in Houston, Texas

Expansion of managed care for Medicaid patients coming to Rio Grande Valley. Will Texas see the expected $300 million savings?

Thursday, Sep 01, 2011, 07:09AM CST
By Mark Lisheron

Dr. William H. Torkildsen’s workdays are 12 hours or more, seeing 15 to 25 patients every day at his three rural clinics at the southern tip of Texas.

Torkildsen’s views of health care in the Rio Grande Valley could not be further removed, geographically and politically, from those argued in Austin before the passage of the health reform bill known as Senate Bill 7.

The bill, backed chiefly by Republicans and opposed chiefly by Democrats, ran on to more than 150 pages with dozens of moving parts and promises of saving nearly $470 million over the next two years. At its core, the reform bill turned aside longstanding objections to bring managed health care to the valley.

Managed care organizations are private companies that receive monthly payments set by the state for Medicaid clients who enroll with them and that contract with doctors and hospitals to provide for their care.

Prior to the passage of SB7, 1.3 million or 73 percent of the 1.78 million eligible Medicaid recipients in Texas were in a managed care program. Health and Human Services estimates that as many as 425,000 Medicaid recipients in the valley beginning next March will be filing their claims through a private managed care program rather than directly through the state.

Torkildsen heard all the talk. He signed on to managed care for his clinics in Harlingen, Port Isabel and Los Fresnos figuring it was time for some commonsense action.

“Health care’s a mess, right? I don’t think that’s much of a controversial statement,” Torkildsen said by phone a few days ago. “This health care system wastes a tremendous amount of money. It’s us doctors who have to become leaders in doing things differently.”

From the office of the state’s director for Medicaid on down, officials are hoping Torkildsen’s attitude is contagious. Savings to Texas taxpayers of $300 million of that two-year $470 million total are riding on it.

Director Billy Millwee is in charge of carrying out everything to do with Medicaid included in the bill, including establishing a quality-based Medicaid and Children’s Health Insurance Program (CHIP) payment advisory council. The department is expected to create the Texas Institute of Health Care Quality and Efficiency sometime after December of 2012.

Neither has the immediate cost savings expectations of expanding managed care into the valley, Millwee says.

Billy MillweeMILLWEE
“It is pretty daunting. These are rather sweeping reforms, but we have every reason to expect we’ll meet our timelines,” Millwee said during a recent interview. “There is no reason why we can’t realize those cost savings.”

Millwee’s work began months before the passage of SB 7 in late June, when it was clear the bill had enough legislative support to pass. His staff had a draft request for proposal, a cost analysis and a timeline for a March 1, 2012, launch for managed care in South Texas ready when the Legislature took their vote.

The state issued its proposal request in April for Health Maintenance Organizations (HMOs) to take over the management of Medicaid in 10 valley counties: Cameron, Duval, Hidalgo, Jim Hogg, Maverick, McMullen, Starr, Webb, Willacy and Zapata. It would be the largest one-time managed care expansion in Texas, Millwee said.

Of the 23 proposals for managed health and dental care, Health and Human Services chose five: Driscoll Children’s Hospital, HealthSpring, Molina Healthcare, Superior Health Plan and United Healthcare.

Logistics is a fraction of the battle when it comes to the valley. Even as managed care made its way to urban areas around Texas, a political bloc made up of doctors, hospitals and politicians had, until this past session, kept managed care out of South Texas.

The pressure to balance the state budget changed the dynamic of debate, even as it failed to soften resistance, Millwee says.

“There has been a bitter argument over managed care for a long time,” he says. “People feel like they are going to be squeezed out of their services.”

More specifically, Dr. Torkildsen says, there is a perception among patients that doctors and hospitals are being given incentives to withhold care. Applied properly, managed care will redirect care and force doctors and patients to change their definition of “services.”

Medicaid patients in the valley and elsewhere use the emergency room, for reasons as individual as they are, for their primary care office, one costing hundreds of dollars more than the other. The emergency room, unable to turn anyone away, treats whatever condition is at hand rather than the root of the problem.

“This is why we have one of the highest (hospital) readmission rates in the country,” Torkildsen says.

Busy and overworked, Torkildsen says doctors like him write prescriptions rather than getting patients to exercise and eat better to prevent high cholesterol, diabetes and heart ailments plaguing the valley.

“We fix their knees for them and their hearts for them, but we don’t do anything for them that prevents them from coming to us for surgery,” he says. “I think of managed care as a way to force patients to be partners in their health care and for us to practice medicine a little differently. Managed care puts the burden on us.”

To maintain their contracts with the state, the burden will be shared by the five HMOs. Chief among their responsibilities is establishing networks to direct clients to the care appropriate to their medical needs, Molina Healthcare’s senior vice president, Steve O’Dell, says.

O’Dell likes to point out that C. David Molina founded his company in response to the inadequate care and exorbitant expense he saw as an emergency room doctor in Long Beach, Calif.

The company that has operated managed care programs in Houston, San Antonio, Dallas and Laredo is hoping to attract as many as 135,000 clients in the valley, O’Dell says.

“We know about the history of not wanting managed care there, that the concept sounds big and onerous,” O’Dell says. “But our goal of building around primary care centers rather than emergency rooms is to give better, not less, care.”

This means a network of Molina employees, a clinician like one in Torkildsen’s offices and a patient making sure that only emergencies make it to the emergency room. “And if a patient has to be readmitted to the hospital we have to look at it as the result of failures in the system and to correct those failures,” O’Dell said.

For the taxpayer, managed care means the state sets the rates and how successfully costs are managed is up to the HMOs, Benjy Green, vice-president for Texas Medicaid for HealthSpring, says.

Green says his company’s outreach effort in the valley has been particularly intensive because of the preconceptions about managed care. He contends there is plenty of room to prove that more efficient and less costly care doesn’t mean less care.

“To make this successful the level of attention to each patient has to go up. We have to know what each patient needs, to be a health care coach,” he says. “We’re in charge of those hospital admissions, not the state. The more handholding, if I can use the word, we do the better off we’re going to be.”

Not only are the rates set, but the state has the option of withholding a 5 percent premium from companies that do not hit their targets, Millwee says.

And if everything were to go as outlined by Texas Medicaid officials, is $300 million less that taxpayers must spend realistic? “One thing I’ve learned in 30 years in managed care, whatever the number is, whatever they said, it won’t turn out,” O’Dell says with the laugh. “Those numbers are hard to predict. I will say that if you don’t have to be in an emergency room, you are going to realize a huge reduction in cost.”

“By pushing the HMOs to achieve their goals,” Millwee says, “I think it is realistic that we can meet that $300 million savings over the biennium.”
Contact Mark Lisheron at 512-299-2318 or or on Twitter at @marktxwatchdog.
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Photo of patient getting tetanus shot by flickr user blakespot, used via a Creative Commons license.
Thursday, 09/01/2011 - 11:25AM

The real savings would be not to be required to treat illegals. If they come to the emergency room they have to be treated.

Raymond Jamens
Friday, 09/02/2011 - 09:35AM

Illegals in ER make up a very, very small part of expenses. The ISSUE is improper use of ER services by everyone, especially good ole' US born Americans. These are the majority of expenses that nickel and dime the system. Also, ALL patients Medicaid or not dig their own graves. They are poor in their compliance and poor at taking care of themselves with preventive measures. If more people would visit their doctor at least 1-2 a year, AND follow a plan of action, many people would require less urgent care and hospitalization.

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