Medicaid Reform: All Eyes On Jindal

As discussion of “healthcare reform” gets underway in Washington, some fascinating details have emerged, but also some stunning vagueness. Nowhere is the vagueness – and even silence – more apparent than in the lack of comprehensive reforms to Medicaid.

I mentioned in my first guest post that Medicaid is often the least discussed, and least understood of government health programs; in recent weeks, you can see that when “Medicare and Medicaid reform” are often lumped together, a talking point that usually reflects thinking that Medicaid is like Medicare, but for poor people. One of the reasons Medicare reform has taken front-burner status, and usually does, is because the program is most clearly under federal control. Medicaid, as I discussed previously, is a series of state programs, paid for by federal block grants in part, and structured differently in each state, harder to change in national policy.

Now, the relative silence at the national level has allowed the Medicaid reform spotlight to fall, oddly, on the one Governor who’s made it a centerpiece of his reform plans: Bobby Jindal, of Louisiana.

Jindal presides over one of Medicaid’s worst examples: generally ranked near the bottom of most measures of healthcare and poverty, Louisiana provides services only to the poorest of the poor, and has generally been seen as wasteful, inefficient and corrupt in delivering that service.  Jindal’s proposal for change has interesting components: most significantly, it would move a large number of poor people into a managed care plan, in partnership with private insurers, that would focus on basic services while reducing overall costs. That would take the government out of supplying healthcare directly – Jindal has been trying to consolidate and close the state’s system of Charity Hospitals – and help change the “fee for service” model of payment that accounts for many problems with fraud and waste and overspending.

The Louisiana proposal – which is still awaiting a series of federal waivers to proceed – is modeled on recent changes in Florida, in part because Jindal’s Secretary of Health Services, Alan Levine, helped develop the model while serving as Health Secretary under Jeb Bush. Many Republicans are watching these developments, because the party nationally has so few solutions to offer on healthcare issues.

One problem for Levine and Jindal surfaced in the past few weeks, as data from Florida begins to be analyzed (the Florida system is little over a year old). Already, it is clear that the “test” programs – in 5 Florida counties, including Broward – are struggling, in part because low reimbursement rates in the plan are leading doctors, and even some prominent insurers, to back out. This is a familiar cycle: when Managed Care was first adopted by insurers in the eighties and nineties, it too showed much promise… but patients chafed under limited access to certain doctors, and doctors balked at low rates and attempts to direct care decisions. Eventually insurers had to drop restrictive managed care plans.

Florida’s plan hasn’t failed entirely – one generally ignored piece of the analysis is patient satisfaction, which has generally improved under managed care, at least until patients become frustrated by docs and insurers abandoning the program. Despite doctor complaints, patients actually appreciate the access to doctors and basic care; unfortunately, that care may reveal additional needs, which increase cost burdens across the system.

Already, with the onset of the severe economic downturn, Jindal has had to recast his brave plans: he’s scaled back the proposal, and significantly cut the money involved… which will likely add to resistance from insurers and docs to even adopt the plan, or sign on as providers. The experience and data in Florida will probably only add to that reluctance. And in the meantime, there’s almost nothing else on the horizon: outside of the increased funding of the Stimulus bill, and the long awaited expansion of S-CHIP, there’s no national discussion of reforms that would address access to care, or cost of care, as things stand under Medicaid.

One bright spot I’ve seen recently is the New York Times highlighting an alternative which already works: In North Carolina, the state operates its own set of Managed Care plans in 14 community networks; since 1991, the plan has saved millions in costs, and improved access to basic care across the state. But not without raising other issues: as commentors noteon the Times health blog, patients with more complex health problems and special needs may not be well served by the community system, and may have trouble accessing or paying for specialized care outside of the network.

Ignoring, or sidelining, close examination of issues in Medicaid, I think, is a mistake that undermines the larger discussion of healthcare reform; until America figures out how to provide healthcare to its poorest, we really haven’t “reformed” anything, and the complexities involved in fixing Medicaid underline why “insurance” alone is not a solution – it’s fixing the cost of care, getting access to good care, and making sure the right care at the right time is provided that’s really at issue. Jindal’s plan may be a failure… but he’s trying. So far… you can’t say that about many others.