Last week, the Louisiana Association of Health Plans (LAHP) released an actuarially sound study that shows Bayou Health saved Louisiana nearly $440 million in 2015 compared with what we would have paid in the old Medicaid fee-for-service model.
The study, which was performed by Wakely Consulting Group, validates and improves upon the savings projected by the Louisiana Department of Health and Hospitals (DHH) last year.
Bayou Health, which provides medical care for 1.2 million Louisiana moms and kids, is successful because it moves the financial risk of health care costs from the state to private insurers. The state pays the Bayou Health plans a set monthly fee for coordinated care instead of directly paying doctors and hospitals for each disconnected service they provide for members.
That fixed monthly fee gives the plans the incentive to improve care and save money by directing their members to primary care, offering free or low-cost preventive care and providing case management services for patients with chronic conditions. The Bayou Health plans are able to manage an individual member’s care strategy to ensure he or she receives the right care at the right time.
The five Bayou Health plans are Aetna Better Health of Louisiana, Amerigroup Real Solutions, AmeriHealth Caritas Louisiana, Louisiana Healthcare Connections ansd UnitedHealthcare. Combined, the Bayou Health plans employ more than 1,000 Louisianians in full-time, good-paying jobs.
Louisiana must create savings wherever it can, and Bayou Health is showing its value by creating desperately-needed savings. But we believe there are more savings to be had, and we’re working with Gov. John Bel Edwards, the Louisiana Legislature, DHH and others to implement those solutions.
For example, DHH representatives recently testified before the Senate Finance Committee and said introducing managed long-term supports and services (MLTSS) into Bayou Health could save the state $300,000 in the first year and $10 million each year after. The benefits for those individuals experiencing long-term difficulties due to a disability, who could then receive care in their home or a community-based setting, would be invaluable to families across our state.
By expanding Medicaid, the state will be able to add at least 300,000 people who may not otherwise have comprehensive health care into the Bayou Health system, where they’ll receive better access to high-quality, primary and preventive care. Through increasing the ability to leverage additional federal dollars, Bayou Health can offer further stability to the state budget while increasing health outcomes.
LAHP is committed to working with Louisiana’s elected officials, state agencies and communities to improve access to affordable, high-quality care for all our state’s residents.
Our study definitively shows that the private Bayou Health plans’ managed care expertise is part of the solution.
CEO, Louisiana Association of Health Plans