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DHH Responds to PAR Brief on Louisiana Health First

Report contains significant factual errors and omissions

Tuesday, December 16, 2008  |  Contact: Media & Communications: Phone: 225.342.1532, E-mail: dhhinfo@la.gov

BATON ROUGE—The Department of Health and Hospitals issued a response today to the Public Affairs Research Councils brief on Louisiana Health First, a broad effort to overhaul the states health care system for the poor and uninsured.

DHH supports credible and independent analysis of its proposals to transform Louisianas health care system and welcomes any feedback or criticism that is based on facts, data or study based on sound methodology.  However, todays statement released by PAR to Louisiana Health First falls far short of well-researched and balanced analysis, fails to grasp or acknowledge the problems faced by Louisiana, and does not acknowledge the common solutions that most health care stakeholders locally and nationally support. 

Instead, PAR simply supports investing more money-without accountability or identifying a source for the increased spending-in a system that has contributed to Louisianas ranking as the least healthy state in the nation for 16 of the past 18 years.

Among the statement's problems:

PAR incorrectly states that DHHs proposal to expand insurance coverage to as many as 106,000 of our citizens will be paid for from one-time revenues.  In fact, expansion will be paid for primarily by savings obtained from proposed improvements made in the current Medicaid and DSH program.  No non-recurring revenue is proposed to be used for recurring expenses.

PAR fails to discuss in its analysis that in the next 18 months, Louisiana will exceed our limit on federal spending for the uninsured.   Above this limit, the state will no longer receive federal matching funds making the program either prohibitively expensive, or forcing service reductions as inflation eats away at our rural and Charity Hospitals.

Expanding coverage makes economic sense.  The states plan to cover up to 106,000 additional persons allows the state to draw more federal support by matching 30 cents in state funds to every 70 cents contributed by the federal government. This is a good return.

The one-time money cited in PARs report relates to demands by the federal government that Louisiana return $771 million it alleges was misspent by the state over the past 10 years.  The state has proposed that, instead of simply writing a check to the federal government, we be allowed to invest as much of this money as possible to fund health care in Louisiana.  The state match will be paid from recurring revenue. 

The PAR report does not point out that if we do not move the financing for the uninsured from under the DSH cap and shift the financing to Medicaid, we risk losing 70 percent of each dollar the federal government is currently funding.  PAR fails to offer a solution.  Absent a solution for exceeding our DSH cap, PAR does not recommend where the state will need to go to find the $300 million - $600 million it may cost per year once we exceed the cap in the out years. 

While, unfortunately, PAR feels that the Medicaid program ranking as 28th by Public Citizen is good enough, they fail to acknowledge that the same report ranked quality in the Medicaid program as 49th in the nation.

PAR defends the current fee-for-service model of Medicaid without discussing or disclosing that bipartisan, leading independent health care experts and organizations such as the Commonwealth Fund, the Congressional Medicaid Payment Advisory Commission, the Network for Regional Healthcare Improvement, and the CEO of the Kaiser network argue that the fee-for-service model is outdated, wasteful, leads to poor outcomes and must be replaced.  The CEO of Kaiser even went as far as to say in the Washington Post last week that not only is there significant wasteful spending in our current healthcare system, but much of it is harmful. 

PAR fails to cite data or studies that support its conclusions about the implementation of coordinated care networks, and fails to disclose that the author of this particular brief is the architect of the Medicaid Community Care program (PCCM), which the statement defends.  The statement gives a history of what the author presumably had hoped to accomplish through the PCCM program without analyzing the reasons for the programs many failures and limitations. 

PAR does not address why, under the PCCM program, Louisiana ranks at the bottom nationally in basic measures of Medicaid performance, such as the percentage of women who receive breast cancer screenings or percentage of children who receive well child screenings.

PAR fails to discuss how the PCCM has done little to eliminate the shortage of specialists in Medicaid.

PAR fails to explain why Louisiana has the highest rate of avoidable hospitalizations in the United States, among the highest rates of expensive hospital and emergency room use in the United States and why Medicaid enrollees use the emergency room more than four times as often as people with private insurance.

PAR does nothing to educate its readers about the widespread adoption of Medicaid managed care nationally (60 percent of Medicaid consumers nationally are enrolled in some form of managed Medicaid and this number has increased each year for ten years).

PAR discusses none of the literature that supports the success of managed Medicaid.  For instance, a 2007 Health Affairs article reports that none other than the Institute of Medicines health care safety net committee found that in many parts of the country, Medicaid managed care has become a stable enterprise, creating medical homes for enrollees and improved budget predictability for Medicaid. With support of the Kaiser Family Foundation and the Robert Wood Johnson Foundation, the Center for Health Care Strategies found in a review of fourteen representative states managed Medicaid programs that:

  • States are generally happy with and continue to pursue full-risk  managed care, and are also using managed care alternatives as a way to provide accountable medical homes and expand care management.
  • States want to expand and extend mechanisms for accountable medical homes and managed care into new areas (rural) and populations (aged, people with disabilities, and dual-eligibles).
  • States now realize that they can do much more with their purchasing power than merely secure financial predictability, and they are acting accordingly. Increasing quality, efficiency and accountability are all important goals.

Instead of lamenting the poor performance of and rising costs for Louisiana Medicaid, PAR defends how little money the state spends on administering the program compared to coordinated care networks.  No connection is made that a primary reason the program is so wasteful, and produces such poor outcomes, is because there has been so little administration of the program and equally little accountability.

PAR's assertion that the proposal is rooted in Floridas program and that other models have not been fully explored is not only false, but intentionally designed to discredit the public process the state has undertaken to shape its proposal.  According to the Centers for Medicaid and Medicaid Services, in 2006, at least thirty-five states had large populations in Medicaid managed care. DHH staff have investigated programs nationwide, have visited or been visited from programs in Pennsylvania, Kentucky, Florida and North Carolina. Several of DHH Medicaid staff are recognized as national experts themselves, and with the input of local health care stakeholders and the Medicaid Reform Advisory Group, have drawn on their colleagues experience throughout the country to help shape this proposal.

PAR argues that other models deserve to be investigated, but without any evidence or analysis to support their assertion, states that Louisiana should adopt the North Carolina model.  PAR also does not acknowledge that the Louisiana Health First proposal specifically mentions that the North Carolina model could be a good model in areas of the state with poor specialist coverage.  DHH does not reject the North Carolina approach and the states Medicaid waiver allows for its application where appropriate.  PAR does not acknowledge, however, that as with any system, North Carolinas system has many of its own challenges, which DHH must consider as it designs its reforms.

Louisiana Health First necessarily goes beyond the North Carolina model to address the full health care system-including specialty care, hospital care and pharmacy.  This is significant since Louisiana has the highest rate of avoidable hospitalization, overuse of its emergency rooms and has significant issues with lack of coordination of pharmacy services.

Louisiana Health First also promotes payment reform, an issue advocated by health care leaders, such as the Congressionally-created Medicare Payment Advisory Commission and Senator Max Bauchus, a leading Democrat in the United States Senate.  North Carolina has not addressed payment reform and remains fee-for-service.

A 2008 study by the University of North Carolina published in the Annals of Family Medicine lists several challenges of the North Carolina model:

  • Fully implementing the patient-centered medical home as defined at a national level has not occurred;
  • Effective electronic communication between practices and referral centers exist only in limited areas;
  • The per-patient management fee may be insufficient to manage complex medical patients;
  • Actively involving medical subspecialists is difficult given the program is focused only on primary care;
  • Successfully using data to monitor outcomes across the various networks and to assess the impact of the program on statewide quality measures is not widely done.

A representative of one of the first networks in the North Carolina model was invited by DHH to address the Medicaid Reform Advisory Group.  By their own admission, North Carolinas approach has taken 10 years to implement, does not address specialty physician shortages, does not incorporate hospitalization, and has not helped to implement electronic medical records.  We invite PAR to review the documented testimony, which was public and has been transcribed for public viewing. 

In discussing Medicaid managed care companies, PAR leads readers to believe that all managed care is for-profit.  This is false.  There are a wide variety of not-for-profit, for-profit, mutual, and public managed care companies operating nationwide, and in fact, right here in Louisiana.  Kentuckys managed Medicaid program is a partnership between a university medical center and a not-for-profit managed care organization.  It has received the highest rankings from the National Committee on Quality Assurance, while at the same time providing more predictability to the Kentucky Medicaid budget.

Inexplicably, PAR writes that states can be successful with managed care, but concludes that Louisiana is incapable of this success because we dont have experience with managed care. Under this circular reasoning, no reform in education, ethics or health care is possible in Louisiana-a sad vision of the ability of our state to make change, and demeaning to those so tirelessly working towards it.

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