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11-18-04 Medicaid Is the Elephant in the Budget Tent in GA

…”Georgia’s Medicaid program now spends more than $ billion a year to provide healthcare services to low-income families, with about $ billion of that total coming from the state and the rest from federal funds. State officials are under pressure to hold down the costs of the program, which is the fastest-growing part of the state budget….”



November 16, 2004


Medicaid Is the Elephant in the ‘Budget Tent’ in GA


By Wendell Dawson, Editor, AVOC, Inc.


Medical costs are becoming unaffordable for most Americans and even health insurers.  Something has to be done.


Having had personal experience with an HMO, I am not convinced HMOs or private enterprise is the answer.   Health care cannot be driven by a “profit motive”.  Neither can it be a “blank check”.


Politicians with ‘budget axes” will not succeed at solving the problem.  It is more complicated than just reducing coverage.  AVOC has much confidence in Jim Burgess.  He is a good and talented person.  It will take persons like Tim Burgess (an Oconee County resident) to make improvements in the system.


Government needs to be involved.  Catastrophic health needs are facts of life.  There is no profit there.  Someway we have to find some balance.


Currently, we have three classes of medical needs: 1. Indigent care with unlimited resources through Medicaid; 2. Wealthy persons or government and corporate retirees with extra coverage insurance; 3. The middle class struggling with insurance carriers and limited budgets.


We have to find an answer to healthcare costs or they will bankrupt State, National and most family budgets!

The Georgia Report



November 10, 2004

DCH moves ahead with Medicaid privatization

By Tom Crawford

Georgia is moving ahead with plans to privatize a large portion of the Medicaid health insurance program for low-income families, but the changes being proposed are making a lot of people nervous.

Gov. Sonny Perdue announced plans in August to move a large portion of the Medicaid program into "care management organizations" (CMO’s) in which private healthcare companies would arrange for Medicaid patients to receive medical services from an approved network of doctors and hospitals.

The Department of Community Health (DCH) has held 17 meetings since then with doctors, hospital administrators, healthcare lobbyists and organizations representing low-income families to get their reactions to the governor’s proposal.

"I will tell you, they were not always pleasant meetings," said Kathy Driggers, the chief of managed care for DCH, at a Wednesday meeting of the state Board of Community Health. "We heard a lot of fear of change, fear of a loss of the status quo."

The people involved in Medicaid are afraid that access to healthcare will be reduced, the CMO’s will deny people the healthcare services they need, and large numbers of people will lose their medical care if one of the private CMO’s goes bankrupt, Driggers said.

Some healthcare providers are also concerned that they will be excluded from the networks that the CMO’s will establish to provide medical treatment, Driggers said. Independent pharmacies are worried that they will lose market share to the larger chains and be paid lower fees for dispensing prescriptions, she added.

Driggers said that she and other DCH officials also heard many cautionary comments about TennCare, an attempt by Tennessee to solve its Medicaid problem by implementing a privatized, managed care program.

Tennessee officials replaced Medicaid in 1994 with TennCare, but the private healthcare program ran up massive spending totals that threatened to overwhelm the state’s finances.

An audit report on TennCare released late last year warned that the program would soak up nearly every new dollar in state revenue over the next five years if spending was not brought under control.

''This is the worst picture I would have imagined," said Tennessee Gov. Phil Bredesen, a former healthcare executive, when the audit report was released. "What it means is, absent major changes, there is no money for employee raises. There is no money for education. There is no money for corrections. There is no money for other social services. That is obviously unacceptable.''

Even with these concerns, DCH Commissioner Tim Burgess said the department will soon send out requests for proposals from private healthcare companies that want to get the Medicaid business. The companies expected to bid include Blue Cross Blue Shield, Amerigroup, Centene, and Americhoice.

"What if we get these proposals and all of them cost 20 percent more than what we’re doing now?" asked Lloyd Eckberg, a member of the community health board.

"The simple answer is, we’ll stop," Burgess said.

DCH will divide the state into six regions, with at least two CMO’s in each of the regions administering the delivery of healthcare services to Medicaid and PeachCare patients. The first CMO’s would begin operating in late 2005 and the rest during 2006.

The privatized program initially would cover about one million people whose healthcare expenses account for about $.2 billion of the Medicaid and PeachCare budgets. The CMO’s would not be involved in the treatment of persons in the ABD (aged, blinded, disabled) programs or who are receiving long-term care in a nursing home – although medical care for these patients consumes the greatest share of the Medicaid funds.

Georgia’s Medicaid program now spends more than $ billion a year to provide healthcare services to low-income families, with about $ billion of that total coming from the state and the rest from federal funds. State officials are under pressure to hold down the costs of the program, which is the fastest-growing part of the state budget.

"This is not an overnight decision or a hare-brained idea," said community health board member Chris Stroud, an Albany obstetrician-gynecologist. "The fundamental problem is the trend line (in Medicaid expenses), and that’s what we’ve got to address. This is not TennCare."

When asked which states had used managed care approaches similar to the one planned by DCH, Driggers said, "There is no other state that is doing it the way we’re doing it." She said Arizona’s program was probably the most similar to what Georgia is proposing to do.

"I’m awfully concerned that we’re going to get a backlash," said Frank Rossiter, a retired Savannah physician who sits on the community health board. "Do we really have a handle on what we’re getting into?"