Category Archives: Health care

Fixing Arkansas’ life-and-death department

Health care, State government

Cindy Gillespie By Steve Brawner
© 2016 by Steve Brawner Communications, Inc.

The quickest route to saving the state millions of dollars may be the $119,000 extra it’s spending on one of its new employees.

That’s how much more money new Department of Human Services Director Cindy Gillespie is earning than her predecessor. He was making $161,038. Gov. Asa Hutchinson, with the support of the Legislature, bumped her salary to $280,000.

This was done because DHS is an important agency, and Gillespie has an impressive resume. The department spends $8 billion of your money and employs 7,000 people. It serves 1.2 million Arkansans through a variety of programs, many of which provide expensive services literally dealing with life and death: Medicaid, which serves disabled people and senior citizens living in nursing homes; the private option, which provides health insurance to lower income Arkansans; and the state’s foster care system, which serves more than 4,900 children. Gillespie was one of Mitt Romney’s health care advisors when he was governor of Massachusetts and, before that, she helped Romney rescue the financially troubled Salt Lake City Winter Olympics held in 2002.

When Gillespie started leading DHS about three months ago, her first act was to determine how big a mess the department was. She found during a 60-day review that its 10 divisions operate independently. Because of that, in many areas the department has had no central vision, while the director hasn’t been able to manage things properly or even to easily find out what’s going on. Because 10 divisions are buying things, the department hasn’t coordinated purchases or taken advantage of its economies of scale to get better deals with vendors. Each division is in charge of its own technology, meaning the department has hundreds of systems, with most tech duties outsourced to vendors.

Gillespie told legislators this week that the department is canceling contracts worth $174 million over the next seven years. Some of those may serve legitimate needs, and DHS may return to those vendors. But a change has to occur because in many cases, the state has been renewing contracts year after year without really determining if they were still needed and if they were written to serve the state’s best interest.

The reason it hasn’t changed before? “The easy path is just to keep it going,” she said.

Moreover, Gillespie has taken over an agency where morale is not great. The department’s turnover rate is 22 percent, which means, at any given time, more than one in five positions is in the process of being filled or is being staffed by someone new. That’s especially bad because half of the department’s employees are directly involved in patient care. Because each division manages its own human resources, there’s no department-wide strategy for hiring people and advancing them along career pathways. Sometimes there are problems with the job duties, such as the foster care caseworker who spends 30 hours a month making copies instead of helping children. Pay is lower than it should be – though, let’s be honest, state employees have benefits such as retirement that few others enjoy these days.

So now Gillespie is trying to fix the problems. As of July 1, about four months after she started the job, DHS will be reorganized. Instead of the divisions each doing their own thing, seven shared offices will each handle a major responsibility for the entire department – one to hire, one to buy things, one to handle technology, etc. A new finance office has already committed to find $25 million in savings this first year. When it’s done, she expects DHS to hire fewer people but make them better at their jobs and pay them more.

When the state hired Gillespie, it invested a little money in someone who’s going to run government more efficiently, like a business. Some people are really good at doing really consequential things, and sometimes, you get what you pay for.

That reality doesn’t always make sense, like when the state’s highest paid employee is a college football coach who makes $4 million a year. But it is the world we live in, which is why someone who can reorganize the state’s life-and-death department in four months should make at least 7 percent of that amount.

Related: What exactly is the private option?

Health insurers want to raise prices. What now?

Health care, Legislature, Politics, U.S. Congress

By Steve Brawner
© 2016 by Steve Brawner Communications, Inc.

The big news in health care this week was that most of the state’s insurers are asking for rate increases for policies purchased individually or through the state’s Arkansas Works program.

The bigger issue – rising health care costs, and the political system’s inability to address them – is not new.

The two Blue Cross providers are asking for 14.7 percent increases, while QualChoice Life and Health and QCA Health Plan are asking for increases of just under 24 percent. The state’s fifth insurance company, Ambetter, is asking for less than 10 percent and is not required to publicly disclose or justify that amount. The sixth insurance company, UnitedHealthcare, unable to make a profit, is leaving the market.

The Arkansas Insurance Department still must approve the requests. Commissioner Allen Kerr sounded skeptical in a statement released by his office.

There are many reasons for the requested hikes. I’ll summarize those given by Arkansas Blue Cross spokesperson Max Greenwood. Patients are using more health care than expected. Costs are rising, particularly for prescription drugs and catastrophic claims of more than $50,000. The Affordable Care Act’s transitional reinsurance fee, which offset higher cost enrollees, is going away.

One other factor pertains to Arkansas Works, the program formerly known as the private option that uses federal funds to purchase private insurance for lower-income Arkansans. Remember last year when we learned many people living out of state, or not living at all, were being covered? When that was more or less fixed, Blue Cross lost a population of 25,000 members whose premiums were being paid but who didn’t use much health care, especially the dead ones. So now the insurer says it has to adjust.

Of course this all happens in the context of Obamacare. Sen. Tom Cotton, Rep. French Hill and Rep. Bruce Westerman released statements calling once again for the Affordable Care Act to be repealed and replaced with patient-centered reforms.

That’s easier to say than do. Since the Affordable Care Act was signed into law more than six years ago, congressional Republicans have voted dozens of times to repeal it. Replacing it? Not so much. True, Rep. Tom Price, R-Ga., a physician, has been offering alternative bills since 2009, and Donald Trump’s website lists a framework of reforms. But the party has never coalesced behind a detailed, specific plan and then spent political capital selling it to the American people. Instead, it’s mostly just voted to repeal Obamacare knowing that, ultimately, President Obama would veto the repeal anyway.

Health care is by far the most difficult issue facing policymakers. There are many reasons, including that it’s a service Americans believe should be unlimited and cheap, which is a high standard. We need health care like we need groceries, but with food, most of us want steak but will buy canned tuna if that’s all we can afford. With health care, we all want nothing less than steak, but at canned tuna prices.

Like any other service, someone has to pay for a health care provider’s costs, and there are only three imperfect ways to do that. One is the free market approach where the consumer pays, which offers more freedom but less security and doesn’t have a clean answer when the consumer can’t afford the care. Another way is for the government to pay, which offers more security, at least initially, but less freedom. In that case, the government is deciding how life and death resources are allocated. Then there’s the third approach: Someone else pays, typically an insurance company. That method tries to strike a balance between freedom and security but gives a lot of power to a private corporation and in recent history has not effectively controlled costs.

The American health care system was a convoluted concoction of those three payment methods before Obamacare, and it still is. Prices were rising before Obamacare, and they still are. Undoubtedly, more Americans have insurance now than they did, and that’s a positive that shouldn’t be ignored. But many still are uninsured, and the big problem – cost – has not nearly been solved.

Republicans at the national level would do well to follow the example set by Republicans in Arkansas, who have done most of the creating, amending, defending and opposing of the aforementioned private option/Arkansas Works.

We can debate whether Arkansas Works is a good idea. But at least it’s a new one, with specific details that are clearly communicated and fought for.

Related: The real goal of the private option: Changing U.S. health care

The real goal of the private option: Changing U.S. health care

Health care, Legislature, Politics, State government

CapitolBy Steve Brawner
© 2016 by Steve Brawner Communications, Inc.

Arkansas is the land of the Hogs. When it comes to health care reform, it’s also offered itself up as a guinea pig.

Here’s why. The American health care system was a mess long before President Obama was elected. Costs were skyrocketing, and people were denied insurance based on pre-existing conditions, or they lost their insurance if they got sick. It’s long been unjust and unsustainable.

Along came the Affordable Care Act, which created Obamacare. Among its provisions was expanding Medicaid coverage for Americans with incomes up to 138 percent of the federal poverty level. Medicaid is a federal-state partnership that serves the poor, the aged and the disabled.

When the Supreme Court said states could choose if they participated in that expansion, many Republican-led states said no. In 2013, a group of Arkansas Republican legislators along with Gov. Mike Beebe’s administration instead said, “We’ll take that money, but instead of expanding Medicaid, we’ll purchase private health insurance.” The Obama administration agreed, and thus was created the “private option.”

It’s been a huge controversy that split Republicans between those who support it and those who see it as an unsustainable expansion of Obamacare.

Why would some Republicans support it? For one, a quarter of a million Arkansans now have health insurance because of it. Taking it away would be a state-changing event – for them, of course, but also for hospitals who would have to provide a lot of free care, and for the state, which would lose a lot of federal government money.

However, there’s another reason some Republicans support the idea: They’re trying to reform the entire health care system – which, as noted previously, has been messed up a long time.

Many Republicans have long advocated a “premium assistance” model for certain needy populations – basically, giving them money for insurance instead of putting them on a government program. But as state Sen. David Sanders, R-Little Rock, explained, the idea hasn’t been tried. If they could demonstrate in Arkansas that the idea could work, then they could change the entire national health care system starting in Arkansas.

What have been the results? There are more people on the program than were anticipated, and it hasn’t been managed well by the Department of Human Services. Coverage has been bought with taxpayer dollars for people without Arkansas addresses or, in some cases, a pulse. But a lot of poor people are covered, hospitals are saving money on uncompensated care, and costs per beneficiary have been lower than expected. The addition of a quarter of a million poor people to the insurance market has attracted providers to Arkansas, increasing competition and the choices available to us all.

As the experiment has continued, new elements have been included. Supporters hope to help people transition into self-sufficiency rather than trapping them in a big government program.
Hutchinson’s Arkansas Works program, which is the private option with a new name and some new wrinkles, includes work training referrals and a $19 per month contribution from better-off beneficiaries. He’d like to do more, but the Obama administration won’t let him. But next year, there will be a new administration.

So Arkansas has offered itself up as sort of the guinea pig in this experiment to see if the premium assistance model works. Since then, a number of other states have followed Arkansas’ lead and tried their own experiments. During hearings this past year, Arkansas legislators heard about some of those results, which could lead to changes here. States are the laboratories of democracy, and laboratories work best when they share what they learn.

Lawmakers hope the changes Arkansas has demonstrated could have other far-reaching effects. Sanders thinks the premium assistance model could be used effectively with the Veterans Administration – which, goodness knows, needs help. Rep. Charlie Collins, R-Fayetteville, thinks that, long-term, the model would work even for the biggest government health care program, Medicare.

There are those who say none of this will fix the health care system. Opponents from the right say government messes everything up. Opponents on the left say health care should not be a profit-earning enterprise, so the United States should do as other Western countries have done and just put the government in charge of paying the bills.

Sanders said something on which everyone should agree: This is an ongoing process. Health care isn’t going to be reformed. It’s going to be reforming, always. It must be.

Related: The debt, the private option and the painter

The larger debate: How Arkansas works

Health care, Legislature, Politics, State government, Uncategorized

arkansasFlagBy Steve Brawner
© 2016 by Steve Brawner Communications, Inc.

This debate at the Capitol over health care is difficult to write about day to day because things change quickly. So let’s talk about what it might mean for the future.

First, the background. Legislators are debating the private option, which uses federal Medicaid dollars to purchase private health insurance for Arkansans with incomes up to 138 percent of the federal poverty level. It came about as a result of the Affordable Care Act, which created Obamacare. As of the end of January, 267,590 adults were eligible. It has helped Arkansas reduce its number of uninsured adults and gotten hospitals paid more often for their services – probably saving some of them, in fact.

However, some Republican legislators say it’s an unsustainable expansion of Obamacare leading to more government dependence and a bigger national debt. Gov. Asa Hutchinson is trying to make the program more agreeable to them by requiring more from recipients while changing the name to Arkansas Works. For many, it’s still not agreeable enough.

During the recent legislative session, Arkansas Works passed, but just short of the three-fourths majority needed for any kind of state spending. Arkansas Works is part of the larger Medicaid budget, which also funds nursing homes and other programs. So at least five members of the House and two in the Senate who voted against Arkansas Works must now vote to fund the entire Medicaid budget, including Arkansas Works.

This has been a huge debate. There’s been talk about how close to the cliff the state would get. The opponents haven’t wanted to fund Medicaid with Arkansas Works, and the supporters haven’t wanted to fund Medicaid without it.

The three-fourths requirement for funding is a high bar. It means that any nine senators can block anything.

So in the future, will they? If some nine senators don’t support the Common Core next year, will they threaten to withhold funding for public schools? What if nine senators want to spend more money on programs for poor people and threaten to withhold their votes for something else?

In fact, the Arkansas Constitution gives one-fourth of either House the ability to shut down the entire state government. It requires that, before anything else is funded, funding must be secured for general appropriations, which includes legislative reimbursements and such. So it’s possible for that one-fourth minority to refuse to fund general appropriations, and then nothing happens. In fact, as part of the political brinksmanship being played at the Capitol, House Democrats did just that while saying that Arkansas Works must be settled first.

Nine senators can exert their will over potentially the other 126 legislators. That’s a powerful weapon. But it’s perfectly legal and constitutional.

Is it the wave of the future? If so, it would require a complete change in the culture of the Capitol, which is a remarkably collegial place where legislators generally like each other, regardless of party. Arkansas Democrats and Arkansas Republicans, after all, are much more alike than Massachusetts Democrats and Alabama Republicans. In a body dominated by Republicans, the Senate chair of the powerful Joint Budget Committee is the universally popular Sen. Larry Teague, a Democrat from Nashville. That kind of thing wouldn’t happen in Congress. Moreover, legislators don’t want to be seen as obstructionist because they want to pass their own legislation.

Legally, nine senators can block anything, but culturally, they would pay a heavy price if they did. When cultures shift, the law remains. On the other hand, laws are always interpreted through the lens of culture.

Ultimately, Arkansas Works probably will be funded. On Tuesday, supporters pushed through the Joint Budget Committee an amendment that would end the program at the end of the year. The governor has said he will veto the amendment but not the bill, and the Legislature won’t be able to override. Voila! Arkansas Works passes without anyone having to convince two of those senators to go on the record voting for it.

Where will this lead? The Legislature is supposed to fund with a three-fourths majority, not a simple majority. It might get Arkansas Works funded, but it probably will draw a legal challenge.

Got all that? While the debate today is about Arkansas Works, the larger debate is about how Arkansas works.

Related: Arkansas Works and the private option: What’s all the fuss about?