Newspaper article The Tuscaloosa News

GUEST COLUMNIST: Debunking the Myths about Managed Care

Newspaper article The Tuscaloosa News

GUEST COLUMNIST: Debunking the Myths about Managed Care

Article excerpt

After the fiscal crises of the past several years, Alabama Medicaid is in dire need of structural reforms. The Alabama Medicaid Advisory Commission recently concluded that a move to commercial managed care could save the state $364 million over the next five years.

Commercial managed care certainly has detractors; more specifically, entities that directly benefit from Medicaid's fee- for-service structure are concerned about a move to a system where they would be required to bear the risk of financial loss and comprehensively treat beneficiaries. In order to have a productive discussion about the best options for Medicaid beneficiaries and state budgets, myths about commercial managed care need to be addressed.

Myth: Commercial managed care companies seek to ration care in order to accumulate maximum profits and salaries for themselves, at the expense of the health of their patients.

Reality: In a capitated system of providing health care, managed care organizations (MCOs) have every incentive to capitalize on preventive measures that keep Medicaid beneficiaries healthy long- term. For example, it is far less expensive to get a flu shot than to be hospitalized after you have contracted the flu. More importantly, MCOs have accountability contracts with the states where they operate which permit the state to investigate and respond if care is not delivered, consistent with the agreement.

Myth: Enhancing Alabama's Regional Care Organization network will be just as effective as introducing a new system of managed care.

Reality: The proposed expansion of the RCO program would shield RCOs from any financial liability for the next four or five years. In other words, if the RCOs could not operate under the capitated amount, the state would incur the extra costs. When this model has been tried in other states, such as North Carolina, it has been a recipe for failure. A report by the Alabama Medicaid Advisory Commission also estimates that $364 million in Alabama taxpayer money can be saved over the next five years simply by switching to commercial managed care system. …

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