The Coordinated Care Network Cut Fracas

This might be a trip into the weeds to an extent, and if so we apologize. But one piece of the feud going on between Gov. Jindal’s office and the conservatives in the Louisiana House of Representatives involves a cut Speaker Jim Tucker instituted to a program Jindal had put in place in which Medicaid recipients would be moved into private health-care plans.

Those plans, called Coordinated Care Networks, are supposed to save the state a big pile of money over time. And that’s important for Louisiana, which has an abnormally high number of people enrolled in Medicaid.

The Washington Examiner’s Ben Domanech makes a good argument in favor of Jindal’s position that Tucker’s meat-cleaver approach doesn’t work over the long haul…

Tucker has been pushing to kill Louisiana Governor Bobby Jindal’s plan for Coordinated Care Networks, which would move 800,000 Medicaid recipients into private managed-care networks next year—exempting the elderly and the developmentally disabled. But while blocking this reform of the system, Tucker has also endorsed a significant chop in the overall Medicaid budget of $81 million—$59 million of which will have to come out of reductions in provider rates and cutbacks in services.

This seems an irresponsible move at best. Instead of pursuing a fundamental reform of the unsustainable Medicaid system—which accounts for roughly $6.6 billion of Louisiana’s current annual budget—to allow for greater predictability in costs for the state and for a single doctor to make decisions with patients, Tucker is endorsing a chop-off-the-top cut. Perhaps this plays better as a short term political posture, but it does nothing to solve the long-term problems within the system. As anyone who’s learned from political experience in the past knows, this is a profoundly inefficient way to do things—as Secretary of Defense Robert Gates said last week, referring to cutbacks on national defense expenditures, “Salami-slicing is a way to avoid hard choices on what to fund.”

Jindal’s people are making a full-on push to fight Tucker’s cuts – they’re also hard after the $82 million the House stripped out of the state’s economic development Megafund, though we’ve already come out on Tucker’s side on that issue.

But on the Coordinated Care Network idea, it does look like Jindal is probably right. Over the long haul, Louisiana has to come up with a different Medicaid model if we’re ever going to get a handle on spending – and if we don’t, there will be hell to pay.

Tucker’s answer is essentially that this year, Louisiana doesn’t have the money to start the transition. And since the program hasn’t started yet it’s the easiest place to cut – or at least, it’s the least painful place to cut.

And that’s a worthwhile point, too.

It’s really a chicken-and-egg question: the state budget needs to be slashed, but over the long haul Louisiana needs to make some transformational decisions in order to prevent a constant scramble to balance the finances.

The fact that the legislators are angry at the Governor on a host of issues doesn’t help.

The bet here is that Jindal will end up winning the fight on Coordinated Care Networks now that the Senate has started work on the budget. But it won’t be easy, and to secure the funding for the switchover Jindal will have to give on something else his administration won’t like.