Managed Care vs. Fee For Service for “Dual Eligible” seniors . . . do you know what is best?

By Steve Moran

This falls under the “Why is this whole health care thing so damned complicated and confusing?” — along with “What the heck is actually best for people and society?”

A reader, Merijane McTalley, sent me an article from the titled Ohio nursing homes ask lawmakers to delay Medicaid changes for long-term care patients. The issue is managed care vs. a fee-for-service model for “dual eligible” seniors (those whose care is financed by Medicare and Medicaid). I have read the article, more or less understand the issues, but it is impossible to get any kind of a real sense about what is best for seniors, or society.

The Issue

The State of Ohio has been fairly aggressive in moving Medicaid recipients into managed care plans. Today about 90% of all Medicaid eligible residents are covered by a managed care plan. With the exception of a modest-sized demonstration project, most dual eligible nursing home residents are still covered under a more traditional fee-for-service plan.

The state and the healthcare plan trade association argue managed care is saving the state huge amounts of money (more than just an argument, it is clear this is true). And that the savings come, in part, because the insurance companies are better at controlling costs (negotiating rates) and through better case management, leading to better care.

The nursing home association, local Area Agencies on Aging and other advocacy groups are happy with the initial results of the managed care for dual eligibles in the demonstration project. They argue there have been problems with accurate and timely payment of providers, and with patients being denied services.

According to Peter Van Runkle, executive director of the Ohio Healthcare Association, “Managed care is about limiting care . . . that’s how they make money. We have to deal with that. Our patients are either getting denied care or care is delayed by introducing managed care into the situation.”

Competing Interests

Here is the problem . . .

There are three powerful, competing interests:

  1. The state that wants to save money (and at least theoretically improve care)
  2. The health care plans that will make more money if the shifts occur
  3. The nursing home industry that will see their incomes eroded if the shift occurs

Despite having spent several hours reading news articles and reports, I am sorry to tell you that I have absolutely zero idea who is right. This is because at the end of the day each group is primarily interested in protecting that group’s interests.

This ought to drive us crazy. While we know this whole healthcare system is a big, messy, slimy hairball, the goal has to be providing the best outcomes at the lowest cost to the taxpayer. Someone ought to lock the parties in a room — with only sleeping pads, bread and water — and tell them they can’t come out until they figure out what is best for the people of Ohio.

This is not as simple as one side winning over the other two sides, it is about about poor, frail, elderly people. It is about the taxpayers of Ohio, their children and their grandchildren.  

This is a microcosm of what is happening in the country and it is hurting, not only this generation, but future generations as well.  

As an industry, we must be a part of the solution. It may mean some will take a hit, but others will win. We must be willing to sit at the table and talk about what is really working and what is not. This was the ultimate theme of the NIC conference in San Diego, making it one of the most forward-looking events I have ever attended.

Finally, I would note that I sent a draft copy of this article to both the Ohio Healthcare Association and the Ohio Managed Care Association. Neither have responded.

Rant over . . . for now.