COMMENTARY: Study of modernized managed care program points to best choice for Oklahoma
Published: February 24th, 2018
OKLAHOMA CITY – The Oklahoma Association of Health Plans (OAHP) released a study early this week outlining how Oklahoma can produce better health outcomes – and save almost $400 million over the next decade – by modernizing its Medicaid program. Milliman, the world’s largest providers of actuarial and related services and was a product of extensive research, produced the study for OAHP.
Currently, Oklahoma’s Medicaid system is operated by the Oklahoma Health Care Authority (OHCA) and runs on a fee-for-service basis. This means that when a provider performs a service they send a bill to OHCA and get a check in the mail. The costs of delivering care have grown over time, with few tools available to Oklahoma to control growth. Despite continual spending increases, Oklahoma has not received any return on this investment in the form of improved quality, outcomes or access.
This type of unpredictable system threatens to siphon critical funding from other state programs due to the lack of accountability within the current system serving 1 million Oklahomans, a quarter of all state residents. (The recent incident of the Oklahoma Health Care Authority running out of money to treat the flu epidemic is just one example that proves that the current system is not equipped to handle this type of stress.)
According to the study, modernizing Medicaid will work to prevent these types of scenarios from happening in the future while serving to modernize Oklahoma’s health care delivery system. By entering contracts, the state pays one lump sum to the managed care organizations, or MCO. Should something as catastrophic as another flu outbreak happen, the risk will be assumed by MCO versus the state.
Implementing Medicaid Managed Care will also provide Oklahoma with the ability to stabilize Medicaid spending, improve health outcomes, increase access and drive innovation to create a truly modernized Medicaid program.
“In this time of budget instability and a historic deficit, we as legislators must look at all ways possible to be fiscally responsible,” said Sen. Kim David, R- Porter.
A Medicaid managed care system provides budget predictability because of more efficient procedures and guidelines. Managed-care plans have already taken on an unprecedented role in providing health coverage to low-income Americans.
The report’s assessment provides a road map for improving health outcomes, providing tax dollar efficiency and accountability afforded by a modern, quality driven health care system for Oklahoma’s most vulnerable citizens.
“We have the opportunity to address inefficiencies, reduce redundant services and lowers costs, all while improving health care for Oklahomans,” said Rep. Glen Mulready, R-Tulsa.
This form of health care delivery is an innovative practice currently used by 40 other states to coordinate care and services for their Medicaid populations. This modern delivery system rewards advancements in the overall health of patients and produces savings and stability in state health care budgets.
After the Oklahoma Health Care Authority halted the effort to design a risk-based managed care program for the aged blind and disabled populations in 2017, the report highlights program infrastructure already in place in Oklahoma and lays out budgetary requirements and advantages as well as best practices that have been tested in other states.
“This type of proposal must be seriously considered by our state legislature as we continue to examine policies that may have lasting savings in our state budget. Managed care does not cut corners in service. The healthier the overall program, the more savings are achieved,” said Rep. Mulready.
The study will serve as a resource for legislators and Oklahoma Health Care Authority officials in understanding what the implementation of a modern health care will look like and how much money can be saved in Oklahoma.
“Now is not the time for us to shy away from health care innovation. A proposal to modernize Oklahoma’s health care system will be presented during the 2018 regular session,” said Sen. David.
NOTE: A full copy of the OAHP’s study is available at http://tiny.cc/OAHPMillimanStudy.)