Early this week Sen. John Marty published a piece about the growing concern about our inability to discern the cost of having private HMOs manage our public health plans. It followed the firing of David Feinwachs, an attorney for the Minnesota Hospital Association. He was fired apparently because HMO’s applied pressure to push him out because he was leading the effort to demand greater transparency. So we as taxpayers could better understand how our money was being spent.
Here is some of what Sen. Marty says:
I receive looks of disbelief, when I tell people at the capitol that there is one area of the budget where huge contracts – totaling over $3,000,000,000 per year – are made, without competitive bidding or auditing, and with minimal reporting.
Unlike all other parts of the budget, these contract holders are not required to use the standard “GAAP” (Generally Accepted Accounting Principles), that businesses, accounting firms, and other government agencies use. And, the system is rigged in a manner that whatever the contractors spend, the state will pay the bills.
Where is this shameful lack of oversight? It is in our public health programs, including Medicaid and MinnesotaCare. These are important programs, providing health care for hundreds of thousands of people, yet nobody is watching the store. We know how much the state pays health plans to provide care, but have no way of knowing how much money is going to the people who need care and how much is eaten up by insurance company overhead. The state blindly accepts whatever numbers the HMOs provide.
Now, with a $6 billion deficit, we can no longer stick our heads in the sand.
Sen. Marty offers more information about how this came about and has worked on this issue several times. The State of Minnesota made this change to utilizing HMOs a number of years ago and promised the legislature it would do a study to show the cost savings. However the study was never done and when asked Dept. personnel claim it would be impossible to make a comparison.
I am glad there is some work being done on this. I had hoped to hit this issue hard had I been re-elected. In an effort to address the growing cost to our health care budget, in 2009 I did some looking into the cost of having the private plans manage our public plans and invited the official from Commerce to my office to ask him about his oversight of the plans. He indicated there was nothing they could do to compel the HMOs to open their books and didn’t have the man power to do justice to the task even if they could. He also indicated that Health and Human Services did not have the expertise to do even the most rudimentary assessment of where our money was going. He attempted to reassure me that the plans do a good job and I shouldn’t worry. He added that because the private plans in Minnesota were non-profit that should allay my concerns. I asked him if he had evidence that showed that because we had non-profit private plans in Minnesota we could be sure that the cost of health care in Minnesota was far less than in other states. But he admitted he had none and did not believe evidence existed that would show that.
KSTP news recently did a news story on the David Feinwachs issue here is the link to the newscast.