Managed Care for Disabled: HMO money grab or fiscal prudence?

Should administration of Minnesota’s  public health programs for those with disabilities be transferred into a program administered by insurance companies?  The Minneapolis Star Tribune reports that CEOs from seven major health plans and providers have come up with their own plan to streamline Minnesota’s Medicaid program.

According to an article in the Pioneer Press, in the current two-year budget cycle, which ends in June, the state is spending $6.6 billion on health care programs, with the vast majority going to Medical Assistance. In the next two-year cycle, which begins in July, the state expects to see health care program spending jump to $9.1 billion. 

Part of the plan devised by the health insurer and medical provider executives recommends moving people with disabilities into managed care programs, which they say will provide better coordination and avoid unnecessary hospital use. 

The dictionary definition of “managed care” is a health care system with administrative control over primary health care services in a medical group practice. The intention is to eliminate redundant facilities and services and to reduce costs. Health education and preventive medicine are emphasized. Patients may pay a flat fee for basic family care but may be charged additional fees for secondary care services.  Company executives claim in their document that one-third of emergency room visits are for non-urgent health problems and that when there is a health care service available, such as a “medical home,” emergency room use goes down. Medical homes could provide 24-hour, 7 day nurse triage services provided by a contractor.   The executives claim that “incentives and restrictions” (such as copays) will “motivate” enrollees to select the “appropriate” level of care.

However, in a study published in the Spring, 2005, issue of Health Care Financing Review, voluntary disenrollment from Medicaid managed care programs by the disabled and elderly occurred because patients could not see the doctor they wanted, had to wait too long to get appointments and then wait too long in waiting rooms.  Some cited that they couldn’t get admitted to the hospital when they needed to or were told to leave before their doctor thought they should.

Furthermore, any managed care system would need to have an infrastructure of oversight to make sure that contractors were not guilty of underservice.  According to a report by 5 Eyewitness News,
Minnesota doesn’t examine the financial records of the health insurance companies even though the state pays out $300 billion annually. Another informative video is posted on the Minnesota Universal Health Care Coalition website

Proponents of the plan estimate savings to the State will be $300 million. Historically, however, adding a middleman to “manage” health care delivery has added costs, not lowered them, according to Dr. Lisa Nilles of Physicians for a National Health Program.

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