Like a ship speeding toward a rocky shore, the future of Iowa’s Medicaid program will be disastrous if the state continues on its present course toward privatized care.
The Iowa Hospital Association opposes the state’s plan because it seeks to reduce Medicaid costs by restricting access to health care services and reducing reimbursement to providers through claims denials and requirements for prior authorization. Merely copying what 40 other states have pursued unsuccessfully is not new or innovative. It simply hands the reins of Iowa’s second largest insurance program to four out-of-state companies, along with a half a billion dollars of Iowa taxpayer funding.
Research of publicly funded managed care in both Medicaid and Medicare clearly demonstrates that minimal to no savings occur through the private management of these programs. In fact, spending for private management actually increases the cost of these programs in markets that are efficient utilizers of public resources. Iowa is such a market, as shown by the state’s low average cost per Medicaid enrollee and its low Medicaid administrative costs (among the lowest in the nation, in fact).
The current administration and Iowa hospitals agree that Iowa has been an innovator in its management of Medicaid. Just this year, the federal Centers for Medicare & Medicaid Services (CMS) approved a $40 million implementation grant for Iowa to continue work on the State Innovation Model (SIM) initiative, a multi-payer Accountable Care Organization (ACO) model that resulted from an 18-month collaborative plan design phase. The plan was approved by CMS and envisioned a long-term goal of advancing the significant progress made after the state expanded Medicaid to create the Iowa Health and Wellness Plan, which provided health insurance to more than 150,000 newly eligible Iowans.
The first five years of ACOs have yielded cost savings in both the private insurance market and the public sector (with Medicare) that have already eclipsed decades of experience with privatized Medicaid managed care. Moving to privatized Medicaid is a divergence that will inhibit, not improve, further opportunities for innovation.
One way Medicaid innovation is at work today is through Integrated Health Homes (IHH), which coordinate care for Iowa adults and children with serious mental health issues. Along with mental illness, these patients typically have three or more chronic health conditions, often leading to trips to the emergency room (ER) and hospitalizations, making their health care very expensive.
Managing care for such complex patients, who interact with many parts of the health care system, is always difficult and often fragmented. However, the health homes’ team-based approach addresses those issues by training providers, tracking patients and sharing information among providers, resulting in fewer ER visits and hospitalizations, reduced cost to Medicaid and a better quality of life for these Iowans.
So what is the future for these forward-looking programs under the state’s Medicaid managed care plan? The truth is, no one seems to know. The state is moving so fast and awarding contracts so quickly, those kinds of questions have been left unanswered. This is why there is grave concern among Iowa hospitals and other health care providers that these innovative and effective programs will simply be run over in the rush to implement privatized managed care.
The vast majority of Iowans are not on Medicaid, but the 560,000 who are in the program are among the state’s most vulnerable and least represented. We should all be concerned about their health care, not to mention what happens to the taxes that pay for it. There is no solid evidence from other states that privatized management will improve the health of Medicaid recipients, provide better access to care or save money.
Those in charge of the state’s fast-track plan for Medicaid privatization seem to rely on no one noticing the perils ahead. Iowans who care about their neighbors and holding our government accountable should prove them wrong.
Kirk Norris is president and CEO of the Iowa Hospital Association.