If you view Kynect in a vacuum, it seems logical: Provide a competitive environment where insurers compete for new members by offering lower premiums and a wide array of benefits.
Many who are at or close to the poverty level and were not previously eligible are accepted into the Medicaid rolls.
In theory, health-care providers will now benefit because previously uninsured patients who otherwise could not pay the bills will now become paying patients.
Unfortunately, Kynect does not work in a vacuum. When you add other critical factors into the picture, the chances of being successful come into question.
The variables include the sheer numbers of poor and unhealthy Kentuckians, the disastrous implementation of Medicaid managed care in 2011, the fact that most rural areas are medically underserved, that many rural hospitals will take the brunt of caring for the lowest-paying members, and finally the litigious nature of practicing medicine.
First, the mere possession of health insurance doesn't automatically mean access to quality health care.
Most databases indicate that around 75 Kentucky counties have insufficient numbers of doctors to serve the populations.
Since there is a shortage of doctors there is competition for their services. It's not hard to figure out that most doctors are going to be inclined to accept the insurance with the most attractive reimbursement, which is not Medicaid.
According to statistics provided by the Kynect website, of the 413,410 Kentuckians who enrolled the first year, 330,615 qualified for Medicaid. The overall result is that many new patients served by Medicaid who are still without primary-care doctors.
Those patients will continue to seek care as they always have — in the local hospital's emergency department.
You might assume that hospitals would receive some reimbursement through Medicaid. Unfortunately, in most cases this is not the case. The companies who now manage Medicaid plans usually deny payment unless the patient has an actual emergency. Add to this that the providers in the emergency room are at great risk of liability. This encourages over-utilization of diagnostic resources to rule out adverse possibilities.
Hospitals are now confronted with thousands of new patients who are still low- or no-pay. Plus they still have to hire medical staff to meet the need.
Kynect has resulted in 17,000 new jobs, according to the state.
What is not mentioned is that much of this has actually been a shifting of resources; hospitals have to lay off other workers to accommodate new patient-care demands.
Patient insurance mix and the resulting reimbursement in rural hospitals differ substantially from hospitals in urban areas of the state.
Although the urban hospitals see their share of Medicaid patients, the numbers as a percentage of their patient base are substantially less. Further, the larger hospitals have substantially more sources of revenue.
In rural areas, most communities have only one hospital in the county that receives the full impact of new Medicaid patients. And despite claims to the contrary, Medicaid managed care has lessened reimbursement to many rural hospitals.
The disastrous implementation of Kentucky's Medicaid managed care in 2011 was a revenue shock to most hospitals. Managed-care companies were ill prepared to implement their plans in the short time frame required by the state.
As a result, there were failures to get doctors and medical facilities credentialed and loaded into claims-processing systems.
This resulted in reimbursement being denied. Many practices with high concentrations of Medicaid patients practically went out of business, especially in medical specialties such as OB/GYN.
Because Medicaid managed care organizations received unreliable information from the state, they were ill prepared for the system failures. Some passed their losses on to providers in the form of what seemed to be creative audits to deny or delay payments.
One company, Kentucky Spirit, departed the state in violation of its contract and never paid some providers what was owed.
The state, however, claimed substantial savings. What officials failed to mention was that the savings appeared to come at the expense of providers not being paid. Many providers sought help from the state for collection of nonpayment.
The response from the Department for Medicaid Services was that, "it was a contractual issue between the providers and MCOs and they would not intervene."
Kynect is to be congratulated for matching much of the state's uninsured population with health insurance; the health-care community's job is to treat all of the new patients entering the system.
The ultimate measure of success will be to pull Kentucky out of the bottom of health rankings in the United States.