As an organizer supporting home and community services and high quality affordable health care with equal access for all at Access Living for many years, I have seen advances and setbacks for people with disabilities in Illinois based on state policy decisions related to Medicaid. In the current Illinois budget crisis (which is partially due to many years of financial mismanagement and a structural deficit predating the economic crash) Illinois is in the midst of the worst financial circumstances for state government since the Great Depression. Because of this crisis, Illinois has proposed cuts in state services.
The author of this post is Tom Wilson, a community development organizer and health care advocate
People with disabilities who are on Medicaid, now confront this crisis through various cuts in services. Medicaid Managed Care is one form of these cuts. The state is proposing to put 38-40,000 people in six counties into its new Medicaid Managed Care program. This proposal would hand most of the current taxpayer money spent on the healthcare for people with disabilities over to two insurance companies (known as Managed-Care Organizations).
The Managed-Care Organizations would then be responsible for paying for all of the health care services of their enrollees. This program would not be voluntary but would force people to choose between the two Managed-Care Organizations (MCOs) or Health Maintenance Organizations (HMO) selected by the state. Or, if people with disabilities do not choose one, they will be assigned to one of the organizations. The proposal would aggregate the Medicaid money budgeted and use it to provide health care, case management, long term care and all other therapies that are currently covered by Medicaid.
The state’s goal is to save $200 million over five years. That figure comes out to a $1,000 per year per person cut in spending. The medical loss ratio, that is, the money actually spent on health services has been set at 88%. The remaining 12% is put in to the pockets of the insurance companies in the form of case management, provider recruitment expenses, administrative costs, and profit. That 12% represents money that is currently going toward health care for people with disabilities that will no longer go to the people who need it. The insurance companies (HMOs) and the state will argue that with proper case management they will reduce enough expenditures, such as emergency room visits, to cover the 12% spent on administration and profits, plus the $200 million that the state wants to save.
Past experience with Medicaid Managed Care shows many drawbacks to this approach. The problems that have been observed in other states managed care programs have included being assigned a primary provider that is not easy to get to; limited access to specialty care, especially for rare conditions; and denial of services that the consumer desires for maintenance of health such as rehabilitative therapy. In addition to limited coverage, in other states that have implemented managed care programs many people have been dropped completely from their healthcare plans because they were too costly and they required “too much care.” HMOs have dropped seniors in Medicare managed care and poor people in Medicaid managed care programs because such consumers limited their profit margins.
Research confirms that Medicaid Managed Care has, in many cases, not been successful. An article from March 2005 in Academy Health by Bonnie Austin titled “Managed Care Mandates Fall Short of Curbing California Medicaid Costs,” quoted results from a large population study done by Mark Duggan and researchers from the University of Maryland and the National Bureau of Economic Research. The study states, “Our findings suggest that managed care contracting reduced the efficiency of the Medicaid program in California. In fact, Medicaid spending appeared to increase by almost 20% following the shift to managed care and persisted long after the mandates first took effect.” The article also importantly notes that “The researchers also found that the switch from FFS (Fee for Service) to managed care did not lead to significant improvements in health outcomes.”
Although the aforementioned study only examined managed care in California, The Journal of the American Medical Association (JAMA) conducted a study in 2004 that examined how the introduction of mandated managed care affected enrollees across 15 states. Some of the specific downsides to mandated managed care included: limited choice of primary care physician, (some consumers have spent years identifying physicians they trust); extremely short visits with their primary care physicians (the physicians are given a financial incentive to see more patients per day); inability to prescribe medications and treatments that are not on the enrollee’s plan; inability to see highly specific specialists who are not on the enrollee’s plan; strict limits on physical therapy and counseling services; increased delays in obtaining appointments with physicians; and often, certain emergency room care is not covered at all. It is also important to note that in the JAMA 2004 study, the groups observed were often specific “carve outs” (pregnant women, children, etc.) that required less health care on average than people with disabilities. The aforementioned point is important because what are perceived as minor inconveniences for specific groups of people receiving care could potentially be greater problems for people with disabilities. For example, expanded choice of physicians is extremely important for people with certain disabilities so they can be sure to find a physician whose office is accessible.
The question of profit is a major one in examining Medicaid managed care. The HMO’s main motivation is to make money. The member’s health is a secondary consideration. There are circumstances where the HMO’s desire to make money may coincide with the member’s goal of good health. But prior experience has shown us that these two goals can also be totally opposed to each other. For example, Suzie, who has cerebral palsy, requires regular physical therapy to retain strength and range of motion to care for her child, but the HMO has determined it can only afford half as much therapy as Suzie requires. Any healthcare delivery program that fails to put the patients’ health as their top priority cannot be the correct choice for our state. Healthcare for people with disabilities is more than a service that is provided by a corporation. Healthcare is a basic human right which should involve only the patient and one’s physician.
Much of the difference is due to competing conceptions of health care. Insurance companies and Wall Street see health as a commodity that has to be bought and sold so investors can gain maximum profits. Many health care advocates and health care consumers see health care as a human right. Under the commodity formulation you only get as much health care as you can afford or the state will pay. As a human right, health care is guaranteed for all medically necessary treatments and all individuals are treated equally in their access to health care. As a right, the society is responsible for publicly raising the money to fund health care and the money is used primarily for services, (Medicare has a 3% overhead). Systems that treat health as a commodity use vastly larger sums for administration, avoid covering people with potentially costly conditions, and prioritize profits.
Research has shown that in the United States, not-for-profit healthcare providers get better outcomes (“Quality of Care in Investor Owned vs. Not-for-Profit HMOs” by Himmelstein, Woolhandler, Hellander and Wolfe). This is also true in comparing for-profit and not-for-profit hospitals and nursing homes. Global comparisons also show that countries that guarantee health care to their citizens get better outcomes including longer life spans and they spend significantly less to get superior results.
These objections are all very important but, arguably just as important is, the question of consumer control; a central tenet of the disability rights movement. People with disabilities have often had decisions made for them. They have been locked in institutions against their will and they have even been sterilized. More recently, people with disabilities have been denied medical treatment because their lives were not valued highly enough by their families and doctors. There still exists great stigma about disability throughout society and thus people with disabilities mistrust HMOs to make the best decisions about their health care needs. People with disabilities have good reason to be suspicious of others making their healthcare decisions for them and this suspicion only grows when a profit interest is involved. No one has a better understanding of their disability and how it impacts treatment needs and options more than the person with a disability. People with disabilities do need to have professionals clearly explain the options available to them but the person with a disability or their chosen representative needs to be in charge of their final health decisions. Anyone who comes between a person with a disability and their chosen doctor is potentially a problem to achieving the desired outcome of good health. Managed Care is, by its nature, all about putting limitations on this consumer control and the amount of health care that a person can receive and that is simply not acceptable.