My testimony from this week’s Medicaid Reform Advisory Group Meeting:
Hello and good afternoon. My name is Katherine Restrepo and I am the health care policy analyst at the John Locke Foundation.
There is always room for improvement within our state’s Medicaid program.
Total Medicaid spending in North Carolina has grown almost 90% in the last decade, from less than $8 billion annually to more than $14 billion annually in 2012. In each of the last four fiscal years, North Carolina’s Medicaid spending exceeded its appropriated budget by an average of 11%.
It is pretty clear that our taxpayer dollars can be used more effectively to deliver better health results for Medicaid patients.
For several years, North Carolina has measured patient health outcomes with the Healthcare Effectiveness Data and Information Set (HEDIS). This is a set of metrics used by more than 90 percent of health plans in the United States.
While half of the state’s widely tracked performance measures have improved, half have been declining for several years. Compared to 2008, certain patient populations today are less likely to receive preventative care visits, appropriate immunizations, recommended cancer screenings, and follow-up care after being hospitalized for mental illness. Even for services where utilization rates have improved, population percentages remain low.
And while Community Care of North Carolina’s medical home model seeks to capitalize on primary care services to reduce hospital costs, emergency room visits are actually increasing for adults along with the aged, blind, and disabled Medicaid populations.
Furthermore, according to the Agency for Healthcare Research and Quality, the average hospital stay also remained relatively stable at 4.3 days in 2011, compared to 4.2 days in 2000. Note that average hospital costs and charges for Medicaid increased during this time frame.
At the John Locke Foundation, our vision for Medicaid Reform in North Carolina strives for budget certainty and positive health outcomes by instilling competition and fiscal responsibility among multiple types of entities that deliver care to Medicaid beneficiaries. These outcomes can be achieved whether the system operates in a statewide-managed care fashion or whether provider-led plans compete on a regional basis.
On a statewide Medicaid reform approach, we support a reform in which public and private comprehensive care entities would submit competing bids to North Carolina’s Medicaid program to provide all Medicaid services and coordinate both mental and physical health care. The state would then contract with these entities to buy fully-capitated health plans. Plans would be selected based on cost, quality, and access to care, ensuring that the plans will provide the most benefit to patients at the lowest cost to taxpayers.
These plans would be paid a flat monthly rate for each individual, which would be risk-adjusted for each individual’s health status. Risk-adjusting will prevent plans from cherry-picking healthier patients. Rather, these individual plans motivate the care entities to compete for sicker patients and manage their care more effectively. Risk-adjustment also prevents waste, fraud, and abuse and ensures resources are dedicated to those who need them most.
On a regional Medicaid reform level, multiple provider-led plans can also compete with each other to better serve patients. (Provider led plans can be physician practices, hospitals, federally qualified health centers, patient-centered medical homes, etc.)
Both provider-led plans and comprehensive care entities would bear full risk. Bearing full-risk makes for budget certainty, leaving taxpayers off the hook.
And when competition is thrown in the mix, patient choice comes into play. It would be ideal to empower patients to choose from among multiple competing private plans to find ones that will serve them best.
As of now, there is no competition with our state’s Medicaid program. CCNC is the lone provider. And with today’s positive remarks about CCNC, CCNC should have no problem competing with other entities that will deliver medical services to Medicaid patients.
I encourage you to read the report before you on how Kansas, Louisiana, and Florida are successfully achieving budget certainty through a competitive, patient-centered Medicaid reform.
Thank you for your time and I sincerely hope you consider implementing these key ingredients into the ongoing Medicaid reform.
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