itself and then some.

MHP got into financial hot water this year, according to its director, because of antiquated billing and payment methods. Computer systems have not kept up with the new technology necessary for processing complex medical cases. As a result, some providers were overpaid while others were underbilled. When those billing snafus are resolved, it's hoped some of the $6 million will be recovered.

Yet, even before the current budget problem, some county commissioners had questioned whether the plan could remain competitive. With slightly more than 20,000 clients, MHP is one of the smaller plans in the metro region, making it tough to compete with larger private insurers.

For now, county commissioners should keep an open mind. They need to determine if clients would be equally well served by other plans. They need to weigh the value of the county's role in coordinating integrated care across social service programs. And they need to determine whether the HMO will continue to cost them more in the future.

Armed with that information and the consultant's report, they'll be able to make the right decision about the future of MHP.

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