After three years in operation, Gov. Bobby Jindal’s signature effort to privatize Medicaid might be saving taxpayers millions of dollars and providing about 20 percent of the state’s population with better health care. Or it might not.
Called Bayou Health, the effort began in 2012, when Jindal started contracting the work that had been done by the state to five private insurance companies. Privatization is being phased in — it now covers about 900,000 of the state’s 1.3 million Medicaid recipients — and the final phase is underway to collect up all the rest. Although Louisiana taxpayers pay only a small proportion of the costs — federal dollars make up the lion’s share — Medicaid is still the largest single expense in Louisiana’s $25 billion annual budget.
Jindal has said his goal was to provide cheaper but better health care for the poor who are part of the government Medicaid program. Judging the success of the privatization initiative has proven complicated.
Kathy Kliebert, who as the head of the state Department of Health and Hospitals speaks for the Jindal administration, claims the raw numbers clearly show progress. The cost of public health care has gone up since privatization — from $6.6 billion to $7.57 billion, or about a 14 percent increase — but not as much as would have been the case had the private firms not been involved in managing the care of their patients, she said.
The private companies are more nimble and can do a lot of things that traditional government-administered Medicaid simply can’t match, Kliebert said. And the results are obvious, she said.
More adults — 4.6 percent more — are getting in to see primary care physicians, according to DHH. Thirty-two percent more 3- to 6-year-olds and 46 percent more adolescents are seeing doctors for checkups before they get sick. And the number of timely visits to doctors while women are pregnant has increased by 11 percent.
State Sen. David Heitmeier, the New Orleans Democrat who as chairman of the Senate Health & Welfare Committee oversees the program for the Legislature, said he’s pretty confident that costs have gone down by about 9 percent. More patients can get in to see more doctors more easily, or at least that’s what the administration is saying, he said.
“They tell us privatization is working; it’s saving 9 percent. I’m told it has increased access,” Heitmeier said. “That’s what I’m being told. But I can’t confirm that.”
The data being provided come directly from the insurance companies, are not independently audited and are often confusing. Besides, the rosy picture painted by the administration is challenged by doctors and hospital officials who are reporting more bureaucracy, lower reimbursements and difficulties finding care from medical specialists.
Jindal, 43, made his bones in health care policy.
He’s an Ivy League graduate who gave up a hard-to-get slot at the prestigious Harvard University Medical School to study government health care policy as a Rhodes scholar at Oxford University. Jindal was appointed to head DHH at the age of 24. He went on to run a commission on the future of Medicare and then took a high-ranking position in the U.S. Department of Health and Human Services.
As governor, Jindal moved aggressively to contract with private companies to handle many of the tasks traditionally performed by government. He has said repeatedly that transferring Medicaid management to private insurance companies gives the poor choices similar to those available to people who don’t have to rely on the government, while providing a better quality of care — all at a lower cost for taxpayers.
Before Bayou Health, traditional Medicaid patients received care from physicians, clinics and hospitals that were paid directly by the program for services rendered. Now, for three of the private insurers, that money goes to pay premiums for policies that cover health care costs, much like what the bulk of the population receives, usually through their employers. The other two private companies say they manage the care of individual patients to make sure the services provided, which are paid directly by Medicaid, are more relevant and helpful.
But legislators are frustrated that the Jindal administration has only reluctantly released information about costs and how patients are treated. It took three tries — Jindal vetoed the first two efforts — to require DHH to report the information that supposedly would show whether privatization is working better than when state government handled Medicaid.
The first report released under the new law contained lots of statistics, but little that could be used for meaningful comparisons.
Legislative Auditor Daryl Purpera in an Aug. 18 report criticized the state health agency for not documenting or verifying the data self-reported by the insurance companies contracted by the state to handle Bayou Health.
Additionally, he said, the information does not have statistics that can compare Bayou Health data to the traditional Medicaid model. “This lack of comparability renders most comparisons of Bayou Health data to legacy Medicaid data skewed and not useful,” Purpera wrote in his report.
Wanted: Useful data
DHH has hired Myers and Stauffer, a national firm of certified public accountants based in Indianapolis, to independently verify the completeness of the statistics.
Louisiana lawmakers aren’t waiting for those results.
The Senate last week cleared Senate Bill 109, which would require the Jindal administration to drill down a little deeper and deliver some findings that are more useful. The House will take up the measure soon.
“We want to actually be able to compare how many people are enrolled in Medicaid and how many of those enrollees are actually accessing primary care. We don’t know that,” said Sen. Ronnie Johns, R-Lake Charles. “What we want to know is whether they are accessing health care in the proper way. Are they going to the emergency room or a primary care provider?”
Paul Salles, president of the Louisiana Hospital Association, said an independent analysis would benefit everybody. “You can see per-member, per-month expenses decline, but what has been the source of those savings?” he asked.
Under traditional Medicaid, the program cost $274.75 each month for each recipient. Under Bayou Health, the “per-member, per-month costs” dropped 8.7 percent to $250.92, according to DHH.
Are Medicaid patients actually getting healthier as a result of the new program? Or is the lower cost the result of denying more claims or using accounting gimmicks to reduce payments to doctors, hospitals and other service providers? “I don’t know that anybody has that answer,” Salles said.
One doctor’s complaints
Dr. Floyd Buras thinks he knows.
Buras is a New Orleans pediatrician. Two-thirds of Bayou Health’s 900,000-plus enrollees are children.
“They didn’t save 9 percent on costs; they stole 9 percent out of my pocket,” Buras said, echoing the sentiments of other physicians. “The reality is they haven’t saved anything. They’ve shifted the cost on to the provider. I can’t shift that cost on to the patients. I have to eat it.”
Traditional Medicaid would not pay for newborn circumcisions, Buras cited by way of example. Bayou Health will pay for the procedure, which costs up to $190, and it ballyhooed that new coverage as an example of “expanding access” for Medicaid patients.
But under the new rules, insurance won’t pay for physician visits associated with a procedure. It will pay for, say, a gall bladder operation in its entirety, which includes office visits before and after the surgery. But the insurance companies won’t pay for the assessment that a pediatrician would be doing regardless of whether a circumcision is contemplated.
“When I go to see a newborn baby, I’m doing a totally separate examination to assess them as a newborn,” Buras said. “If I happen to do a circumcision at the same time, it’s unfair to bundle together the two separate procedures. They’re taking advantage of the rule-making process to short-pay doctors.”
A lot of others doctors also are complaining about the bureaucracy. Instead of one set of documents, regulations and qualifications, health care providers now have to juggle five.
Physicians, for instance, have to keep track of five different lists of medications that are covered by the five different private companies. If a physician mixes up the lists and prescribes an uncovered medication, the patient (or the parents) will have to pay its entire cost. Or — and this scenario is more likely — the physician resubmits the paperwork and the patient has to a wait a few days for the medicine that will fix, say, an earache.
Berkley Durbin, executive director of the physician group MedicineLouisiana, has troubles with the directories that list the physicians supposedly participating in the various plans. Sometimes the addresses are wrong, she said. Often the doctors are not part of the plan.
Nobody seems to be checking the accuracy of the lists, which patients use to find a doctor. “There remains an overall lack of infrastructure to provide efficient oversight and regulation by the state of these multibillion-dollar contracts,” Durbin said.
Lack of specialists
Another issue for doctors is the ability to easily find specialists, particularly pediatricians who specialize in orthopedics, neurology, dermatology and hematology. Because of low pay and high bureaucracy, many of the specialists have opted not to accept patients who use Bayou Health. This means many people in smaller cities have to drive to Baton Rouge or New Orleans or Shreveport to be seen by specialists.
“We are having long wait times. It’s difficult to get patients in to see some of those specialists,” said Dr. Bryan Sibley, of Lafayette, president of the Louisiana Chapter of the American Academy of Pediatrics. “Our understanding all along was there was supposed to be network adequacy.”
State health chief Kliebert said the access to specialists is a problem that’s not unique to Bayou Health. It happens in the private insurance world, too, she said.
The companies are still better equipped to address the problem than traditional Medicaid, she said. The private companies have more to offer than a traditional government program, such as incentives for good health care behavior, telemedicine and other national resources.
She said she is confident the Bayou Health plans have improved access and contained costs and that statistics will show progress in getting people the care they need.
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