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Don’t let Louisiana be locked into unproven reforms, PAR Says

Click here to download a copy of the report.

The Public Affairs Research Council today released a research brief outlining concerns with the state’s new health care reform agenda. “Assessing the Louisiana Health First Plan” urges caution as legislators quickly consider whether to support the Department of Health and Hospitals (DHH) effort to convert the state’s Medicaid program to a model that would apply managed care principles used in the private-sector insurance market.

The Louisiana Health First (LHF) plan would do the following:

  1. Reorganize the charity hospital system currently run by LSU by changing the function or governance of two hospitals: W.O. Moss in Lake Charles and Medical Center of Louisiana (MCLNO), aka Big Charity, in New Orleans.
  2. Expand Medicaid health coverage to more low-income adults.
  3. Develop a state subsidy program in which low-income employees and their employers would share the cost of private insurance premiums.
  4. Redesign the way Medicaid services are provided and paid for by adopting the model used in Florida, which coordinates care through HMO-style private companies.

PAR research generally supports the charity hospital reorganization and the development or redesign of programs that would expand health coverage to more of Louisiana’s uninsured citizens. However, this research brief identifies PAR concerns with each of the plan’s components. Two overarching concerns are that the proposed reforms would not be implemented on a statewide basis and that they would rely on non-recurring revenue to pay for ongoing services.

The brief compares the proposed redesign of the state’s Medicaid management system to other health care reform efforts around the nation. The changes proposed by DHH would model Louisiana’s plan after one implemented in a few Florida counties beginning in 2005. That program has shown mixed initial results. A better fit for this state might be the North Carolina model.

The North Carolina program differs significantly with respect to how it coordinates patient care and pays providers. It has operated statewide for several years with a high level of documented savings and has received high marks from independent reviewers.

PAR research finds that the Medicaid management program as proposed would threaten to divert funding from patient care toward a higher level of administrative cost. While there may be the potential for the proposed model to recoup those losses in the long run, a likely short-term scenario would either reduce the number of patients served or reduce the types of services offered. Either outcome would only serve to worsen the state of public health care in Louisiana.

Legislators are being asked to make a quick decision on whether to approve a DHH application to federal health authorities for special permission – a waiver – to implement the Medicaid management changes. PAR recommends that no waiver be requested unless it allows the state the flexibility to continue exploring the best set of management reforms for Louisiana. It is imperative that the state not be locked into the proposed Florida-style Medicaid management model until all other viable options have been fully explored.
The LHF plan is a welcome first step in the design of a comprehensive overhaul for public health care in Louisiana. This plan should be used as a starting point for public debate about the best set of reforms, but should not be misinterpreted to represent the result of a full vetting of all options by interested stakeholders.

The PAR research brief “Assessing the Louisiana Health First Plan” is available online at www.la-par.org.

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