Weekly Wire
Salt Lake City Weekly Setting Granny Free or Gambling With Her Care?

By David Madison

OCTOBER 20, 1997:  For elderly Medicaid patients who feel trapped in their nursing homes, a new program from the Utah Department of Health may signal it's time to break out.

Under Medicaid guidelines, senior patients in need of long-term care have few options, and the Department of Health's Mike Morgan says, "Going into a nursing home is not often a desirable end for the elderly."

So after two years of percolating, the state has launched a plan to create a kind of mini-HMO just for certain seniors along the Wasatch Front. Elderly Medicaid patients in need of long-term care will be able to volunteer for the program, which will essentially privatize services now restricted by federal guidelines. For seniors living in nursing homes, the program could offer a cost-effective way out by paying for other types of assisted living or at-home care.

Though not always deserved, nursing homes do carry a reputation for confining their elderly clients. Stories about grandma jumping the fence in her nightgown and grandpa making a dash for the gate with his walker abound.

But when it comes down to making a choice between a nursing home and an unproven system, the idea of auctioning off granny's health care to the lowest bidder might not settle well with everyone. As one observer puts it, "You're trusting this whole thing to one prime contractor."

That one contractor will be asked to provide everything from prescriptions to doctors' visits. "There is a feeling politically that private companies can save money, but this needs to be demonstrated," says Morgan. The Medicaid administrator understands the public's concerns and says the program is designed so, "The contractor will provide the most appropriate array of individual care."

However, here's where the wheelchair rubber meets the road: Like an HMO, the private contractor will need to manipulate an economy of scale in order to both increase service and cut costs. Managed care also depends on a variety of clients to even-out the risk of caring for a group. In less wonkish terms, that means many are waiting to see how contractors manage to cut costs while serving a group that demands a lot of care.

"How do you share the risk when everyone is in the same category?" asks Kirsten Ball with the American Association of Retired Persons. AARP doesn't oppose the Department of Health's plan, but remains curious about its risks and benefits.

"Colorado is doing this already," says Ball. "And they're watching it very closely because of the quality issue. If you can do that, that's wonderful. If you can't, it's not so wonderful."

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