Multiple Medicaid directives have agencies "three times as busy"

While South Carolina's governor has given a directive to find ways to spend money more productively in Medicaid, says Tony Keck, the state's Medicaid director, she has also given the directive to present credible alternatives to allow the state to opt out of federal health care reform.

"So while we are reforming Medicaid and looking for ways to drive costs out of the system, we are also presenting alternatives to opt out of health care reform because we think we have a better way of doing it," says Mr. Keck. "It's got us three times as busy."

Since there is no way to know at this juncture if those alternatives will be accepted, or whether health care reform will ultimately be ruled unconstitutional or be repealed in Congress, says Mr. Keck, the directive is to prepare just in case all or part of it gets implemented.

"It is prudent, because nobody knows what is happening," he says. "There is so much uncertainty. Every state is in the position of having to do all these things at once, and we don't know what's going to happen."

As a result, says Mr. Keck, agency staff are being diverted from other tasks. "We are certainly having to divert resources from things that we used to do," he says. "In some cases, we are taking advantage of outside dollars." South Carolina Medicaid recently received a Work Strategies grant from the Ford Foundation of several hundred thousand dollars, he notes, to improve its eligibility and enrollment process.

States' needs differ

"While states are in their biggest budget crunch ever, to have to do all of this on top of it is pretty tough," says Mr. Keck. "It's definitely putting a strain on us, and every other Medicaid program I've talked to is feeling the same pressure."

The agency's management staff are being reorganized to improve productivity, adds Mr. Keck. "We found out our manager-to-staff ratio is about one to four, and we're working on making it closer to one to eight," he says. "By freeing up some of those folks, we can redirect them to more productive purposes."

Mr. Keck says that one of his biggest concerns is that "everything we do over the next several years will simply become a reaction to what the federal government is telling us to do. There is a danger of us constantly responding to what the feds are throwing at us, instead of working on things that we should be spending time on."

South Carolina's needs differ from other states, he adds, with different issues that affect the health and well-being of its citizens.

The state's needs are much more related to endemic poverty and lack of jobs and education, according to Mr. Keck, compared to a state such as Massachusetts, which has a high level of education and a small percentage of poverty. "It's not all related to how can we simply get more health services, but how do we make investments in K-12 and higher education and bring more businesses to the state, so people can get better jobs," he says.

A good example, says Mr. Keck, is the Health Insurance Exchange planning grants, which he says were set up to answer the question, "Should we implement a state or federal health exchange? But sometimes the biggest danger is asking the wrong question," he says. "As we started to talk about this, we realized that what we really were trying to achieve is better outcomes in the private health insurance market."

The state launched its planning effort to ask that broader question that goes to the root of the problem, says Mr. Keck, instead of presupposing that the state should implement exchanges.

Employers dropping coverage

While revenue is now ticking up, Mr. Keck says South Carolina's Medicaid program, which currently covers 800,000 individuals, is still seeing increases in enrollment that are lagging behind the improving economy, with low-income families as the fastest-growing category. The budget for Fiscal Year 2012 projects about 39,000 people will be added to the Medicaid rolls, says Mr. Keck, an increase of 4.7%.

Mr. Keck adds that he is very concerned about reports from the state's actuaries indicating that about 145,000 individuals will drop their private health insurance and go onto Medicaid as of 2014. "That makes absolutely no sense," he says. "One of the fallacies out there is that poor people don't care about their own health care, but employers are dropping coverage."

Mr. Keck says that he expects to see more than 500,000 new enrollees coming onto the program in 2014. "In poor states like South Carolina, that is a huge burden," he says. "While the first two years are paid completely by the federal government, we've got to think more than two years out."