The idea of managed care is to surround patients with providers, including social workers, nurses and doctors, who closely monitor and coordinate their care with an eye toward lowering medical costs. Patients with routine ailments who use the ER instead of a doctor's office are flagged. So are those who don't take their prescriptions on time.
Norwood is sympathetic to how quickly insurers were flooded with patients after a 2011 state law required 50% of Medicaid recipients to be in managed care. The migration was fast. In 2014, just 8% of Medicaid recipients were in managed care. Today, it's 65%, and Rauner wants it closer to 80%.
"I think they work hard to try to be responsive in an environment that has (seen) a very rapid growth with a lot of change," Norwood says of the 12 insurers.
In a 2015 state report card that measured the quality of nearly all the managed care companies, most received average to high marks on such indicators as vaccinating children and preventive visits. But among the two benchmarks for behavioral health—addiction treatment and continued care for the mentally ill—a third received below-average grades.
Norwood and Rauner want better results. And doctors and hospitals want less of an administrative headache from dealing with so many insurers. On Feb. 24, the state Medicaid program confirmed it will competitively bid managed care contracts to begin Jan. 1. There will surely be winners and losers, since the state is awarding only up to seven contracts valued at a collective $15 billion.
Dr. John Jay Shannon, CEO of the Cook County Health & Hospitals System, is concerned. His CountyCare managed care program includes inmates at Cook County Jail, which has been called possibly the largest mental health hospital in America. "These are perhaps the most challenging populations," Shannon says, because patients don't change their attitudes toward healthcare overnight. "The idea that those things are going to turn on a dime is naive."
He plans to bid on a new managed care contract. So does Detroit-based Meridian. Chicago-based Blue Cross & Blue Shield, which has one of the largest managed care enrollments, is evaluating the bid proposal, a spokeswoman says.
Meanwhile, Norwood has been studying other states. Arizona has been in managed care since its Medicaid program started 35 years ago. Insurers are "highly motivated" to meet quality measures and come into compliance if they don't, says Beth Kohler, deputy director of Arizona's Medicaid program. After all, if an insurer loses a contract in Arizona, other state Medicaid programs learn about it, she says.
While states are increasingly moving toward managed care, experts caution that privatization doesn't always net big savings. Illinois has hired a firm to crunch the numbers to see how much, if any, it has saved so far, Norwood says.
A revamp could also cause a potential dust-up. Ohio attracted a few lawsuits (now settled) when rebidding its managed care contracts to nix insurers.
"Big savings. Painful lessons. In Medicaid revamp, Rauner tries to learn from other states" originally appeared in Crain's Chicago Business.