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Tuesday, June 11, 2013
Open Letter: Hawaii MDs Challenge “Severely Dysfunctional” Medicaid Program
By Dr Stephen Kemble MD @ 8:38 PM :: 6843 Views :: Health Care

Dear Gov. Abercrombie,   April 21, 2013

Throughout the Health Transformation Initiative meetings over the past year, I have been pointing out repeatedly that from the point of view of patients attempting to obtain care, our Medicaid program is severely dysfunctional, and this is due to the managed care system implemented by previous administrations. There are two major challenges for implementation of the Affordable Care Act - Medicaid expansion and the Insurance Exchange, and for Hawaii, Medicaid is the larger of these challenges. I know it is an inconvenience for your administration to have to rethink how Medicaid is implemented at this time, but failure to do so will guarantee that Hawaii will fail to achieve any of the "triple aims" of improved quality, improved population health, and improved value. For DHS, Medicaid managed care provides the convenience of contracting out the administration of Medicaid, but in every other way the program is a failure, including cost. I have already shared the data on this with many of you.

I circulated the "Open Letter" petition below to everyone working in Queen Emma Clinic that I could find, and colleagues passed it around at other health centers serving predominantly Medicaid patients. We gathered 131 signatures in 2 weeks, including almost everyone who saw it. This includes physicians, doctors in training, medical students, health center administrators, nurses, psychologists, social workers, dental workers, nutritionists, pharmacists, medical assistants, case managers, billers, medical records staff, transportation workers, and other clinic staff. Most work in community health centers on Oahu, Maui, and Molokai, and some are in private practice, but all are involved in caring for Medicaid patients. I know of only two people who saw the petition and declined to sign, and both said they agreed with everything in the second paragraph but did not know enough about the enhanced Primary Care Case Management model, so they declined to sign. As far as I can tell, there is unanimity among those helping to provide care to Medicaid patients that Hawaii's Medicaid managed care system is not working, and I have been unable to fathom why your administration has so far refused to acknowledge the significance of this problem.

Stephen Kemble, MD

(Dr. Kemble is President of the Hawaii Medical Association and is a member of the Hawaii Health Authority and the Community Care Networks Committee of the Hawaii Health Project.)


April 2013

We the undersigned are providing care for Medicaid beneficiaries.

The State of Hawaii has converted fee-for-service Medicaid to managed care by competing managed care plans, under a “Section 1115 waiver” that is up for renewal, effective January 2014. Hawaii’s Department of Human Services (DHS) is now considering how to structure Medicaid for the 5-year period from 2014 through 2018.

The conversion to Medicaid managed care has enabled the State to contract for Medicaid services for a known annual budget and it has “outsourced” administration of Medicaid to private contractors. However, Hawaii’s Medicaid costs have continued to rise significantly faster than the national average since implementation of Medicaid managed care, and in our experience managed care has led to serious problems in delivery of care to the Medicaid population. These include loss of accountability to the recipients and providers of care, numerous obstructions to care due to unreasonable and restrictive formularies and prior authorization policies, poor coordination of pharmacy benefits and transportation services, disruptions in care when patients switch plans, and loss of both specialists and primary care providers in the community willing to accept referrals of Medicaid patients. Physicians in training are being deterred by their negative experiences with Medicaid managed care from accepting Medicaid patients when they go into practice. The community health centers are overloaded, and access to care for beneficiaries has become a serious problem. In addition, DHS policies intended to tighten up eligibility have led to frequent problems with inappropriate dis-enrollments followed by re-enrollments, further disrupting care. All of these are associated with increased administrative costs for the health plans, for the Department of Human Services, and for Medicaid providers.

A better alternative for Medicaid is enhanced Primary Care Case Management (ePCCM), based on the successful Community Care of North Carolina (CCNH) model. The CCNH program covers all of Medicaid in North Carolina and it was developed by a coalition of groups of doctors, hospitals, and North Carolina’s Department of Human Services, without a layer of competing managed care organizations. Vermont, Connecticut, Oregon and other states are implementing similar reforms for their Medicaid programs.  Enhanced PCCM is organized around primary care in the form of “patient-centered medical homes.” Independent physicians are paid with fee-for-service and primary care providers are paid an additional per-member-per-month care coordination fee.  The system as a whole pays for community based care coordination and specialized services for patients with complex needs and to overcome barriers to care, enhancing the ability of primary care providers to handle complex cases in the community. Savings from reduced ER and hospital use are kept within the system and used to fund physician-directed quality improvement (instead of insurance plan directed managed care) and to keep physician fees reasonable. A unified enhanced Primary Care Case Management system assumes shared responsibility for meeting the health care needs of the entire Medicaid population. Physician participation and morale in North Carolina’s ePCCM Medicaid program have been very good, and growth in their Medicaid costs has slowed to the lowest in the country. Giving primary care doctors the tools they need to manage care themselves and a shared savings incentive to keep care cost effective have proven far more effective and less expensive to administer than managed care strategies implemented by competing managed care plans.

We the undersigned urge Hawaii’s DHS to abandon the failed model of competing managed care plans, and adopt Medicaid reform using enhanced Primary Care Case Management.

(131 Signatures)


UPDATE: Email Chain Reveals Hawaii Obamacare Leaders Debating “Inevitable Failure”


Star-Adv April 21, 2013: Hawaii should end Medicaid managed-care model

September 5, 2012: Hawaii QUEST Expanded Section 1115 Demonstration Waiver Interim Demonstration Evaluation Report (“…we are not meeting the requirements that we have established….” -- pg 54)

Community Care of North Carolina


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