STATE Sen. Rob Standridge, R-Norman, has a simple but ambitious goal for Oklahoma's Medicaid program. “My passion is getting people off these programs,” he says. Standridge doesn't want to achieve that goal by arbitrarily “kicking them off,” but by helping people achieve self-sufficiency.
Although touted as a safety net, Oklahoma's current Medicaid program actually grows regardless of economic conditions, suggesting that enrollees find it hard to transition from state assistance to private insurance. Since 1995, Oklahoma's Medicaid enrollment has increased every year. When times are tough, more people enroll; when the economy is booming ... more people enroll!
In the 2000 state budget year, 12.13 percent of Oklahoma's population was on Medicaid. By the 2012 budget year, that figure reached 26.57 percent, a 141 percent gain in enrollment at a time the state's population grew just 10.3 percent. This trend is clearly unsustainable, and undesirable. Its impact on state finances is significant. Total Medicaid spending in Oklahoma, including state and federal dollars, increased 190.9 percent during that time period even as inflation increased just 35 percent. Looking only at state Medicaid appropriations, the picture gets worse: From the 2001 budget year to 2012, state spending on Medicaid increased 217 percent.
State Medicaid spending is often touted as a way to get “free” federal matching funds, but over the past decade the federal Medicaid reimbursement rate to Oklahoma has been cut 7 percent, which forced diversion of other state funds away from things like schools and roads to preserve Medicaid. Another cut totaling $66 million is scheduled. And President Barack Obama has called for cutting Medicaid payments further.
Even if costs weren't an issue, the program isn't particularly effective at improving health outcomes. Under the traditional fee-for-service model, medical care for Medicaid patients often is segmented, leaving providers with an incomplete picture of patients' medical histories. That ultimately creates more medical problems. A 2005 survey published in Health Affairs found that up to 34 percent of patients experienced a significant, avoidable medical error due to uncoordinated care. A 2009 multistate study by Southeastern Consultants found uncoordinated care resulted in medical costs that were five times the cost of coordinated care for the same diagnosis.
To improve the system, other states have allowed private insurance plans to compete to provide coordinated, managed care to Medicaid patients. Those reforms include incentives for providers to take challenging patients while rewarding them for patients' health improvement.
A legislative study requested by Standridge recently reviewed Medicaid reforms in Georgia, Kansas and North Carolina. Those states are now saving money, increasing patient choice and improving health outcomes. Georgia's per-enrollee Medicaid spending actually declined 2.7 percent from 2004 to 2009, even as patient care improved; Oklahoma's spending increased 4.5 percent, nearly double the national average.
Standridge says implementing similar reform in Oklahoma likely will require a multiyear effort. A pharmacist by trade, he said lawmakers must not try to reduce costs by simply cutting provider payments; currently, around 33 percent of Oklahoma doctors no longer accept new Medicaid patients.
Despite the enormity of the challenge, Standridge says there is “growing support” for Medicaid reform in the Legislature. Let's hope he's right, and that those reforms make the program an effective provider of temporary aid to the truly needy. Given the current Medicaid system's ever-increasing financial and human toll, Oklahoma literally can't afford to leave it unchanged.