How Jeb Bush Reformed Medicaid
What if, knowing the biggest federal entitlement program in his state — Medicaid — was broken, a governor decided to challenge the status quo and do something about it? What if a Medicaid program used consumer choice, provider competition, and market forces to get better value for patients and taxpayers? What if it worked and the new Medicaid program saved money while giving patients higher-quality care and more choices?
You don't need to wonder. It happened in Florida. When a governor led.
I know how hard it was. I was Governor Jeb Bush's health-care secretary. I, with a committed team, was tasked with convincing a skeptical legislature and federal bureaucracy that this was a good idea. I remember when Governor Bush asked the simple question: If you could design this program from scratch, what would it look like, both to the consumer and to the taxpayer paying for it?
In 2006, Florida began implementing its reforms. The state created real consumer choices for the first time, with flexible benefit designs and transparent provider networks. Insurance plans responded to the competitive environment by offering additional benefits, like adult dental care, vision care, over-the-counter medications, and other benefits — without adding any cost.
For the first time, the state measured quality outcomes and held managed-care plans accountable for them. Florida paid the plans risk-adjusted rates, to incentivize plans to improve outcomes for the sickest patients rather than cherry-pick the well ones.
It worked: When the Heritage Foundation looked at areas of Florida where the pilot program took place, and compared them with the rest of the state, they found that areas with the program saw greater improvement on more than two-thirds of health-care quality measures (drawn from the Healthcare Effectiveness Data and Information Set, or HEDIS). Improvement was made with well-child visits, control of high blood pressure, frequency of prenatal care, diabetes control, and frequency of certain screening services.
It worked for taxpayers, too. Medicaid's cost per member decreased, according to multiple reports, including an independent evaluation by the University of Florida. Let me repeat: While medical-care inflation has grown by at least 3 percent annually for all consumers, Florida's per-member Medicaid costs have actually decreased.
This was a sweeping transformation of this federal program for the poor — the biggest change to Medicaid since 1965. It was anything but easy, and there were people hoping it would fail.
But it didn't. The reforms were so successful, Florida expanded them statewide in 2014. The result? Quality improved again. Florida recently announced that in 2014, its reformed Medicaid plans performed as well as, or better than, the national Medicaid average on 65 percent of HEDIS measures, an improvement over 2013 results. Prenatal care, diabetes management, and breast-cancer screenings — all better.
Because of obsolete federal limitations that did not respect the uniqueness of our state, we could not redesign Medicaid from scratch. But we did the best we could, and the results are unassailable.
If elected, Governor Bush will use this experience —challenging the status quo, making tough proposals, and fighting to implement them — to disrupt Washington, D.C., and restore freedom to states to develop health-care systems that work for their citizens. No federalist could dream of a better proposal: Move power closer to the people and unleash the innovation and entrepreneurship in each state.
Governor Bush's proposals include investment in research and technology, something he believed in as governor. Research is the key to finding cures and improving the human condition. Federal sequestration, done only because our federal leaders could not even accomplish a budget, cut billions of dollars of National Institutes of Health-funded research.
Governor Bush's proposals attest to his belief in the power of consumers to make choices in a marketplace minimally encumbered by one-size-fits-all federal rules. His proposals respect job creators and unleash reinvestment into growing employment opportunities. He knows a key to better health-care access is a secure, well-paying job.
Governor Bush's health-care reforms produced results no one else can claim. These reforms, properly replicated nationally, can unleash our economy and provide opportunities for the next generations that don't exist today.
To those who care about federalism and state authority, I ask this question: If you could design a health-care funding system for the poor from scratch, what would it look like?
Governor Bush wants to give you the chance to explore the answer.
Alan Levine is the former secretary of health-care administration for the State of Florida and the State of Louisiana, and also serves on the Board of Governors for the State University System of Florida. He currently serves as president and CEO of Mountain States Health Alliance, the largest not-for-profit health-care system in Northeast Tennessee and Southwest Virginia.