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Tough to treat medical needs equally

ATLANTA -- Figures released Thursday show Georgia taxpayers saved between $123 million and $140 million in the last fiscal year because of the state's own health-care reform of sorts.

The federal share of savings is even greater.

For 1 million low-income Georgians covered by the state's Medicaid and PeachCare for Kids insurance plans, the Perdue administration began nudging them toward a concept it called care-management organizations. Three private companies bid for the business, which requires them to provide a more intense level of interaction with patients.

The goal is for case managers to teach and cajole patients into healthier habits. When they are sick or due for a checkup, they're encouraged to see their primary physician instead of heading to the emergency room.

Staff at the Department of Community Health, which oversees the CMOs, calculated the savings by projecting two scenarios. In one, it assumed the old, fee-for-service insurance plan that the CMOs replaced had merely kept up with inflation. In the other, it assumed that doctors and hospitals got some boosts in what they were paid, comparable to the modest increases they've received under the CMO program.

Savings under both scenarios were lowered by including the removal of duplicates and unqualified people in the program after the CMO switch. That didn't change the per-person savings but reduced the number of people it was applied to.

Projected into the future, the two scenarios could save state taxpayers between $135 million and a whopping $580 million in fiscal year 2012.

Gov. Sonny Perdue's spokesman Bert Brantley said the CMO approach, by slowing the growth of expenses, improved the entire state budget.

"We would be in much worse fiscal shape right now if we hadn't slowed that growth curve," Brantley said.

Community Health monitors the performance of the CMOs from two-dozen points, from availability of nearby physicians to how many rings it takes before phone calls are answered. A comprehensive audit of their performance is in the works, too.

Doctors and hospital administrators frequently complain that the savings is coming out of their pockets. One way is through the reimbursement rates, pennies for every dollar of charges billed.

Brantley notes that Perdue had a plan to boost reimbursement rates that the providers rejected. It involved taxing them and every health insurance company in the state.

The idea was an expansion of a program the state set up with the CMOs at the start of the program in 2006.

Then, the state paid a bonus to the CMOs who paid part of it back to the state as a tax. Since most of the money in the Medicaid and PeachCare programs comes from the federal government, the CMOs' tax to the state was mostly Washington's.

In the expansion, the CMOs would have passed part of their bonus along to the providers who would also pay a tax back to the state with mostly federal dollars.

The feds eventually grew wise to the scheme that Georgia and other states were using for the bonuses and toughened the rules, which made them politically unpalatable. So, Perdue's proposal failed last year in the General Assembly after heavy lobbying by the medical community.

"You should ask those same providers that are complaining why they opposed a plan that would have raised reimbursement rates and particularly helped those providers that are struggling to care for our Medicaid population," Brantley said.

Hospitals also squawk at the frequency with which Medicaid and PeachCare patients go to emergency rooms for nonemergencies. Emergency rooms are expensive to operate with their advanced equipment and highly trained personnel, but the CMOs only pay for nonemergency visits as if they were handled in a clinic or doctor's office.

Community Health staffers say the CMO case managers have prodded more patients away from ERs and toward cheaper treatments. But Brantley admits there is room for improvement.

"It's important to note that all the CMOs can do is encourage patients to seek care from a physician first," he said. "These are people making individual, personal decisions and they generally do not check with their CMO first before going to the ER."

For most people, the convoluted world of medical economics makes their heads hurt, and they avoid the issue. The debate over national health care shows how important it is, though.

Georgia's experience illustrates that savings are hard to get and not universally popular.

(Walter Jones is the bureau chief for Morris News in Atlanta and has been covering Georgia politics since 1998. He can be reached at or (404) 589-8424.)

Web posted on Thursday, November 19, 2009

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