One year is too short to transition to new Medicaid system

Chicago Jewish Federation agencies received some $200 million in Medicaid reimbursements in fiscal year 2011. At CJE SeniorLife Lieberman Center for Health and Rehabilitation, 62% of the patients are covered by Medicaid.

Currently, the Illinois General Assembly and Gov. Pat Quinn are deciding on a Medicaid reform package and hope to reach a final decision by May 31. The $2.7 billion reduction (18% of the state's Medicaid budget)  included in Gov. Quinn's Medicaid reform proposal will mean a cut of $600,000 a year in funding for Lieberman, leading to diminished services, staff layoffs, and a decrease in Medicaid certified beds.

Thousands of Chicago-area Jews are among the 2.7 million Illinois residents who depend on Medicaid, the government funded health insurance program for low-income families, individuals with disabilities, and nursing home residents without private insurance. Also affected will be the many people employed in hospitals, nursing homes, and other places which rely on Medicaid payments.

This desperate Medicaid funding proposal stems from our state's desperate fiscal condition. Illinois has billions in unpaid bills. There is simply not enough money to pay fiscal year 2012 bills, which ends June 30. By June, the state will owe $1.9 billion in unpaid Medicaid bills for services delivered months ago, a figure projected to balloon to $21 billion in five years. With another state tax unlikely, cuts, painful ones, are inevitable. The challenge is to reduce spending without creating a disaster on both the fiscal and human services fronts. The plan must be built around transitioning towards a future where the vulnerable are protected and improved health care delivery systems save dollars.  Implementing these changes may take two rather than one year to phase in but efforts to do this are already in process.

One place to start is to give Director of Healthcare and Family Services Julie Hamos' new initiatives focused on moving the Medicaid clients into risk-based, coordinated care program statewide need time to work. These projects, which build on managed care concepts, are just in the process of being implemented. By the end of the first year of full implementation, there should be data pointing to which projects actually work and why and which should be abandoned.

The state, with its non-profit provider partners, should analyze where turning the spigot off abruptly will cause costly leaks in other parts of the system and adjust accordingly to build up less expensive options. Health care is not a luxury item. People need to go somewhere when they become ill and that somewhere usually costs money. In Arizona, the state which has made the deepest Medicaid cuts, they eliminated Adult Dental only to reinstate it months later because of the spike in ER room visits due to complications from untreated dental problems. We need to learn from the work of other states to see what merits mimicking and what should be ignored.

A core principle must be to protect safety net hospitals like Mount Sinai Hospital which provide most of the care to the poor and the uninsured. These hospitals will be devastated by draconian reductions in their reimbursed Medicaid rates. This may force them to close essential- but costly and underfunded- programs like the trauma centers, shifting Medicaid help far from the communities where people need it most.

Involve innovative health and human service providers in the earliest stages of program re-design. Jewish Federation affiliated agencies like Sinai Health System and CJE SeniorLife are driving systems change through new evidence-based models of care. They have excellent ideas to not only improve care for their clients but also save government expenditures on Medicare and Medicaid.

Finally, protect community-based human services so that the so-called "rebalancing initiative," can succeed. This initiative shifts people from institutions back into the community or, better yet, avoids institutionalizing people who could live safely in a community setting in the first place. Not only is this cost-effective but, more importantly, it is what people actually, strongly, prefer.

These are tough times. We appreciate that Gov. Quinn and Director Hamos are taking very seriously this opportunity to reform the Medicaid system and place it, for the long term, on a stable financial foundation. We are eager to continue partnering with them in making it happen, even if the timeline ends up being two years rather than one in order to fulfill our fiscal and human service obligations.

Connect with us

Sign up for our weekly newsletter featuring issues and events in the Jewish world.