Republican Maine Sens. Roger Katz of Augusta and Tom Saviello of Wilton rolled out legislation Tuesday that would overhaul the state’s health insurance program for low-income residents. It would permit the state to expand Medicaid under the Affordable Care Act for three years, and it would fundamentally change the way Maine administers Medicaid for all recipients by contracting the program out to private companies or nonprofits, a model known as managed care.
As with any complex change, a successful managed care system would depend on how it’s organized and overseen. As the bill makes clear, the change would require years of work and effort, sustained collaboration, expert help, and buy-in not just from both political parties, physicians and patients’ groups but the public.
As long as rulemaking resulting from the bill ensures greater access to care for Maine’s low-income patients and fair rates for providers, there’s no reason not to pursue the new health care delivery system. Maine’s Medicaid program, MaineCare, has been plagued for years with cost overruns and inadequate oversight. Having organizations coordinate and finance care for Medicaid recipients has been done successfully elsewhere, and it can be done in Maine. Katz and Saviello have set up a way to pursue the process thoughtfully.
The managed care model is by no means new. In some form or another, organizations are now charged with coordinating care for 74 percent of Medicaid recipients across the country, up from 58 percent in 2002 and 10 percent in the early 1990s.
Maine is now discussing implementing the most common arrangement, called comprehensive risk-based managed care. It would have the state pay three or four successful bidders a fixed, per-enrollee payment each month — based on actuarially sound numbers — in exchange for furnishing a range of health services. Medicaid recipients would be able to get those services through a network of participating providers. One benefit would be having more predictable Medicaid costs for the state.
Some say that managed care will save the state money, as managed care organizations will have an incentive to contain costs and keep patients healthy. While it is possible, and the bill currently builds in a 5-percent cost savings, one study by the National Bureau of Economic Research found that managed care plans do not always reduce Medicaid spending — and that when they reduce Medicaid spending, it’s not always because of improved health among Medicaid enrollees and reduced health care use.
That doesn’t mean Maine shouldn’t pursue managed care or even that the state can’t find a way to save money. It does mean managed care shouldn’t be reduced to a soundbite touting it will save money no matter what. How well a managed care system works depends on how it’s set up.
Setting up an effective system would require expert guidance from other states that have been using the model well for years, such as Michigan or Wisconsin. Maine would need direction on the best ways to analyze data and measure the results of managed care. It would need to determine the problems it wishes to address: Reduced emergency room use? More flexibility on when patients can get help? Improved birth outcomes? The bill allows for all these issues and questions to be addressed by a stakeholder group, rulemaking and the contract process itself.
A managed care model has great potential to benefit Medicaid recipients, especially the 70,000 newly eligible with expansion, as they would have defined provider networks to turn to for care, and more services would likely be covered. Switching to a managed care system should not only be about money but about ensuring that people in need get quality care delivered in ways that are monitored and improved over time. Maine hasn’t done this well with its current fee-for-service system.
Expanding Medicaid and switching to a managed care model are changes that could substantially improve the lives of thousands of Maine residents. Those residents deserve to have their lawmakers put aside philosophical differences, come to an informed decision and support the efforts of Katz and Saviello.