Human Services Commissioner: A checkup for managed care

Commentary

As dutiful Minnesotans, we regularly trek to our doctors for checkups.

We learn how we measure up, whether our blood pressure, weight and cholesterol are in healthy ranges. If there are new best practices to treat a chronic condition, we hear about those.

Equipped with this information, we do our best to follow our doctors' advice to improve our health.

It's also time for a checkup for the contracts between Minnesota's health plans and our state.

After all, we spend almost $3.3 billion each year for more than 524,000 people enrolled in managed care plans through Medical Assistance -- Minnesota's Medicaid program -- and MinnesotaCare.

How are we doing?

There is a lot of information but no one place to turn. Minnesota is a state that provides a simple "report card" for nursing homes.

We should be able to generate a readily understandable record of the dollars spent and outcomes achieved by health plans funded by our tax dollars. Achieving this transparency will be a priority for the Department of Human Services this year.

But to get better value for our state dollars, we must not merely review how we pay for care; we must actively explore new ways to pay for it.

Just as we, as patients, want to hear about cutting-edge best practices to keep our bodies healthy, so our state needs to move to the forefront when it comes to how we pay for care so we can keep our state finances healthy.

For instance, today the price for our contracts with those who provide care is primarily based on past experience.

We must supply incentives and a new model for delivery of high quality, cost-effective care. We at the Department of Human Services are committed to getting the best value for Minnesotans.

Below are a few of the payment reform ideas we are pursuing to achieve this. These concepts, as well as a proposal to limit health plan administrative costs, are outlined in Gov. Mark Dayton's budget, which was released Tuesday.

Under what are called accountable care organizations, or ACOs, physicians, hospitals and other health providers assume responsibility for the quality and cost of health care for a group of people.

In return, they have the flexibility to design care delivery in new and innovative ways and, if they meet quality standards, to share in cost-savings.

This will encourage them to pursue best practices and incentivize them to continually evaluate their performance and look for ways to improve.

Today, if a health plan fails to meet agreed-upon standards of care, it is at risk for 5 percent of its contracts.

We should examine increasing this percentage and also consider "gain-sharing" agreements where the plans and the state can divide shared savings if quality measures are met.

Implementing greater consequences for underperformance and incentivizing better performance will lead to higher quality.

For a number of years, we have used nonprofit health plans in Minnesota to help deliver care to many of our clients. While this arrangement has brought advantages to the way our services are delivered, we need to reexamine whether this provides the best value for Minnesotans.

As we look forward to negotiating future contracts, we plan to introduce an element of competitive bidding into the process. This competition will increase accountability and result in better deals for the state.

But our contracting program has remained relatively unchanged while the private sector has undergone dramatic shifts. Part of that stagnation is due to federal restraints.

But we can and will work with the federal government to waive some of those requirements. After all, calls for change have come from those on both sides of the political aisle, from patients and most recently even from several managed care organizations themselves.

It is time for that checkup and true payment reform for two of our state's most important safety net programs.