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12.12.10

Jindal Administration must promote LA Medicaid reform

The good news for the Gov. Bobby Jindal Administration in dealing with looming budgetary problems is it is doing a lot of the right things in the most expensive part of state spending for the long term. The bad news is that it has to deal with the near term as well where it has had difficulty in communicating the wisdom of its approach with the heat on to deal with the fallout from the forecast shortfall, which may sabotage all efforts.

Led by Department of Health and Hospital Secretary Bruce Greenstein, his approach to Medicaid reform in the state exemplifies the good. The current system rewards quantity over quality in caring for the indigent not just for private sector involvement, but also in that the state as direct provider plays a major roles in this provision which is the least effective means by which to encourage efficiency. Jindal has made this a priority to change since entering in office but has had to fight tremendous inertia throughout, leading to few realized benefits to date.

Epitomizing the difficulty in engineering positive change is the resistance being put up by some providers who are the biggest beneficiaries of the current system. The reform plan now piloted by Greenstein would move away from the fee-for-service system that almost every state has shelved in favor of one where the private sector would compete for business for health care dollars given to recipients to buy into insurance-like plans. This would reduce revenues going to many current providers so instead these interests have argued to modify the fee-for-service system along the lines of a government-managed regime that depends upon pushing more people into the system that would end up costing more overall (even if on a per-client basis it would be less), because they would raise more revenue that way.

To their credit, not only have Jindal and Greenstein resisted this, but Greenstein has shown flexibility to continue to improve on reform ideas. The biggest problem seen in a similar system in Florida has been confusion by clients over plans and services, so Greenstein wisely made modifications by capping the number of managers to run plans to reduce that. Originally, any certified manager could offer a plan; now, they will have to outbid others for a few slots. He also revised an idea from the competing model favored by some providers based upon a current practice in Louisiana to pay providers for overseeing care by introducing performance standards rather than scrapping it.

But opponents of changes have demonstrated the bad in doing their best to try to frame the debate as a reduction of care provision in order to save money. Some, usually among providers, don’t like that their margins will be lower, or that they’ll have to work harder without a guaranteed reimbursement for anything they do for any reason. Others, among politicians and special interests such as some media outlets, simply object the Jindal’s philosophy that government should be less the direct provider and more the facilitator in provision because it means smaller government. That constitutionally and statutorily the state’s fiscal structure disproportionately punishes health care in this period of budget retrenchment above all else has given them a perfect avenue by which to criticize the drive for efficiency as a reduction in care rather than an improvement in it to do more and better with less.

Only having recently taken his position, Greenstein now appears to be making an effort to prevent opponents of both the particular and the general from monopolizing the debate. For the past few weeks he has hosted public forums and sat down with policy agenda-setters to explain the wisdom of the long-term approach. Those without a vested interest in the system seem to come out of these supportive of the reform ideas.

That short-term budget difficulties exist creates both an advantage and disadvantage to this reform effort. The money shortage makes it easier to force changes in practices where having no sense of urgency could sap political will to do so. However, it also distracts from communicating the long-term benefits of the reform by introducing the noise of short-term of cries of pain real and fabricated – some of it because managing planned change usually turns out smoother than being compelled to do it. A campaign of demonstrating the current system’s inefficiencies, how reform will improve things, and that its opponents’ dire predictions are overblown, even as that would require great skill in explaining a very complex system, would assist Greenstein in overcoming this resistance.

Jindal also can help out his subordinate by spending some time and political capital by explaining that the downsizing discomfort being felt is a product of both an inefficient system and straitjacketed fiscal structure that also needs reform and is not a product of the reform effort, emphasizing that his reforms and changes to the state’s constitution and laws could create a better situation. Failure to do so allows the linking of his reforms with budget cutting for cutting’s sake, a mischaracterization that could discredit the larger, desirable goal of right-sizing a Louisiana state government too big to serve the state well.

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