Jindal looks to privatize health care programs

Gov. Bobby Jindal has begun work on privatizing the last big chunk of health-care programs still being run by state government.

His aides are setting up the process of hiring private concerns to manage programs that care for the elderly and developmentally disabled. It’s the last major group of programs still directly under the $7 billion-plus state Medicaid program, which provides health insurance for roughly a quarter of Louisiana’s population.

Jindal’s administration has already transferred most of the state’s 1.4 million Medicaid recipients to six privately owned insurance companies. The administration also has moved people with behavioral health issues, such as mental distress and substance abuse, from state-run programs to care managed by a private company.

Those were transfers directly involving Medicaid. Another of Jindal’s privatization efforts was turning over the management of LSU public hospitals to private companies.

And now the Jindal administration is looking at the elderly and developmentally disabled. The state health agency recently outlined its plans in a “concept paper” that discussed the benefits that care coordination by private managers can give people needing “long term support and services,” a category of patients more commonly referred to as the elderly and disabled.

General objectives discussed in the concept paper are improving care through better coordination while serving more people at home with the dollars available. Another goal goes to the heart of an issue the state has wrestled with for decades: over-reliance on institutions for care of the elderly and developmentally disabled as the demand for community services skyrocketed.

Last fiscal year, the state spent nearly $2.4 billion in institutional or community settings caring for about 70,000 people considered elderly, developmentally disabled or disabled by adult-onset conditions, state Department of Health and Hospitals Secretary Kathy Kliebert said.

Developing a system for those groups is the most challenging privatization effort tackled because of the “complex population” involved, Kliebert said.

The state health agency formed an advisory group to help sort through the issues and design a “request for proposal,” which details what services the state is seeking and seeks offers for the delivery of those services.

Kliebert said the request for a proposal could be ready by early 2014. A series of public hearings also are planned.

“We are talking a good year before we start any type of implementation,” Kliebert said.

No decisions have been made on the scope of the privatization effort or whether it will be phased in one group or one geographic area at a time, Kliebert said.

“It’s about getting people more services, more home and community-based services for those waiting for those services, rather than budget savings,” Kliebert explained.

Advocates for the affected groups urge caution, saying the decisions will impact the lives of the sickest and most vulnerable consumers of healthcare.

“We have kind of accepted the fact that it is inevitable, that managed care is coming,” said Sandee Winchell, head of the state Developmental Disabilities Council. “The devil is in the details. It’s not that managed care is horrific. It’s how it’s impacting populations … It needs to be done correctly.”

“Managed care” is coordinated by private insurers, who can regulate the care given to ensure patients are getting proper services at the right time in the proper setting and to avoid duplication.

Managed care is being used around the country, but it’s new to the arena of long-term support and services, said Nancy McPherson, state director of the AARP, a organization advocating for retirees and the elderly.

“Even though some states have moved into it, there’s not a lot of experience or track record,” she said.

Thirteen states have federally approved managed “long term support and services” programs of some kind.

Louisiana Nursing Home Association executive director Joe Donchess said that early in the process, much will depend on how the plan is implemented, which populations will be included and when.

The advocacy community is mounting a strong push for inclusion of institutional care settings such as nursing homes.

“Some state (nursing home) groups I’m talking to find it’s not a big issue because their concerns were heard,” Donchess said. “Others are going through dramatic change.”

Winchell, McPherson and Donchess are on the advisory group that will help DHH.

Advocates are adamant that both institutional care, such as nursing homes and developmental centers, as well as “community care,” are included as programs are moved to private management. Community care is policy of treating and caring for people in their homes rather than in an institution.

“Otherwise, there’s tremendous incentive for high-need individuals to be pushed into institutions” when they are constitutionally guaranteed to live in the least restrictive environment, said Nell Hahn, an attorney with The Advocacy Center, which represents the elderly and disabled.

Including both gives managed-care organizations “an incentive to serve people in the community ... Home and community-based are more cost effective and we think offer a better quality of life, and we would have savings to serve more people on waiting lists,” Winchell said.

Kliebert said the advisory committee will help make that determination.

“We have the options out there,” she said.