We Have a Situation: Alabama’s Children Menaced by Out of State Vultures

My nurse has a phrase for various non-medical snafus, from a child showing up for his checkup a day early to a small snake that once slipped in through the back door.  “Dr. A,” she says calmly, “we have a situation.”

I’m going to borrow her phrase today.  We have a situation indeed:   hungry, out-of-state corporate vultures are circling Alabama’s already limited Medicaid money, and we need your help to fend them off.

Alabama’s legislators are being heavily lobbied to contract our state Medicaid program to for-profit managed care corporations. I’m told by reputable sources that it may be a “done deal.”  You may know about the projected shortfall to Alabama’s general fund, the part of our budget that pays for prisons, courts, Medicaid and other non-education expenses.   Several corporations have taken advantage of states in similar distress by offering to take over all their Medicaid services for a set fee.  The state gets relief from a budget headache, and the corporations get a windfall. 

What do poor children get?  Less healthcare for our money.

Let’s break it down.  Currently, Alabama Medicaid covers 465,504 children, at an average annual cost of $2,378 per child.  Even including children with chronic illnesses like congenital heart disease or cancer, children are a pretty inexpensive group.  Only 3% of Medicaid money goes to overhead, leaving $2306 to be spent on actual medical services.

If that same pot of money goes to a managed care corporation, do you think they will use 97% of it for medical care?  Losing only 3% to profit and overhead combined?   The Affordable Care Act says that the Medical Loss Ratio (MLR), the money spent on actual medical care, has to be at least 85% for large group policies.  That leaves $2021 per child for medical care, instead of $2306.

The managed care corporations say they are worth it—they can take our supposedly inefficient system and make it run better.  They say we don’t need that extra $300 or so per child for medical care.  They can find a better use for $140 million dollars.

They say patients are over-using resources.   I doubt if that is true, from personal experience.  Sure, sometimes parents think their children have a dangerous illness and they are wrong.  Contrary to propaganda, they don’t want to lose their minimum wage jobs by taking off time to go to the doctor, and they hate sitting in a crowded ER all night as much as we do.

They say doctors waste money by providing unneeded services.  Again, personal experience tells me otherwise.  As a group, pediatricians are fairly frugal.  We notoriously undercharge, despite repeated efforts by coding professionals to convince us our work is worth more.  What services will they decide are not needed—developmental screening?  Autism testing?  Dental care?  They will have a nurse reviewer who has never seen our patients decide whether what we do is medically necessary.

They love to say care is fragmented and they can coordinate it better, thereby saving money.  Maybe in some states, but not in Alabama.  We already have a very well-designed Patient First Network in which children have a personal pediatrician to coordinate care.  There’s always room for improvement. We are already in the process of addressing that through a pilot program of Patient Care Networks.  If there’s a way to save money while preserving quality of care, we will find it ourselves.

One of the corporations salivating over Alabama money is Amerigroup, a multi-state corporation based in Virginia.   They specialize in preying on struggling state Medicaid programs and reaping the profit.  They’re good scavengers—their current revenue is 6.2 billion with an EBITDA of 460 million.  After their cut in overhead (check out these salaries), another 7.4% of state Medicaid money is withheld from medical care of children.  They boast over $4 per share annual profit for shareholders.

The experience of other states in the claws of such programs has been dismal.  A whistleblower lawsuit was filed in Florida, because care to children became so limited.  We should pay attention and not jump over the cliff after them.

How do they limit care?  There are federal rules about minimum services state Medicaid programs must provide, so first they cut out any health-improving service over the minimum, no matter how helpful it is.  They limit panels of specialist providers, creating bottlenecks and waiting lists.  Then they pile on reams of paperwork every time a doctor wants to make a referral or do a test.  Even if they know they’ll eventually have to allow it, they like to keep those funds as long as possible. 

This costs physician offices so much in extra staff time and creates so much aggravation that many of them reluctantly drop out of the Medicaid program.  Then children have a wonderful shiny Medicaid card but can’t find a doctor to help them.  Their desperate parents take them to the emergency room.  Now we have truly fragmented care and dangerously clogged up emergency services.  The corporations won’t mind, because hospital money in Alabama comes from a different pile.  Plus they can always deny payment to the ER docs by saying it wasn’t a real emergency.

Pediatricians in Alabama have worked hard for many years to improve the health of our state’s children.  We volunteer on multiple committees, constantly developing new quality improvement initiatives.  Under corporate managed care, the damage to our system could be so severe it will take us decades to repair. 

Whenever my nurse comes to me with a “situation”, so far I’ve been able to manage.  I even got that little snake out of the office by myself.  But pediatricians can’t fight these powerful vultures alone. We need your help.

I’m posting this as a special column on Martin Luther King Day.  The great man once said, “Of all the forms of inequality, injustice in health care is the most shocking and inhumane.”  If managed “care” like this isn’t an injustice, I don’t know what is.  

Here’s your call to action.  Call (or even better, visit) your state legislators this week.  We don’t have much time before they go back into session—see them while they are in their home offices.  Tell them to get those corporate vultures away from our children and find another way to manage our Medicaid funds.  Don’t let them tell you there’s no way to get the money.  They can do it.

Spread this call to action wherever you can—every listserv, PAC and influential group or person you can think of.  Drop me an email to let me know how it goes. Tell our Legislature not to send our hard-earned tax money out of state.  We have abundant skill and knowledge already here.  Keep Alabama resources in Alabama, and keep Alabama’s future—our children—healthy.

 

 

 

 

 

 

 

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