Signs of hope in Hawaii’s Medicaid experience

The challenge of providing medical care for the most vulnerable is not new, but with the weak economy, rise in homelessness and the focus on cutting government debt, readers may assume that government has few choices other than cutting health services or other programs to pay for escalating costs.

But there is hope for a solution, and we don’t have to look beyond Hawaii for proof that it works.

A pioneering partnership emerged 17 years ago, on Aug. 1, 1994, between the state, the community health centers and AlohaCare, Hawaii’s only health insurer dedicated entirely to the "safety net."

The health centers formed AlohaCare as a response to the QUEST program, which was one of the first efforts in the nation to establish managed health care for Medicaid recipients.

The partnership between a local, nonprofit insurance company and the community health centers was to generate a model of care to manage services efficiently and save taxpayers’ money.

The model emphasized a strong relationship between the member and a primary care physician to manage their health care needs.

For those served by the community centers, the system includes support for both the medical and social needs of patients and their families.

Under the QUEST program, insurance plans are paid a fixed, per-person amount under which they agree to provide services. If the costs of care exceed our revenue, we are still obligated to cover the services. If the costs are less than our revenue, we can place the surplus in reserves for future needs.

It would be difficult to detail the savings to taxpayers, but over our 17-year history, AlohaCare has saved taxpayers tens of millions, perhaps hundreds of millions of dollars.

AlohaCare has also maintained a level of financial strength to serve even more members in the future, as well as returning money back to the community through financial support to other nonprofits promoting care management, disease prevention and healthy lifestyles.

Our financial stability also enabled us to absorb most of the state’s recent 3 percent reduction in Medicaid reimbursements without reducing reimburse- ments to our physicians, specialists and most other providers.

We recognize the dedicated service that our network of physicians and providers deliver to our members, despite Medicaid reimbursements that are below commercial insurance rates, and hope that our absorbing the state cuts will encourage them to continue to serve the Medicaid population.

Meanwhile, the concept of a "Health Care Home," in which a provider is financially rewarded for offering a broad range of health and support services to patients, is being tested by AlohaCare.

We are also testing a "pay-for-performance" model of quality improvement, where participants must reach pre-determined markers of performance to receive full funding.

Although the model partnership between the state, AlohaCare and the community health centers and doctors and providers is both constructive and instructive, it is not indestructible. It depends on society and our political leaders accepting that quality health care for people in poverty is not a luxury and requires consistent support.