In the early 1990’s, faced with health care costs that were rising at unmanageable rates and widespread dissatisfaction with the quality of the state’s Medicaid program, the Oklahoma Legislature created the Oklahoma Health Care Authority (OHCA) as a stand-alone agency whose primary mission would be to convert the state’s fee-for-service Medicaid program into a primarily managed care program. To implement managed care, the state submitted a Section 1115 demonstration waiver for the program, which would come to be known as SoonerCare. Earlier this year, Mathematica Research, a nationally-recognized evaluation company, delivered a comprehensive 1115 waiver evaluation on the SoonerCare program since its inception. You can access an Executive Summary of the findings, a PowerPoint, or the 175+-page full report.
SoonerCare has undergone many changes over its history. Perhaps most significantly, the program’s initial experiment of serving Medicaid recipients in the urban catchment areas of Oklahoma City, Tulsa, and Lawton through fully-capitated HMOs was abandoned at the end of 2003 after the program was unable to retain an adequate number of managed care organizations. Since then, all SoonerCare clients statewide have been served through a partially-capitated primary care physician (PCP) model, with OHCA itself assuming many of the case management and coordination functions previously contracted out to the HMOs (Medicare dual eligibles, foster care children, and other select populations remain in the traditional fee-for-service program).
The report is valuable reading for anyone looking to understand the recent history of the state’s Medicaid program. While identifying ongoing problems, Mathematica unambiguously asserts that “SoonerCare has contributed to improvements in access to care for low-income Oklahomans”. The program is applauded for improving coverage for children (although the Legislature played a key role in expanding coverage to 185 percent of the poverty level in 1997, along with subsequent expansions), restraining costs, growing the Medicaid provider network, and delivering customer satisfaction. OHCA itself is applauded for developing a culture of innovation and strategic planning, emphasizing performance monitoring and reporting, and displaying a commitment to public reporting and accountability (through such mechanisms as its monthly Fast Facts). The evaluators are more critical of OHCA’s success in collaborating with other public agencies and communicating with the Legislature.
Perhaps the most interesting finding of the evaluation (p. 16 of the Executive Summary) concerns what happened when OHCA assumed responsibility for managing the care of SoonerCare recipients who had previously been enrolled in commercial HMOs. The state, it turned out, was able to provide care at less cost with no decline in quality of care:
With sufficient resources and leadership commitment, state Medicaid agencies can manage care at lower costs than MCOs and with similar outcomes. Annual per-member costs in Oklahoma have been significantly below the national average for every year between 1996 and 2005, and in most cases below the average of states operating MCOs. Given the cost trajectory of Oklahoma’s MCO contracts, and the limited competition that existed between companies at the time that the Plus [fully-capitated managed care] program was terminated, it seems likely that SoonerCare would have been more costly to operate during the past four years had those contracts been maintained. Evidence from this evaluation suggests that provider participation and member outcomes have not been adversely affected as a result of the statewide expansion of SoonerCare Choice and termination of the MCO contracts, though we did find some evidence that preventable hospitalizations for diabetes and asthma may have increased. In states such as Oklahoma, where managed care penetration is low and turnover among MCOs is relatively high, MCOs’ key advantage — utilizing resources more flexibly – may have limited effectiveness in achieving better outcomes….The growing concentration of Medicaid managed care interest and capabilities in a relatively small number of multi-state private MCOs has prompted many states to look at state-managed PCCM, care management, and disease management programs as potential alternatives. Oklahoma has demonstrated that such programs have the potential to produce results that are as good as those produced by private MCOs, and perhaps better, if state Medicaid agencies have the necessary resources and a commitment to truly manage care.
As the national debate on health care reform heats up, with particular controversy focused on whether to provide consumers the choice of a publicly-operated product competing with private insurance plans, Oklahoma’s experience may have national relevance.