Nursing homes are expensive. So Florida's Medicaid programs try to give frail, elderly people other options — bringing in meals or home nursing, for example — that help them stay at home or in less expensive settings as long as possible. That's good for the elderly as well as the taxpayer, but the state's approach needs an overhaul.
The Legislature has single-mindedly focused on privatized home care — giving primarily for-profit companies hundreds of millions of Medicaid dollars over the past five years — while keeping the budgets flat for two similar public programs. The result is that taxpayers are spending more and getting less. And some of Florida's frail elderly languish and die on waiting lists for public programs that don't get enough money.
As Times staff writer Stephen Nohlgren reported Sunday, the privatized Nursing Home Diversion (NHD) program costs more than two publicly administered programs at the start — when a client enters the program and can still live at home. But NHD hasn't delivered the expected cost savings at the back end — when that client finally needs a nursing home. In fact, some clients quit the program exactly when they are poised to enter a nursing home. That means Medicaid — thus, the taxpayer — ends up paying the full cost anyway.
An actuary hired by the state estimated that managed care companies were spending only 70 cents on the dollar on client care the first quarter of this year. Privatization can be a good option for government when private industry can provide the same service at less cost. So far, that hasn't been happening in this case.
There are some easy fixes for the Medicaid problem. For example, let one agency manage home-based and assisted living programs. That way, one agency assesses which program best suits a frail elderly person and points that person to enroll there. Focus on people, not programs.
The Legislature also should not fund these three programs separately. That creates unfair imbalances in which needy people in one program get no service because the program is out of money, while a parallel program is serving all of its clients, no matter their need level, simply because the Legislature gave it money. Make it one pot of money for the Department of Elder Affairs to manage. Let the department match the money with the need.
Finally, if private enterprise wants to play, make it prove it can do the job cheaper. Establish the cost of care. Factor in any differences in a client's frailty. Figure out what the state would pay for that patient's care. If private industry can do the job for less, let it pocket the difference. If it can't, then privatization makes no fiscal sense.