Restructuring Medicaid: Medical Savings Accounts for the Disabled

Is there no hope for curbing out-of-control Medicaid spending in Virginia without short-changing the poorest and most helpless members of our society? An experiment in Colorado with Consumer-Directed Attendant Support suggests that it is possible to save money and improve the quality of care for the severely disabled.

As reported in today’s Wall Street Journal op-ed page, the program allows patients to bypass the usual provider agencies and hire their own health aides. Half of any monthly savings goes into a personal account for approved purchases to advance the disabled person’s independence (such as voice-activated phones). In the first two years of the pilot program, average monthly spending was 21 percent under budget, while instances of abandonment, in which care givers failed to show up as scheduled, dropped to almost zero. As a pyschological benefit, Colorado Medicaid recipients felt more in control of their own health.

South Carolina, Flordia, Vermont and Arkansas are all looking at similar reforms. There was no word in the article about Virginia.

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  1. Will Vehrs Avatar
    Will Vehrs

    This is the kind of creative thinking that’s needed in government.

    If agencies worked together–Social Services or Medical Assistance informing the clients and small business support agencies working to develop more providers–good things could happen.

  2. Anonymous Avatar

    And this is where the rubber meets the road for all of us who complain about government spending and waste. Do the math and this is where the money is going, this is why the General Assembly majority preferred a tax increase to spending cuts — this is the program which is truly out of control. You’ve got the patients, their families who want somebody else to pay, and a giant medical-industrial complex absolutely addicted to the money and feeding a powerful lobby. It is the most potent combination at state capitols, and nobody wants to discuss the cost-benefit ratios of the money spent in the last 90-120 days of life. (Which brings in the pro-life army.) If Social Security is the third rail of federal politics, this is death-to-all-who-touch-it at the state level.

  3. I wonder if Colorado’s TABOR had anything to do with this program’s creation?

  4. Chris Brancato Avatar
    Chris Brancato

    Jim, great post.

    I am in the healthcare field as provider, adminstrator and executive. Medicaid is a losing proposition for many reasons. Unless the system can create enough mass to provide access to care equal to or surpassing private concerns, then we’re simply spitting in the wind. Providers are running from seeing Medicaid patients and in many cases, it cost them money to see Medicaid patients. First and foremost, as I said when I on the faculty of a medical school, “no one goes to medical school to be poor.” Follow the money.

    Additionally, lack of access rears it’s ugly head again by this example…The Feds and the State both funded health insurance for children under a program called FAMIS (FAMOUS). The program is still in existance.

    Every year since its implementation, the program has trouble giving the money away! There are many trust issues with government funded healthcare. Not everyone in the low income bracket appreciates the State being the benefactor.

    There are four tiers to the health system: 1) the top called the boutique care. The best money can by. 2)the tier for people with good insurance. 3) the people who have insurance but whom are under-insured. Add in this category people who have the means, but elect to not pay for health insurance. This trend is growing. I read a study on Monday of this week where providers/hospitals have the highest default rate with people who don’t have insurance but make over $50 K per year. Last but not least, the truly indigent or disabled who simply cannot afford even the meagerest of insurance plans.

    I’m of the opinion that money will not fix the problem of Medicaid. The administrative overhead for the Medicaid system is at least 15% higher than a comprable private insurer for much less coverage.

    Being a Wahoo, let me add that the Feds and the State can’t do the hokey-pokey. They either decide to grow a system to serve this lower tier (i.e.; a state run public health service with providers and facilities specific to serving the Medicaid population, or they should pack it in. Frankly, we all know they can’t walk away. So maybe, in some form of self-contridiction, money might be the solution. However, there is no way this or any other state can afford to do what I offer needs to be done.

  5. Jim Bacon Avatar
    Jim Bacon

    Chris, There’s no silver bullet to health care, but there are a lot of interesting ideas floating around. Are you familiar with a Richmond company called Health Management Corporation — they specialize in “disease management,” using nurses to work closely with patients who suffer from chronic diseases like asthma, diabetes and heart disease, coaxing paients into changing their lifestyles and properly following their medications. It strikes me that a greater emphasis on that kind of health care could pay big dividends.

  6. Steve Haner Avatar
    Steve Haner

    Here is an idea that will set this string humming. Let’s pair the proposals on the death tax with some Medicaid reform, since one of the common “estate planning” tactics is to transfer assets so far in advance that the older person qualifies on paper for Medicaid. Let’s look back for such transfers 20 years, and if any relative is sitting on the estate, make them pay the nursing home bill. I’d be a lot happier with making it easier to pass on an estate if we also closed this loophole that allows the lower generation to evade the cost of care.

  7. Will Vehrs Avatar
    Will Vehrs

    Steve, I’m with you. This scam must stop or be reformed into a reasonable allocation of an estate toward annual medical care.

  8. Chris Brancato Avatar
    Chris Brancato

    Jim, I am very familiar with HMC and their data, while small, is impressive. They are owned by Wellpoint-Anthem and their programs were developed to improve health and compliance to treatment. Early intervention is the key as you know.

    However, this is a meer drop in the bucket and I still contend that unless we seriously address the access to care by basing it in the communities, we’ll continue to paddle upstream.

    For those who contend that the Medcaid system isn’t work in Virginia, I urge you to look around at the following states, TN, NC and CA. In TN, their TennCare system is falling apart at the seems. In NC, the providers wait almost 90 days to get paid and when they do it’s less than 40 cents on the dollar.

    I’m with Will in stating that sweeping reform needs to happen while protecting those already in the system. The system is fat and bloated with 3+ pitting edema! Don’t know about you all, but I shake when I hear that the M’s (Medicare/Medicaid) are the largest payers in the country. Such a waste of money when you reflect on the overhead it takes to run a public/private system like that. Tsk, tsk, tsk.

    I’ll still hoping for a silver bullet Jim. We sure could use one.

  9. Chris Brancato Avatar
    Chris Brancato

    Jim, another thought that might be helpful. As you know, people in the Medicaid/Indigent sector of the population benefit from any of the disease management examples you posted.

    There is a reason why these programs are woefully inadequate in number largely because preventative health isn’t an American “tradition”. The Medical Industrial Complex (great book by the way) develops technology for spectaular life style issues to save lives in spectacular fashion. That’s where the money is.

    The population we’re discussing here is repleat with chronic disease as you mentioned. The only time they end up in the acute care system is when they are no longer acute, they are emergent. The absoultely worse case. The costs of ER care are 2 times higher than a doctors visit and the ER’s usually don’t have all the medical information necessary to sort out the multi-system disease presentation.

    This will have to take a monumental shift in our policy thinking to force people into preventative care model. The data is still inconclusive to know if it’s worth the investment.

    Go HOOS!

  10. Chris Brancato Avatar
    Chris Brancato

    This is timely. Group says the Medicare race disparity is narrowing.

  11. Informed Patriot Avatar
    Informed Patriot

    Don’t be surprised when a multitude of reforms to the Medicaid program are proposed this session. It truly is the 900 ton pac-man eating the state budget. I think increased disease management, something that Anthem has begun doing with DMAS, is a great idea that could easily be expanded to at least some additional chronic diseases. As far as the look-back period, that is federally mandated, but every indication is the feds are willing to allow states increased flexibility with this and many components of the program. These along with several consumer-based approach implementations and fraud controls would represent a huge mind and systemic adjustment to a program that has become an entitlement to middle class people for long-term care and a boondoggle for the many differing recipients currently covered. Lots of great ideas out there, I hope this not-too-sexy issue gets the attention it necessitates.

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