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Lawsuit compels more state exit of managing benefits

As another compelling reason manifests for getting Louisiana out of the active management of health benefits for its employees and retirees, defense of the current inefficient system continues as the Gov. Bobby Jindal Administration gets ready to resume efforts at reform.

Months ago, the Administration proposed to take the book of business that it directly manages, a little less than a quarter of all enrollees, and do with it like it does to all other in the system, have a third-party manage it. In order to get access to that business, it’s estimated that an administrator would pay as much as over $200 million.

Compelling reasons exist for this, besides the one-time bonus. Analysis indicates it would save money both for ratepayers and taxpayers (roughly estimated as $21.2 million annually for the former and about $56.3 million for the latter) and reduce the size of government, joining the other 48 states that do not directly administer their benefits programs. None of these figures or facts (even after my repeated attempts to have Office of Group Benefits, or members of its Policy and Planning Board, which voted to oppose the change, produce any evidence to the contrary) is in dispute. Yet those connected to OGB both past and present and others interested in protecting government jobs continue to voice disapproval.

One such individual, former state Sen. Butch Gautreaux who when chairman of the Senate Insurance Committee (and therefore also a Board member) launched a public relations campaign trying to discourage the change (as OGB is run by the governor’s Division of Administration, the only official input from outside would come from the Joint Legislative Committee on the Budget’s ability to approve state contracts), after leaving office was hired by an interest group also against the change to continue lobbying against it. No doubt the arguments he relays to policy-makers continue to ignore the facts above and perhaps throws in the oft-quoted by opponents, but unverifiable statement that it’s a well-run state organization.

Well, maybe not any more. Last week a lawsuit was filed that alleged, through bureaucratic incompetence, OGB mistakenly overbilled employees, their families, and retirees in the Preferred Provider Organization plan that is the subject of the contemplated change. The cost to the state could end up several millions of dollars. And thus the thin case against reform now has reached threadbare status.

Originally, the Administration had hoped the PPO change would already have occurred at the beginning of 2012, but such was the ruckus from the apologists that it slowed things down enough to delay it, and the savings, until the beginning of next year, and pledged to restart the process early this year. This new revelation only reemphasizes the necessity of investigating the possibility and, if positive for the state, getting it done despite the uninformed caterwauling of vested interests wishing to keep their jobs, perquisites, or ideological imperatives fulfilled.


Anonymous said...

Again, beyond incredible!!!!!

Mismanagement is a reason to outsource it!!!!

How about getting rid of those who are mismanaging (and their bosses, the Commissioner of Administration and his boss, the Governor)?????

The "analysis" you speak of was bought and paid for, by whom? The ones doing the mismanaging; surprise, surprise.

Let's see: we really can't run this thing like it should be (or we don't want to), so let's sell it and tell everyone what a good deal that is. We'll even pay some so-called expert to give us a report that says its a good deal.

Now, that is really governing!!!!

Jeff Sadow said...

This previous comment is the perfect example of the prejudicial, closed-minded approach some defenders of the current system have. They cannot dispute the facts that show their policy preference is inferior, so they try to impugn the messenger.

I assume what's being brought up here was the study. That was done by an organization independent of DOA, although paid for by DOA. The maximum $217 million estimate one-time revenue is a matter of judgment. But most of the figures in the report, clearly something the commenter has not read, are not judgment but a matter of public record. LA does employ about 150 people in OGB dealing with benefits, compared to much smaller staffs in other states. It does spend millions more a year doing this than other states. It does cost almost 3 times more per PPO member as opposed to the other plans to administer them. And so on and so forth. These are indisputable, yet naturally the commenter avoids any reference to them. Which leads one to believe this person has an agenda to favor certain interests that are incompatible with the best interest of ratepayers and taxpayers in LA.

Anonymous said...

So you accuse the commentor of "impugn[ing] the messenger".

Then you proceed to refer to the commentor as "prejudicial" and "close-minded." Are these designations you always use for people who might deign to disagree with you.

Later you accuse the commentor of being a "person who has an agenda". Your judgment that some might find an effort to belittle the messenger.

But you would not do that, would you?

And, to top it all off, you did not even attempt to address the suggestion that perhaps there is an effort to outsource matters that this administration cannot (or does not want to) manage.

Used a little misdirection, perhaps, by trying to impugn the commentor.

Next we see that now they want to outsource education to private schools. Wonder why, after four years in office.

Jeff Sadow said...

Seems that the second commenter, who may very well be the first, has a problem with reading comprehension.

The first comment based its entire argument in criticizing the notion of partial privatization by casting aspersions on the report, accusing the Jindal Administration of manipulating through payment its results. It addressed none of the facts, all part of the public record, contained in the report. I pointed out this attempt to shoot the messenger, noting that this often is a common trick to avoid the actual merits of the argument. And any discussion of presumed Administrative motive therefore is moot. It does not matter because the numbers show as does the experience of other states, regardless of any putative motive, that the "outsource" solution (which already works with the HMO and other plans) works better.

And, tellingly, this comment just as the previous one refuses to engage the debate on the issues and the data. All the facts I posed remain, unrebutted. Address those facts, try to explain them away -- or stand as another example of an opponent who cannot support his argument against the reform and must resort to name-calling and accusations of bad faith.