The Results Are In
Until now, defining "positive health outcomes" for Medicaid beneficiaries has remained difficult.
In 2008, Oregon conducted the Oregon Health Insurance Experiment (OHIE), a Randomized Control Test that monitored the health outcomes of 10,000 Oregonians who won a "lottery" to enroll in Medicaid. This population was then split between the uninsured and those on medical assistance. Health researchers compared and evaluated the following four major health measures among the two subpopulations: elevated blood pressure, high cholesterol, elevated glucose levels, and long-term cardiovascular risk.
The health experiment’s second-year results indicate that Medicaid’s "one-size fits all" system does not produce better health outcomes for its enrollees.
Advocates object to the experiment researchers’ conclusion, claiming that the tested populations were too small to determine profound outcomes. It is critical to emphasize, however, that 30,000 Oregonians were originally eligible to enroll in the Medicaid lottery. Only 60 percent chose to fill out the paperwork necessary for enrollment.
As expected, utilization of services, health expenditures, prescriptions, and diagnoses increased among Medicaid enrollees. Researchers found that those who received Medicaid increased their annual health care spending by $1,172, or 35 percent over those who did not receive Medicaid.
Futile Incentives
As the state and federal governments jointly fund Medicaid, each state may offer benefits or pay providers beyond the program’s base requirements with a federal waiver. Medicaid supporters believe that spending more money on the monopolistic system will resolve any of its shortcomings.
For example, the idea of paying primary care physicians (PCPs) higher reimbursement rates for Medicaid services incentivizes the delivery of quality care along with an increase in access to care for patients. One would think that this would fulfill Medicaid’s intention of producing positive results for its patients. Unfortunately, progress toward this ultimate goal still lags behind.
Oregon is a case in point. If anything, Oregon Medicaid recipients should benefit from the state’s entitlement program. In 2008, Medicaid paid PCPs 64% of the private coverage rate – 12% above the national average. Providers at that time also were accepting almost 80% of new Medicaid patients, whereas an average of one-third of physicians nationwide refuse to accept new Medicaid enrollees.
Today, the federal health law mandates that Medicaid pay PCPs Medicare rates. While both Medicare and Medicaid rates rank below private coverage levels, Medicare pays more than Medicaid. For example, in 2008, Oregon Medicaid fees were listed as 78% of Medicare fees. The national Medicaid-to-Medicare rate at that time was 65%. In 2012, Medicaid physician fees averaged 66% of Medicare fees across the nation. The required reimbursement increase not only acts as an incentive for more providers to accept more Medicaid patients, but also helps to offset the costs associated with increasing number of Medicaid enrollees if states opted for the federal health law’s Medicaid expansion.
Similar Comparisons Between North Carolina and Oregon
Indeed, North Carolina’s Medicaid program parallels Oregon Medicaid in terms of high provider rates, access, and poor health outcomes.
North Carolina’s Medicaid Managed Care Organization (MCO), Community Care of North Carolina (CCNC), was already paying PCPs 95% of Medicare rates in 2008 – well before the Affordable Care Act mandated providers be reimbursed for Medicaid services at 100% of Medicare.
CCNC reimburses PCPs through a hybrid model of both fee-for-service and capitated rates. A physician receives a fixed monthly rate between $2.50 and $13.00 per member per-month (PMPM), depending on the patient’s health status, along with an additional $2.50 PMPM to hire care coordinators.
Meanwhile, approximately 76% of the state’s PCPs accept new Medicaid patients. Despite this imbalance between supply of providers and demand of patient care, the acceptance rate still ranks high above the national average.
The Search for Healthy Numbers
So, why are Medicaid patients not getting better? For several years, North Carolina has measured health outcomes with the Healthcare Effectiveness Data and Information Set (HEDIS), a set of metrics used by more than 90% of health plans in the United States. Of the 53 tracked performance measures in the state’s Medicaid program, 55% of these were worse in 2011 than in 2010. And this is not a single-year anomaly. Health outcomes in North Carolina have been declining for years.
Medicaid Monopoly: Do Not Pass Go
Clearly our taxpayer dollars are not being used effectively to deliver better health results for Medicaid patients. In each of the past four fiscal years, North Carolina has exceeded its appropriated Medicaid budget by an average of 11%, while the Senate seeks another 11% increase in Medicaid spending for the next budget. Total Medicaid spending in North Carolina has grown almost 90 percent in the last decade, from less than $8 billion annually to over $14 billion today.
Based on OHIE’s evidence and North Carolina’s own tracked health measures, North Carolina politicians should be shouting from the mountaintops for a much needed Medicaid reform that incorporates competition and fiscal accountability between provider networks, MCOs, and its beneficiaries to increase healthiness among the state’s most vulnerable citizens. Governor McCrory’s proposed Partnership for a Healthy North Carolina certainly marks a positive starting point.
