TennCare, Tennessee's controversial Medicaid managed-care program, may have created an administrative nightmare for insurers, squeezed Medicaid payments to providers and confused Medicaid recipients and the poor.
But one group has greatly benefited from the program: health services researchers. Government agencies and philanthropic foundations are paying millions of dollars to universities, private research companies and various think tanks to study the impact of TennCare on cost, access and quality.
While each team of researchers says the focus of its work is unique and feeds a growing demand from healthcare policymakers for knowledge about TennCare, much of the research seems remarkably similar. Although the size, scope and methodologies are different, they all deal with TennCare's implementation and subsequent impact on cost, quality and access.
Studying Tenn-Care appears to have become a cottage industry within the health services research field, employing dozens of people through layers of contractual and subcontractual relationships among some of the most prominent research organizations in the country.
For example, the latest researchers to hop on the TennCare study train are from Duke University Medical Center in Durham, N.C., and Vanderbilt University in Nashville, Tenn. Last month, the Robert Wood Johnson Foundation, a Princeton, N.J.-based philanthropy, awarded a team of researchers from the universities a $500,000 grant to conduct a 30-month study of TennCare.
"This will be the first hard look at whether this living experiment is reaching the patients it needs to and providing the quality care that it should," said Frank Sloan, the lead researcher from Duke, in a May 30 press release from Duke University.
Sloan's characterization of the Duke-Vanderbilt research as cutting-edge may be news to HCFA, the General Accounting Office, the Henry J. Kaiser Family Foundation, the Commonwealth Fund, the Urban Institute, Mathematica Policy Research and Frederick Schneiders Research.
Those groups and others are funding, have completed or currently are engaged in similar cutting-edge research on TennCare. And the program is just 21/2 years old.
TennCare replaced Tennessee's traditional Medicaid program on Jan. 1, 1994. Under the program, former Medicaid recipients and previously uninsured poor residents are enrolled in one of 12 private health plans called managed-care organizations, or MCOs.
The state pays the MCOs a fixed rate per enrollee, and the MCOs in turn subcontract with individual providers on a discounted fee-for-service basis. Enrollees in MCOs generally are required to receive care from their MCO's provider network, but providers can join more than one MCO.
In the fiscal year starting July 1, TennCare's budget is about $3.3 billion. Enrollment in the program is expected to be about 1.2 million. The state had no estimate of the number of people eligible for Tenn-Care who aren't enrolled in the program.
The speed at which the state dropped the program on recipients, hospitals, physicians and insurers created much consternation among the groups, which struggled to implement a new Medicaid system virtually overnight. HHS granted the state's Medicaid waiver request to implement TennCare in November 1993, and the program went into effect just two months later.
One of the first beneficiaries of TennCare's implementation was a for-profit research company called Mathematica Policy Research, which also is based in Princeton, N.J.
Shortly after TennCare was cranked up, the Henry J. Kaiser Family Foundation and the Commonwealth Fund, two national philanthropies, awarded Mathematica a research grant to conduct a series of case studies of Medicaid restructuring programs in seven states: California, Florida, Minnesota, New York, Oregon, Tennessee and Texas. Mathematica released its 59-page report on TennCare for Kaiser and Commonwealth last July.
Kaiser and Commonwealth awarded the grant to Mathematica as part of its joint program dubbed the Low Income Coverage and Access Project, a series of jointly funded research projects looking at access to care for the poor, said Alina Salganicoff, a senior policy analyst in Kaiser's Washington office. Other projects include conducting focus groups with and surveying Medicaid recipients in the same seven states.
Salganicoff said Kaiser and Commonwealth are spending more than $1 million on the research projects, and Mathematica "has a piece of that."
Also enjoying a piece of that pie is the Washington-based Frederick Schneiders Research, which last month released a 179-page report based on focus-group interviews with Medicaid beneficiaries in five states, including Tennessee.
Mathematica, meanwhile, also has the "official" TennCare evaluation contract from HHS. The five-year, $6.8 million contract to evaluate the impact of Medicaid managed-care programs in five states on costs, access and quality on behalf of the government began in September 1994 and runs through August 1999, said Judith Wooldridge, vice president of Mathematica. The other states include Hawaii, Oklahoma, Rhode Island and Vermont.
"This work is really quite different from the work we did for Kaiser," Wooldridge said. "That was primarily an implementation study. It had no measures of access."
According to Wooldridge, it will be the first TennCare study to closely examine the impact of the program on the beneficiaries themselves, along with an examination of TennCare's impact on Medicaid costs in the state.
To assist it with the five-state study, Mathematica has subcontracted with the Urban Institute, a Washington-based think tank. According to Leighton Ku, a senior research associate at the Urban Institute, the organization will help Mathematica with the case studies and the analysis of before-and-after Medicaid expenditures.
Ku said the project is the second by the Urban Institute involving TennCare. In 1994, with funding from the Robert Wood Johnson Foundation, the Urban Institute did a small study of Medicaid waivers, including some case studies from Tennessee, Ku said.
The Robert Wood Johnson Foundation, meanwhile, is well aware of the HCFA-funded evaluation of TennCare, and the new project it's paying Duke and Vanderbilt for is different, said Nancy Barrand, a senior program officer at the foundation who's overseeing the Duke-Vanderbilt research.
As part of the foundation's review of the Duke-Vanderbilt grant request, the foundation looked at other TennCare research and concluded that the new project "would add to and not duplicate the work on TennCare," she said. "We wanted to make sure there would be some synergy."
In addition to not rerunning the official HCFA study, the Duke-Vanderbilt work is important simply because it's not sponsored by HCFA, said Duke's Sloan in an interview.
"We are contributing an independent view. There are some things HCFA doesn't want to talk about," Sloan said.
Barrand also defended the amount of money that the foundation awarded to Duke and Vanderbilt researchers: "For the size and scope of the project, the ($500,000) grant is commensurate with what will be accomplished."
All the expensive research being done on the same Medicaid managed-care program is becoming comical to some providers in Tennessee, who are bombarded with new interview requests from researchers.
"TennCare has been studied a great deal. During 1994 and 1995 literally someone or some organization on a monthly basis released a study on some aspect of TennCare," said Burt Waller, president and chief executive officer of The Regional Medical Center at Memphis (Tenn.), or "The Med."
Last year, the National Association of Public Hospitals used The Med as its poster child to illustrate the financial squeeze that Medicaid managed care can put on public hospitals (April 3, 1995, p. 28).
Despite the dire predictions of drastic work-force reductions and service cuts necessitated by TennCare, things didn't turn out that bad, Waller acknowledged. A sympathetic state Legislation gave The Med a one-time grant of $12 million last year, and it restored state payments for graduate medical education this year, which will give The Med another $10 million.
When told of the new Duke-Vanderbilt study, Waller expressed some skepticism about its value: "By the time their study is complete, the federal waiver that created TennCare will have expired. You'll have a study released in the year 2000 that talks about the effect TennCare had on patients in 1995."
Ginger Parra, a spokeswoman for the TennCare program, said the program welcomed the new in-depth study of TennCare by Duke and Vanderbilt.
"There really hasn't been any real research done," Parra maintained. "What's been done mostly has been anecdotal, case-study type stuff."
Waller said the new study may have some value for other states thinking about implementing programs similar to TennCare. And that's the health services research field's primary defense of why so many researchers are studying the impact of TennCare.
"TennCare was a bold experiment, and it's important to take every chance to study it," said Kaiser's Salganicoff.
The Urban Institute's Ku said, "I'm sure TennCare officials are getting tired of being interviewed, but it's really one of the most important developments in healthcare delivery in a long time. Part of what makes TennCare attractive is the sudden change of putting all Medicaid recipients in managed care at once. There were so many problems with implementation."
However, Medicaid officials in other states don't seem to be holding their collective breath for all the TennCare research to be completed.
HHS has granted similar five-year waivers to 12 other states to implement managed-care systems for their Medicaid recipients. Nine of the 12 were granted after TennCare was implemented (See chart, p. 48). HHS also has granted 97 two-year waivers to 41 states and the District of Columbia to implement smaller-scale Medicaid restructuring programs.
And if officials in other states don't want to wait for the official HCFA Tenn-Care evaluation or the Duke-Vanderbilt study, they can get a free copy of the 54-page report that the GAO issued on TennCare last September.