Quick and dirty Medicaid overhaul study isn't worth $100,000

If you are dealing with a major redesign of the most complex portion of state government in Alaska, it would make sense to avoid the quick-and-dirty brand of consultant report, while making sure that all the relevant questions are asked and answered.

That would make sense, but it’s not what Gov. Mike Dunleavy is doing with his proposed overhaul of Medicaid.

The Department of Health and Social Services announced it wants to hire a consultant May 30 for $100,000 to produce a report in one month proving that a one-page plan to change health care for hundreds of thousands of Alaskans makes sense for Alaska.

The $100,000 “Proof of Concept Analysis” promises to be heavy on boilerplate and light on the real challenges facing the health care system in Alaska and the program under which nearly 30 percent of Alaskans are covered.

Health commissioner Adam Crum, whose main experience before his state job was with his family-owned truck-driving and construction academy, hasn’t explained the details of how he is going to move Alaskans from Medicaid to private insurance and what the impacts will be on hospitals, clinics, doctors, nurses, etc.

Dunleavy, who campaigned on making Medicaid more efficient, now uses the word “unsustainable” to describe the system, which is funded by hundreds of millions from the state and the federal government. He wants to cut Medicaid spending by more than $700 million, a majority of that federal money that he wants to reject, but he is unable or unwilling to explain the impact of his plan on individuals and institutions.

The state produced a one-page paper that it puffs up as a “reform initiative concept paper” for Mediciad. It mentions moving thousands of Medicaid patients to the subsidized Obamacare insurance market and paying the health insurance premiums for those people with Medicaid money.

The “reform initiative concept paper,” which is really a list of talking points and white space, features feel-good declarations, such as “We can and must do better to ensure Alaskans have access to health care coverage.”

The consultant that conducts the one-month study will be asked to prove that the notes on page 20 of this document are what we’ve all been waiting for. No one should trust this approach.

Under the Dunleavy guidelines, the future consultant hired for the job must have worked with two states already on ways to cut Medicaid costs, so perhaps the administration has a specific firm in mind.

The one-pager, created by the wishful thinking branch of the health department, suggests that new insurance companies will flood the market to serve new customers moved into Obamacare and out of Medicaid.

Medicaid patients who are old, disabled, far below the poverty line or “medically fragile,” would stay on the current system. The others would be moved to private Obamacare insurance.

“These new entrants to the marketplace should attract new insurance providers to Alaska to serve those in the marketplace,” is how Crum’s department refers to its dream. “This increased competition among insurers may be an important tool to help lower the cost of health care coverage for all Alaskans.”

“The base approach of the initiative is to combine a private option for the Medicaid program with elements that will ensure cost savings and cost control,” the state tells prospective consultants.

But ideology is not reality. As DJ Wilson points out, most of the beneficiaries the state wants to move to private insurance don’t cost the state much now and private insurance will be more expensive, meaning the state will pay more. That means this won’t work.

The one-month study is to include “an analysis of the use of private market coverage for Medicaid enrollees, potential incorporation of a work requirement component into the program and waiver, the potential for use of a block grant to bring forward the concept, and recommendations for items outside of the Medicaid program, such as referenced based rates, that will enhance the redesign concept.”

Just last month Crum told legislators that block grants are “not our main plan.”

The consultant will collect $100,000 and produce a “Proof of Concept Analysis” by the end of June that won’t prove much except that the Dunleavy administration is promising more than it can deliver.

dermotmcole@gmail.com