In Utah, nation, insurers and hospitals rush to reap riches from Medicaid - Salt Lake Tribune

Reform » Health safety net’s expansion is a game-changer for managed care groups.

Want to know what’s trending in health care?

Take a peek at former Utah Health Department chief David Sundwall’s email, where you’ll find consultants proclaiming Medicaid to be the biggest business opportunity in years.

"Get your share of the Medicaid market," beckons an Aug. 22 pitch from Corporate Research Group peddling "data critical to winning in this complex and expanding" arena.

Sundwall, who continues to influence health policy as vice chairman of the national Medicaid and CHIP Payment and Access Commission (MACPAC), is not opposed to corporations profiting from the federal-state insurance plan for the poor.

But he wonders, "Is this going to be on the backs of patients, or will this benefit them as well?"

He wants the MACPAC to weigh options for upgrading existing patient quality of care standards, which he says "we all feel are a bit anemic."

So, why the rush to dominate a government-regulated market bound for more regulation? Is it possible to wring profits from a program that already pays doctors 10 to 15 percent less than Medicare to care for some of the sickest, highest-cost patients, the disabled and poor?

That’s hard to say, says Bradley Herring, an associate professor at Johns Hopkins Bloomberg School of Public Health. "But Medicaid is where the growth is."

Already a $390 billion program, Medicaid is set to explode in 2014 under the Affordable Care Act, which calls for adding 13 million to 15 million enrollees.

States aren’t obligated to expand their programs, but managed care groups are betting most will, said Herring.

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The bulk of new enrollees will be working poor adults and children, a reasonably healthy, attractive customer base for insurers looking to expand their footprints, he said.

Adding to Medicaid’s allure: the rise of managed care.

"By now about half of Medicaid enrollees are in some form of private insurance plan," Herring said.

Recession-weary states, including Utah, have begun steering Medicaid patients into managed care networks that are paid lump monthly sums per patient. Spend more than allotted and the network loses; spend less and it shares in the leftovers.

Such arrangements are supposed to cut costs and improve care by removing the incentive for ordering unnecessary, and risky, tests and procedures.

"But the research I’ve done and examined from others shows there really haven’t been big savings," Herring said. "On the flip side, it hasn’t cost more to switch to managed care either."

Until recently, only a handful of insurers have had the heart to tackle Medicaid. That changed this summer when insurance giants Wellpoint and Aetna purchased two of the big leaders in the field, Amerigroup and Coventry.

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