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Story Archives: Four horsemen of the healthcare apocalypse


Four horsemen of the healthcare apocalypse
by John Maginnis - posted Wednesday, December 3rd, 2008 @ 8:54 pmE-mail Story E-mail Story | Print Story Print Story 
Now for the hard part. The first year of the terms of the new governor and largely new Legislature went smoothly, thanks to extra billions of dollars of revenue and an agenda short on difficult issues.

Gov. Bobby Jindal aided his fast start by postponing action on the toughest of the challenges he promised to meet: how to restructure the public healthcare system so as to improve poor outcomes while controlling escalating costs--a task complicated by state government's worsening financial picture. This week, the administration began to publicly lay out the situation in a briefing to the House of Representatives.

Past governors and legislatures have explored changes to public healthcare while making few. But the Jindal administration is being driven by a new urgency of a combination of looming problems. In a recent interview, Health and Hospitals Secretary Alan Levine ominously termed them the "Four Horsemen of the Healthcare Apocalypse."

Any one of those would be a major problem, said Levine, "but combining the four of them is just incredible." He believes the challenges can only be met by fundamentally changing how the state's largest (and growing) department does business, pending approval by federal Medicaid officials and the Legislature.

First, the horsemen who are bearing down on Louisiana healthcare.

The lead rider is the spiraling cost of the state Medicaid program, at $7 billion and counting. The state pays 28 percent and the feds pick up the rest. In 2004, public healthcare accounted for 8.5 percent of the state budget, rising to 16 percent this year and projected to swell to 21 percent by 2011. Rampaging costs threaten to crowd out investments in education and every other part of the budget.

Secondly, the overall cost problem is being aggravated by the growing expense of care for the uninsured (the working poor who aren't poor enough for Medicaid) at the state's public hospitals. Unlike Medicaid, federal reimbursement for this uncompensated care is capped. That cap is nearly reached, over which the state must pay the full cost.

Then there is the funding gap for the proposed $1.2 billion LSU hospital in New Orleans to replace Big Charity, which has been shuttered since Hurricane Katrina. The Legislature has set aside $300 million in cash, but the big hangup is the state claims it is due $494 million from the Federal Emergency Management Agency, which has offered only $23 million. If Jindal has not been able to get the Bush White House to bring FEMA around, can he expect any more from the Obama administration?

But perhaps the most pressing of the four problems is a long-running dispute with federal officials over $771 million in disallowed reimbursements going back 10 years. Only about half of the overpayments relate to healthcare, but the feds are threatening to deduct the full amount from Medicaid funds over the next few years.

To meet the apocalyptic herd, the Jindal administration looks to begin transforming the healthcare delivery system to create short- and long-term solutions.

Instead of paying back $771 million to the federal government, the state is proposing using that money to expand Medicaid coverage in two pilot programs. Both would expand Medicaid eligibility to targeted groups of uninsured people, who currently seek treatment in the emergency rooms of public hospitals. Moving more uninsured to Medicaid would relieve pressure on the federal payment cap for uncompensated care, sparing the state huge future cost increases.

But it would not be Medicaid coverage as we know it. The biggest and the most controversial change would be to replace the current fee-for-service system with a coordinate system whereby networks of private providers would be paid a set rate for each Medicaid patient enrolled. Levine cites other states where a coordinated care system has improved the overall health of patients while containing the growth of costs. Not everyone agrees.

The state's pediatricians, who treat the greatest volume of Medicaid patients, oppose scrapping the fee-for-service system. They claim that putting hundreds of thousands of children into commercial managed-care could harm patients and drive away doctors.

That debate and many related ones over healthcare solutions will take place in the next session of the Legislature. For now, though, lawmakers are just beginning to grasp the enormity of the problems facing them--a big switch from the year

John Maginnis is a Baton Rouge-based columnist who writes about Louisiana Politics. He can be reached by emailing lapolitics@cox.net.
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