Dr. Wos' miracle Medicaid cure

by Ned Barnett, News and Observer, November 1, 2014.

Dr. Aldona Wos, secretary of the state Department of Health and Human Services, no doubt saw some impressive recoveries when she was a practicing physician, but none can compare with the miracle cure she has overseen as a government official. She’s fixed Medicaid.

In January of 2013, Wos, Republican Gov. Pat McCrory and State Auditor Beth Wood, a Democrat, held a news conference at which they somberly announced that North Carolina’s Medicaid program was “broken”. They cited chronic cost overruns and sky-high administrative costs. Therefore, they said, Medicaid could not withstand the stress of being expanded under the Affordable Care Act. Thus, several hundred thousand low-income North Carolinians would have to remain without health insurance despite the federal government’s offer to pay total cost of expansion through 2016 and 90 percent thereafter.

It was an interesting bit of political jujitsu on McCrory’s part, a flip he couldn’t have pulled off without the assist from Wood. He wasn’t being a heartless Republican denying the health insurance that Uncle Sam wanted to give to North Carolina’s working poor. No, he really wanted to help, but his responsibility as the steward of the state’s resources barred him from expanding a broken program. The implication, of course, was: Don’t blame me. Blame the irresponsible Democrats of previous administrations who let Medicaid get into such a condition.

The justification was nonsense. Republicans in the General Assembly were adamantly opposed to the Affordable Care Act and determined to block it wherever they could. They refused to set up a state exchange and they slammed the door on a Medicaid expansion that could have provided health insurance to what the Urban Institute estimates would be 478,000 North Carolinians. McCrory found a way to go along with his fellow Republicans’ opposition to Medicaid expansion without seeming to be mean about it.

Yet last week, just days before the election, the governor said he’s now considering expanding Medicaid. That glimmer of moderation may help state House Speaker Thom Tillis in his U.S. Senate race and Republican state legislators who find themselves in surprisingly tight races for re-election despite the GOP’s Herculean efforts at gerrymandering. It also may mark McCrory’s first tilt toward 2016 when he will go before voters with a lot of explaining to do about the moderate former Charlotte mayor they thought they elected and the tea party-type executive they got.

It’s good news that the governor is now open to doing the right thing about Medicaid expansion. Even Tillis now says he might favor it. Refusing to do it could cost the state $51 billion in lost federal money over the next decade, according to a report from the Robert Wood Johnson Foundation.

But this change of position shouldn’t pass without a look at the rationale for not doing it in the first place. Wos’ reign at DHHS has been marked by massive provider payment problems, an exodus of staff, plummeting morale and expensive consultants hired to fill in the gaps. Now she’s saying that the administration of Medicaid has been fixed and it’s ready to take on a half-million new recipients.

“We have unfolded massive changes inside of the state under our leadership that have faced us forward,” she said last week on WUNC’s The State of Things.

If that turnaround is true, Wos has accomplished an amazing feat of introducing efficiency and accountability. Yet there’s nothing to suggest that is the case. DHHS under Wos remains an agency riddled by vacancies and burdened by a reputation for administrative dysfunction that has discouraged top applicants. But the Medicaid program itself was never “broken”. It has operated in North Carolina for decades and in recent years has successfully held down administrative costs compared with the national average. Medicaid’s “out-of-control costs,” which Republican legislators say busted the state budget, reflect wishful budgeting. Simply putting a number in the budget won’t hold down costs. People need treatment, and when there’s a recession Medicaid rolls grow. With the economy now improving, Medicaid costs are coming in under budget.

Jonathan B. Oberlander, a professor and vice chair of Social Medicine and Health Policy & Management at the University of North Carolina at Chapel Hill, was skeptical of the stated reasons behind North Carolina’s balking at Medicaid expansion. But he’s encouraged that the resistance may be giving way.

“I welcome the McCrory administration’s rethinking its opposition to Medicaid expansion,” Oberlander said. “I am not sure, though, that North Carolina Medicaid was ever broken. There are significant problems in Medicaid administration, to be sure, and there are cost pressures, as there are in every state. But what was really broken was not Medicaid itself but the state’s commitment to help low-income North Carolinians. I hope we are about to renew that commitment, and if saying that Medicaid is fixed gets us to that point, then so be it.”

http://www.newsobserver.com/2014/11/01/4283970/dr-wos-miracle-medicaid-cure.html?sp=/99/108/