Hospitals didn't get the curbs they were seeking on the companies that control Medicaid coverage for more than 500,000 Kentuckians.
They did finally get Gov. Steve Beshear's attention and his promise of an "aggressive, multi-pronged action plan" to address complaints of delayed and withheld payments.
Hospitals and other providers say the managed care companies are endangering the medical safety net by sitting on millions of tax dollars owed to health care providers.
Beshear, who said the hospitals are exaggerating, announced his plan while vetoing a bill that would have dealt with the complaints more aggressively but that the legislature enacted too late to override a veto.
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Beshear said the vetoed bill would have cut into the savings from privatizing Medicaid. The savings have already been shaved by a 7 percent rate increase bestowed on the companies by the state earlier this year.
The Kentucky Hospital Association had pushed for the vetoed legislation, but said it's encouraged by Beshear's plan, which, if successful, will be a "step in the right direction."
Beshear also made an impassioned defense of his administration's managed care Medicaid program, citing statistics that he says show it's already improving Kentuckians' health through better preventive care while saving money.
Medicaid, a federal-state program that provides health care to the poor, elderly and disabled, now enrolls one in five Kentuckians.
We hope Beshear is right and that his plan, which includes Department of Insurance audits and meetings between medical providers and managed care company officials, resolves the financial issues.
We also hope that Beshear doesn't really think Kentucky can solve its health crisis simply by outsourcing the problems (and a lot of the money that could fix them) to for-profit companies.
Improving Kentucky's abysmal health status will require leadership and innovation from elected officials, agency administrators and health care providers — especially if Medicaid is expanded to include more uninsured people as part of national health care reform.
The model Beshear touted last week as a "21st century health care system" is already being discarded by some states.
After 15 years with the kind of system Kentucky launched 18 months ago, Connecticut on Jan. 1 excluded for-profit insurance companies from its Medicaid program because, officials say, they failed to deliver lower costs or better care.
Kaiser Health News reports that Connecticut is now running its own Medicaid program with help from a non-profit administrator and plans to send some of the millions that had been flowing to insurance companies' bottom lines to primary care doctors to improve care.
Connecticut is an insurance industry center, so officials there must have been extremely confident about the advantages of ending privatization.
Kaiser also reports that Oklahoma officials have no regrets about ending privatized Medicaid in 2005. Since then Oklahoma has "achieved very encouraging marks in both member satisfaction and quality, (while) the cost per member has grown at a very low average annual rate of 1.2 percent over the last five years," said Mike Fogarty, the state's Medicaid director.
We're not defending Kentucky's previous status quo. But Kentucky has to get a lot better at learning from health care pioneers while tailoring solutions to our unique challenges.