Small: Time to focus on Medicaid outcomes

Time to focus on Medicaid outcomes

By Jonathan Small

Opponents of Gov. Kevin Stitt’s call to use private contractors to oversee managed care in Medicaid say the existing system works well and doesn’t need to be fixed because the program rapidly pays providers.

But Medicaid doesn’t exist to provide cash flow to medical providers. It exists to provide health care to citizens on the welfare program and improve their outcomes. By that metric, Oklahoma’s Medicaid program fares poorly. The state’s health outcomes rank among the nation’s worst.

Managed care could improve medical outcomes and reduce the rapid growth in Medicaid expenses, which is especially necessary now that more than 600,000 able-bodied adults may be added to Oklahoma’s program due to expansion.

The leader of the state’s college system notes that rising Medicaid costs have already diverted millions away from education. That problem will only grow worse with time unless Medicaid is brought under some level of control. Without managed care, Medicaid costs will continue to skyrocket and require offsetting cuts to things like school funding and public safety and/or tax increases on working families.

Managed care can also produce better health outcomes for people on the program. Currently, Medicaid patients often do not receive preventative care or routine checkups. As a result, medical problems often are treated in the emergency room or at crisis points, which means taxpayers are then on the hook for a much larger hospitalization bill.

Sadly, those sad outcomes translate into increased revenue for some providers. Thus, it’s no surprise many who oppose Medicaid managed care are large urban hospitals.

With managed care, private contractors are paid to direct Medicaid patients to less expensive, and more effective, early treatment, thus reducing expensive and preventable hospitalizations or excess costs. State officials believe managed care could reduce hospitalization among Medicaid patients by 40 percent.

Even if managed care achieves that goal, it will not slash overall Medicaid costs. It will only slow down the growth rate. Yet that’s worthwhile, as seen in other states. In 2016 and 2017, Ohio reduced its expenses by $3.5 to $4.4 billion through Medicaid managed care. In Pennsylvania, it is estimated Medicaid managed care yielded overall Medicaid savings of $5 billion to $5.9 billion over 11 years, according to the Lewin Group.

Such results explain why 40 other states, serving nearly 70 percent of Medicaid enrollees nationwide, use Medicaid managed care. Oklahoma is not a leader in this area, but an outlier.

The question is not whether private companies will be involved in Medicaid. Private companies already serve Medicaid patients. The question is not whether anyone will make a profit from Medicaid. The program is already a major source of revenue for many providers.

Instead, the only question is whether it is better to restrain spending growth and improve patient health outcomes, or to do neither.

The answer is obvious.

Jonathan Small serves as president of the Oklahoma Council of Public Affairs.