Florida’s Medicaid Cure

Foundation for Government Accountability

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The Problem

Medicaid is a vital safety net for Americans who are poor or disabled. Yet too often, a state’s Medicaid program does not actually improve health, achieve higher patient satisfaction and control taxpayer costs. Florida’s Medicaid Reform Pilot is different. It is a Medicaid Cure and it shows Massachusetts and other states how Medicaid can and should work, both for patients and for taxpayers.¹

Jackie’s Story

Jackie developed Type 2 diabetes six years ago. Now her diabetes is getting worse because she cannot get the care she needs. She had to drop her endocrinologist, Dr. Wong, because Medicaid reimbursements were too low.

Jackie grew up on welfare, and as a single mom, she vowed to make a better life for her and her son, Donovan. But she couldn’t get the care she needed. Now she’s getting sicker and can’t work as many hours. She had to stop taking classes toward her nursing degree.

Jackie then became part of Florida’s Medicaid Cure. Rather than Old Medicaid’s single take-it-orleave- it plan, Jackie can choose among 11 plans. She finds one with Dr. Wong in network. The plan has added benefits she needs, like over-the-counter medication.

Now that Jackie can manage her diabetes and get preventive care for her and her son, she gets up to $250 in financial rewards a year. That’s a cash incentive for taking control of her health – like she always wanted to.

18 months later, Jackie is in good health, finished school, and took a job at a local hospital. She’s getting private insurance and moved into a nicer place in the same school district. Donovan reads to her every night. Florida’s Medicaid Cure saved Jackie’s life.

Good health, a better life. That’s how Medicaid works with Florida’s Medicaid Cure. Florida’s Reform Pilot shows how to build a Medicaid Cure that is pro-patient and pro-taxpayer.

The Proposed Solution

Imagine building a home. Under Old Medicaid, the state controls every step. The state draws up the blueprints for a $100,000 house. The state decides which materials to use. And the state does the building.

The finished product? An over-budget, high cost Medicaid house. It’s dull, leaky and run down. It’s a house inside which no one wants to live, but Medicaid patients are trapped.

What about Medicaid managed care? A little better than the Old Medicaid house, but the state still drew up the plans, and picked the materials. The only difference is the state hired a contractor to do the building. It’s still costly and run down.

But Florida’s Medicaid Cure is different. The Medicaid Cure doesn’t just tweak what’s old like managed care does. It’s built from the bottom-up to transform Medicaid with free market principles.

Under the Medicaid Cure, we have $100,000 and want a Medicaid house built that is at least 1,800 square feet, and has a minimum of three bedrooms and two baths. Instead of the state blueprints, private developers design and build houses that meet the state’s minimum requirements, but maximize the value. The result is several higher quality Medicaid homes, and the patient gets to choose in which one to live. Florida’s Medicaid Cure is built brand new. It’s a Medicaid home inside which patients are healthier and happier.

Overview of Florida’s Medicaid Cure

• Passed in 2006 as a five-county Medicaid Reform Pilot with bipartisan support
• Goals of the Reform Pilot: more choice, expanded services, competition among plans, improved access to specialists, better health outcomes, ability to opt-out for private coverage, and higher patient satisfaction
• Has already saved Florida taxpayers $118 million annually
• Achieves 16.8% savings per person for families and children, and 10.9% savings per person for elderly and disabled compared to estimated Florida averages
• Patient health outcomes exceed national Old Medicaid average in 53% of target areas, and near national average in another 15% (64% better in Reform than non-Reform counties)

How the Medicaid Cure Would Change Current Practice

• Patients have the power to choose among many different personalized health plans
• Patients can change plans annually, for any reason at all—if they don’t have access to certain doctors, medications, services or hospitals; or if they are not treated well by the plan
• Medicaid managed care plans compete on value, not cost, and they are incentivized to maximize value and make patients happier and healthier
• Policymakers focus on health outcomes, not controlling the delivery of health care services
• Budgeting is more stable and predictable

Costs and Benefits of the Medicaid Cure Compared to the Status Quo

The benefits of implementing the Medicaid Cure in the other 49 states are enormous. First, patients will move from a government-centered system to one where they have the power and freedom to choose the best plan, are rewarded for maintaining and improving health, and have access to benefits and services not available save in Florida. Second, patients would have better health and satisfaction outcomes, compared to the U.S. average for Medicaid managed care. And third, taxpayers would save billions on a lower cost, higher-performing safety net.

In current Medicaid Reform counties, Florida spends$10,115 per SSI Medicaid patient and $1,584 per TANF Medicaid patient (over age 1) compared to a U.S. average of $16,183 and $2,563, respectively. If all states replicated Florida’s value-based Medicaid Cure and achieved similar spending per Medicaid patient for all 5.8 million SSI Medicaid patients and 44.4 million TANF Medicaid patients in America (over age 1), taxpayers would save $78.9 billion in fiscal year 2012 alone. Total savings over the next decade would be more than $1 trillion.

Implementing the Medicaid Cure in Massachusetts

Right now, Massachusetts Medicaid patients choose among managed care plans simply based on the doctors within each plan’s network. Unlike Florida, Medicaid patients cannot get different or additional benefits by choosing one plan over another.

Regarding Medicaid managed care patients’ Health Outcomes, Massachusetts only reports on 9 of the 30 HEDIS (Healthcare Effectiveness Data and Information Set, developed by the National Committee for Quality Assurance) health outcomes that Florida’s tracks for its Medicaid patients.² In a third of the HEDIS measures reported in both Massachusetts and Florida, Florida’s Medicaid Reform Pilot patients had better outcomes. Such comparisons are difficult, since Massachusetts reports fewer outcomes than Florida.

Implementation in Massachusetts is less difficult, given that the framework is already in place:

• Massachusetts already has a strong presence of statewide Medicaid managed care (63.7 percent³ of all Medicaid recipients in comprehensive managed care)
• Massachusetts has few benefits carved out of managed care (just dental, non-emergency transportation and vision, which would have to become part of the private plans)
• Massachusetts already has reporting of HEDIS health outcomes and CAHPS patient satisfaction surveys (although this is not required in Massachusetts, but is required as part of the Cure)
• Massachusetts already has an 1115 waiver that would simply need to be amended⁴

Conclusion

States looking to replicate Florida’s Medicaid Cure would need to change their Medicaid statutes to give the lead Medicaid agency authority to establish this patient-centered approach. But with the solutions and outcomes provided by Florida’s Medicaid Cure, and the fact that it is truly pro-patient and pro-taxpayer, it would definitely benefit any state. It has proven to work in the Sunshine State, and with the right focus and support, it can work anywhere.

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Endnotes

1. For an extensive 24-page report about Florida’s Medicaid Reform Pilot please read: Bragdon, Tarren. “Florida’s Medicaid Reform Shows the Way to Improve Health, Increase Satisfaction, and Control Costs.” The Heritage Foundation. November 9, 2011. Available at: http://www.floridafga.org/2011/11/a-medicaid-cure-floridas-medicaid-reform-pilot/
2. Costanzo, Terri et al. “MassHealth Managed Care HEDIS 2010 Final Report.” Center for Health Policy and Research at UMass Medical School.” November 2010. Available at: http://www.mass.gov/eohhs/docs/masshealth/research/ hedis-2010.pdf
3. “Medicaid Enrollment in Comprehensive Managed Care as a Share of Total Medicaid Enrollment.” Kaiser Family Foundation’s StateHealthFacts.org. October 2010. Available at: http://www.statehealthfacts.org/comparemaptable. jsp?ind=985&cat=4
4. Gifford, Kathleen et al. “A Profile of Medicaid Managed Care Programs in 2010: Findings from a 50-State Survey.” Kaiser Family Foundation. September 2011. Pages 52-53, 58, 63, 64, and 72. Available at: http://www.kff.org/medicaid/8220.cfm