MEDICAID MANAGED CARE: OH Failure Reflects National Trend
Despite the optimism of its early entrance into Medicaid managed care in 1995, Ohio today is in the midst of a premature exit. The Washington Post on Saturday took a close look at the Cincinnati market, which is struggling to provide care through a single HMO while thousands of beneficiaries make the return to the old system -- fee-for- service Medicaid. Shortly after the Medicaid managed care "experiment" began in Dayton, the plans began complaining "that Ohio and the federal government heaped on bureaucratic requirements" like mandatory drug tests for all pregnant beneficiaries. Such mandates proved costly, and in the first few years of the program, Ohio reduced Medicaid HMO reimbursements significantly three times -- the final cut a full 15% in Cincinnati. The result was elimination of "extra" services like plan-supported transportation to prenatal care appointments and the gradual refusal of some area providers to accept certain Medicaid HMO patients. One by one, Cincinnati HMOs began to drop out of the program, leaving enrollees to hunt and pick among the remaining HMO participants for coverage. On March 1 of this year with Cincinnati down to just one plan -- "thus violating a federal promise" of choice among at least two -- officials announced the decision to allow beneficiaries to "switch back to an old-style Medicaid card that lets them roam among any doctors, hospitals or clinics they can find."
The Bad Old Days
Cincinnati Health Commissioner Malcolm Adcock laments the city's return to a system "that is once again haphazard, uncoordinated and leaves patients to their own devices as to where to seek care." In addition to failing to provide patients with better- coordinated care, the state's Medicaid managed care program failed to affect beneficiaries' expensive habits. The HMO Choice Care, in 1996 the first HMO to exit the Cincinnati Medicaid market, reports that its Medicaid enrollees "continued to make trips to the emergency room four times as often as its patients who had private insurance." Only one in 10 Choice Care beneficiaries chose to visit suburban doctors, opting instead for public health clinics and "the pattern they historically had used -- care on a crisis basis." Meanwhile, beneficiaries are struggling to pay off bills the HMOs have refused to cover, and the state is waiting on a reply to its request "for a federal exemption to herd Cincinnati's Medicaid patients into the single health plan" remaining. That plan, the Cincinnati Area Health Plan, has "picked up" only about 3,000 of the 30,000 who have been dropped -- the rest choosing to return to fee-for-service Medicaid.
Not Just in the Heartland
Ohio, one of "45 states [that] have steered roughly half the nation's 40 million Medicaid recipients into HMOs and similar arrangements," is not alone in its failure. Maryland, which transferred 330,000 Medicaid enrollees into managed care in 1997, "discovered the experiment yielded only one-third of the $50 million in savings that state officials had expected the first year." Virginia has failed to expand its Medicaid managed care enrollment into its more affluent northern communities due to a dearth in interested HMOs. Often, the Washington Post reports, states, eager to cut costs, are at fault for the pull-outs, which typically result from insufficient reimbursements. Additionally, profit-driven private insurers may be "unreliable partners" and "ill-equipped for the special difficulties of caring for poor patients" (Goldstein, 8/14).