"I do not want to continue to have to adjust our budget in the future because of the incredible increase in this, which then takes away money from our university system, or our K-through-12 or community college systems," McCrory said at a news conference. "That's what's basically happening in North Carolina government today."
The McCrory administration's concept is that three or four companies would be selected through an open bidding process. Each would set up networks of medical providers. They would be paid a set monthly amount for each Medicaid patient enrolled, with increases for those groups that have sicker patients and for inflation. Their contracts with the state would require them to focus on patient outcomes rather than paying for each test or procedure, Wos said.
The managed-care operators will be "responsible for the outcomes and for managing their own risk so the taxpayer will no longer be on the hook for all of the overruns," said Wos, a retired physician.
Managed-care companies would be required to operate statewide so they couldn't pick healthier communities and leave the rest, Wos said. They also have incentive to treat what ails a person as a whole and stop any cycle of illness and treatment.
The changes will require approval from the federal government and action by the state's General Assembly to meet a July 2015 target for the revamped Medicaid program. About 70 percent of the country's Medicaid enrollees are served through managed-care systems that pay providers a monthly rate, according to the U.S. Centers for Medicare & Medicaid Services.
"This is not going to be easy," McCrory admitted. "The old system does not work and it is not sustainable. There are people within these systems who are going to do everything they can to sabotage any reform because they may be comfortable with the way the system is working right now. But we're going to keep pushing for this."
The trade association for the state's physicians said it was worried that McCrory's proposal would attract corporations whose main goal was delivering shareholder profits.
"If the administration's idea of reform is bringing in out-of-state corporations so they can profit by limiting North Carolina patients' access to healthcare and cutting critical medical services to our state's most vulnerable citizens, that is not change we can support," North Carolina Medical Society CEO Robert Seligson said in a statement.
The physicians group and a spokesman for the North Carolina Hospital Association said they worried the system McCrory calls his "Partnership for a Healthy North Carolina" would overwhelm the state's home-grown, non-profit Community Care of North Carolina series of Medicaid managed care networks. CCNC saved the state nearly $1 billion between mid-2006 and mid-2010, according to an independent actuary's report in 2011.
At the same time Wos and state Medicaid Director Carol Steckel were wrapping up their news conference, U.S. Sen. Richard Burr, R-N.C., was praising CCNC as its leaders were presented an effectiveness award from Healthcare Leadership Council, which represents medical industry chief executives.
