In Our View: A Better Medicaid

Innovative states should be allowed to implement their own efficiencies

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With a rare unanimous backing by legislators of both parties, Gov. Chris Gregoire is seeking more flexibility in managing the state-federal health program for low-income people. The governor is in Washington, D.C., this week, and high on her to-do list is requesting a waiver from the federal Health and Human Services Department on administering Medicaid, an equal partnership of federal and state governments.

Engrossed Substitute Senate Bill 5596 drew not one negative vote in either chamber of the Legislature. It’s easy to see why. Among its provisions is requesting the waiver that would allow the state to save money without jeopardizing health care for low-income people. Gregoire and legislators believe this can be done by breaking free from the shackles of myriad federal mandates. The plan is complicated, but from a high altitude, it resembles welfare reform of the 1990s, basically a shift to block-grant programs that have allowed tremendous gains in efficiencies throughout the nation.

Certainly, the status quo of rising health care costs — especially in public programs for low-income people — is unacceptable. That’s the main reason we hope Gregoire gets an attentive ear from HHS Secretary Kathleen Sebelius when they meet this week. Adding to Gregoire’s clout is the fact that she’s representing more than just Washington state. “It’s my role as head of the National Governors Association,” she said after signing the bill. “So on behalf of the governors, I’m going to be presenting some agreed-upon ideas where we seek flexibility from health and human services in administering the Medicaid program.”

Rhode Island already is experimenting with a program based on a waiver. Proponents and detractors disagree over its effectiveness in the early going. But in our state, according to state Sen. Linda Parlette, R-Wenatchee, a waiver would “provide the state with a stable, sustainable Medicaid funding level and the opportunity for shared savings.” That could come in the form of flexibility around benefits, program designs, reimbursements, cost-sharing, choices for enrollees and streamlined eligibility. Among those joining Parlette in the sponsorship of the bill was Republican state Sen. Joe Zarelli of Ridgefield.

One of the most attractive features of a waiver is that it would reward innovation. In Washington state, one example mentioned in ESSB 5996 was described this way: “Innovative reimbursement methods such as bundled, global, and risk bearing payment arrangements that promote effective purchasing, efficient use of health services and support health homes, accountable care organizations, and other innovations intended to contain costs, improve health, and incent smart consumer decision making.”

That’s a convoluted version, but it’s a complicated subject that is not dismissed with bumper-sticker slogans. There won’t be any “Aha!” epiphanies as Americans struggle toward affordable health care. And it’s doubtful if the federal-state partnership is going away anytime soon.

But the cumbersome ways of the past must be replaced, especially as technology allows billing and eligibility processes to be expedited. If Sebelius and HHS officials will allow states to get creative, the states with the most advanced minds could help themselves. We like to think Washington qualifies as one of the states that are eager to move to the next, more efficient level of Medicaid. Success there could trigger triumphs in the rest of the health care system.