THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, April 12, 1995 TAG: 9504120407
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY MARIE JOYCE, STAFF WRITER
LENGTH: Medium: 85 lines
Next year, insurance companies and poor people in Hampton Roads will test a plan to privatize Medicaid, the government health insurance program for the poor.
The idea has already taken hold in many other states. If it works here, it will mean that poor people will get better care and taxpayers will spend less for the program.
However, the way many poor people get treatment will need to be fundamentally changed.
Clients must work with a family doctor, learn to tend chronic health problems and quit going to the emergency room for minor problems.
Virginia already has moved to privatize on a smaller scale. Women and children in urban areas can chose a private health maintenance organization over the state-run Medicaid program; this summer, that option will become available to almost everyone living in Hampton Roads, Richmond and Northern Virginia.
But Hampton Roads will become the first place in Virginia where virtually all Medicaid recipients - about 100,000 people - will have to get their care from a private company. Suffolk is the only local jurisdiction that won't be included.
Under the new plan, the state will pay private companies a set amount for each Medicaid client enrolled, about 5 percent less than the $113 per month the state spends on each person now. To make money, the companies will have to provide care for less than that while meeting quality standards.
The four approved companies think they can do that the same way they've managed costs for the general population - by emphasizing prevention rather than crisis treatment.
``You're putting (companies) in a situation where there's financial incentive to keep clients well,'' said Tom McGraw, who directs the managed care program for the state Department of Medical Assistance Services.
Managing care means making sure each person has a doctor. Medicaid clients sometimes have trouble finding one because of the program's low reimbursement.
Sentara Family Care will pay doctors more than Medicaid does, and 130 primary-care doctors have signed on, said Kathi Saunders, Sentara's product manager.
The key, say McGraw and Saunders, is to keep people out of the emergency room as much as possible. The emergency room is an expensive option that often serves as primary care for the poor. A poor person may go there because an untreated illness turned serious. Or he may be seeking help for minor problems because he doesn't have a regular doctor or doesn't know what is a real emergency.
``We know it's going to be difficult, but . . . we find the majority of clients we talked to want to break that pattern themselves,'' said Sylvia Carr, marketing manager for the Sentara program.
Debra Flemming is keeping her fingers crossed. A mother of two who lives in Coleman Place in Norfolk, she has already signed up her family for Sentara's program. After one of her children bumped his head, she consulted with nurses at Sentara's hot line for clients. ``They're right there for you, and they're very friendly,'' she says.
But, she cautions, she hasn't tested the program over the long haul and hasn't had to deal with any serious injuries or illness.
In devising the test program, Virginia has looked to other states that offer Medicaid managed care. Many, like Oregon, have won praise for their programs.
But some haven't done so well. Tennessee's TennCare program, launched in 1993, was accused of fraud and gross underpayment of doctors in its first full year. The governor shifted management of the program to a different agency. McGraw said Virginia is trying to avoid those mistakes.
The local companies competing for Medicaid clients are Sentara Family Care, owned by Sentara Health System; Priority Health Care, owned by the parent company of Virginia Beach General and Portsmouth General hospitals; and Peninsula Health Care, owned by Riverside Health System and Trigon Blue Cross Blue Shield. Maryland-based Optimum Choice also is enrolling Hampton Roads clients. ILLUSTRATION: Staff graphic
How the new plan works
For copy of graphic, see microfilm
KEYWORDS: MEDICAID HMO VIRGINIA HAMPTON ROADS MEDICAL INSURANCE
HEALTH INSURANCE INDIGENT by CNB