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Saving money in NC Medicaid program without hurting patients or enriching NC Blue Cross

This week Secretary Lanier Cansler of NC’s Department of Health and Human Services laid out the sobering facts on health costs in NC’s Medicaid health coverage program to a legislative committee. NC is $250 million over budget in Medicaid and those numbers are rising. Rumors are flying that to make up this difference NC might simply turn over its Medicaid program to NC Blue Cross or another private insurer. This is no doubt because private health insurers are doing such a good job controlling health costs. Cansler also said Medicaid might have to eliminate “optional” services like transplants, hospice or respiratory therapy for children.

Luckily, there are alternatives. Instead of enriching Blue Cross further or stopping heart transplants, we could save lots of money by stopping to pay for care we know is ineffective. Here are just three examples:

1. Stop paying for surgery to attempt to correct general lower back pain. Evidence that surgery is at all effective is extremely limited. UNC’s Dr. Nortin Hadler has just devoted an entire book to this subject.

2. Join the other 44 states in the union in implementing a mandatory preferred drug list to save $40 million in Medicaid spending instead of “voluntary” and quickly-changing drug industry-inspired alternatives. This option was unfortunately rejected by the NC General Assembly last year. Save even more money by adopting the same list for NC’s State Health Plan, Workers Comp, and any other program where the state purchases drugs. Follow the lead of states like Washington where a respected committee of physicians and other professionals works with regional academic centers and others (like Consumer Reports magazine at www.crbestbuydrugs.org) to create a list of the most effective drugs.

3. Don’t pay for Tamiflu, the expensive new drug that is supposed to help with the flu. There is simply no evidence that it reduces complications from flu in high-risk groups. The only benefit seems to be it may reduce the time healthy people have flu symptoms by about a day or so. This isn’t enough benefit to justify the expense or the widespread use of an expensive new drug that can cost $43 to $130 a dose.

16 Comments

  1. James

    January 28, 2010 at 8:31 pm

    Good stuff. Is there a list of fifty other examples we should be spreading the word about?

  2. Adam Searing

    January 29, 2010 at 8:54 am

    Depends how controversial you want to get! Dr. Hadler’s take on the evidence is that heart bypass operations and stenting are completely ineffective. We are working on it but the book “Overtreated” by Shannon Brownlee from a couple of years ago also has some other great suggestions.

  3. pino

    January 29, 2010 at 10:29 am

    This is no doubt because private health insurers are doing such a good job controlling health costs.

    You do understand that the price of insurance can not be less than the cost of care? Or, for that matter, the difference between price and cost?

    stopping to pay for care we know is ineffective.

    This is the type of reform that we should be looking at. How do we make medical care less expensive. Rather than trying to spread around costs to people in some huge ugly “socialized medicine” scheme, we can just reduce the cost to the point that is affordable.

  4. Adam Searing

    January 29, 2010 at 10:43 am

    I’d say that when nonprofit Blue Cross pays its CEO more than four times what the head of nonprofit UNC health system makes, that’s not containing costs.

    And yes, we’ve been talking about curtailing ineffective care for years here as the best way to contain costs – the Senate reform bill contains multiple mechanisms to do exactly that

  5. Kimberly

    January 29, 2010 at 11:09 am

    How are transplants, hospice care, and respiratory therapy “optional” services? So should we tell our Cystic Fibrosis patients that breathing is “optional”? Or that getting a new set of lungs because the disease has destroyed theirs is “optional”? I can’t tell you how frusterated we, as parents of 3 children with Cystic Fibrosis, get when we hear that the state may cut even more critically needed services. When the Children with Special Health Care Needs program, the critically needed program that paid for specialty vitamins, inhallation saline, and nutritional supplements, was defunded then we were told that Medicaid was going to cover the cost of the items that that program had covered. Unfortunately, the specialty vitamins were only covered for a very short time and are now not covered at all. And we have been warned by the company that supplies our nutritional supplements that they have been told those may not be covered for much longer either. I believe that if a doctor orders any procedure, medication, treatment, therapy, vitamin, or nutritional supplement then it should be covered. I am sick of beaurocrats making critical medical decisions for patients and putting funding for health care coverage after funding for what I term as nonconsequential items such as museums, etc.

  6. AdamL

    January 29, 2010 at 11:23 am

    The feds designate certain Medicaid services “optional” for states. NC pays for most of the optional services b/c, as you point out, they aren’t really optional.

  7. Kimberly

    January 29, 2010 at 11:37 am

    I fully understand the Federal and State match and requirements. I guess that is what gets me so frustrated with the state, they readily fund projects that do not involve the health and well being of children but are more than willing to even consider cutting critical programs that directly impact the health and well being and ability of certain populations such as Cystic Fibrosis patients to even live. Health care should always be 1st in funding because an unhealthy population impacts every aspect of our economy. Sick kids can’t go to school, parents have to stay home from work to care for them, parents have to spend money on health care items instead of other items that increase state revenue even more, parents can lose their employment because sick kids have to have them home too much, and I could go on and on.

  8. gregflynn

    January 29, 2010 at 12:13 pm

    The price of private health insurance is not directly related to the cost of care. Profits, recission, non-care spending, caps, denial protocols, and, in particular, profits or losses from insurance company investments and derivatives all figure into the price. In a good economy premiums don’t necessarily cover the cost. In a bad economy premiums can rise to cover much more than the cost of care including investment losses.

    (Sorry for the duplicate post in another thread)

  9. pino

    January 29, 2010 at 1:48 pm

    I’d say that when nonprofit Blue Cross pays its CEO more than four times what the head of nonprofit UNC health system makes

    Depends. Is the CEO of Blue Cross 5 time more effective at running a business?

  10. Adam Searing

    January 29, 2010 at 3:42 pm

    UNC has about the same number of employees and is a much more complicated operation where life and death decisions are made every day.

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  15. healthcare web » Medicaid of NC

    October 30, 2010 at 1:48 pm

    [...] 8.The Progressive Pulse – Saving money in NC Medicaid program Rumors are flying that to make up this difference NC might simply turn over its Medicaid program to NC Blue Cross or another private insurer. This is no doubt because private health insurers are doing such a good job controlling health costs. http://pulse.ncpolicywatch.org/2010/01/28/saving-money-in-nc-medicaid-program-without-hurting-patients-or-enriching-nc-blue-cross/ [...]

  16. healthcare web » NC Medicaid

    October 30, 2010 at 2:15 pm

    [...] 8.The Progressive Pulse – Saving money in NC Medicaid program Rumors are flying that to make up this difference NC might simply turn over its Medicaid program to NC Blue Cross or another private insurer. This is no doubt because private health insurers are doing such a good job controlling health costs. http://pulse.ncpolicywatch.org/2010/01/28/saving-money-in-nc-medicaid-program-without-hurting-patients-or-enriching-nc-blue-cross/ [...]