Age of the Geek

The joke's on all of us 
     Last Saturday was more than just April Fool's Day. It also marked the one year anniversary of the state's transition to privatized Medicaid.
     For those of you that have forgotten, two years ago Governor Terry Branstad decided that Medicaid spending had gotten too high and, rather than figure out ways to improve efficiency or reduce fraud, ordered that the administrative burden of managing Medicaid for a half million vulnerable Iowans be passed off to for-profit companies.
     The basic idea is simple. If Medicaid spending is a problem, make it somebody else's problem. Three Managed Care Organizations (MCOs) ultimately ended up with their own slice of the Medicaid pie, assuring everybody that they could deliver better service for less money while still turning a profit.
     To the surprise of absolutely nobody, that didn't happen.
     Instead, the "cost savings" ended up being exactly what you would expect, fewer services offered to patients and less compensation offered to providers.
     On the patient's end, they went from a world where Medicaid was Medicaid to one where they had to compare and contrast three different provider networks, hoping, with no guarantee, that whatever services they needed most would be covered under one of the three. The task of organizing their care went from a local case manager to one employed by the MCOs, creating an unavoidable conflict of interest.
     As for providers, in my own research I found very few that would describe working with the MCOs as a better experience. For smaller providers, the change was often neutral at best. For larger ones, unpaid or underpaid services have created major financial issues. There are no shortage of providers who have had to deal with re-filing claims and hiring new staff to process the added paperwork. And even when all the T's are crossed and I's dotted providers are still not getting paid what they're owed.
     Strangely enough, the MCOs themselves are also reporting "catastrophic" financial losses. The state has already given them tens of millions in additional money to help offset the start-up costs, but it hasn't been enough. Not only are MCOs expected to ask the state for more money, they are simultaneously trying to convince service providers to accept less money for their services. AmeriHealth Caritas recently entered into a very public disagreement with Mercy Health Network, threatening to cancel their contract if they aren't able to renegotiate for a lower reimbursement rate.
     If they can't come to an agreement by July 1, AmeriHealth Caritas' 220,000 Medicaid recipients could find themselves unable to get service at one of the state's largest healthcare providers, forcing these people into the hassle of either switching MCOs or getting their healthcare elsewhere.          If the loss of Mercy strains AmeriHealth Caritas' network enough it's even possible the MCO may be forced to back out of the state all together.
     Or they may simply cut their losses and bail out anyway. With the three MCO's reporting roughly $500 million in combined losses after the first year, Iowa may find itself without any Medicaid providers at all. And there is no contingency set up for that scenario.
     Fortunately, the state will come to the rescue… by running to the feds for help. Ironically, Obamacare is here to save Governor Branstad's Medicaid experiment by entering it into a "risk-corridor" agreement, which allows the state to tap into a large pool of federal money in the event that Medicaid expenditures overtake income.
     The state will have to chip in $10 million, but that's small potatoes compared to the $225 million the feds are projected to pay out to cover MCO losses.
     So, to his credit, Governor Branstad did save the state some money, and all it cost us was confused and underserved Medicaid recipients, frustrated and underpaid Medicaid providers, three MCO's that aren't even making a profit, and $225 million in federal tax dollars.
     April Fools.
     Travis Fischer is a news writer for Mid-America Publishing and wonders if Gov. Branstad really just wanted the feds to pay for healthcare. Does that mean he would support the public option?