Tell us again how the plan worked.

Photographer: Daniel Acker/Bloomberg

Jeb Bush and Florida's Medicaid Meltdown

Christopher Flavelle writes editorials on health care, energy and environment for Bloomberg View. He was a senior policy analyst for Bloomberg Government and chief speechwriter for the leader of the Liberal Party of Canada.
Read More.
a | A

To appreciate what went wrong with Jeb Bush's attempts to reform Florida's Medicaid program, and why they bode so poorly for the health-care policies he would pursue as president, you could look at the state's dismal quality-of-care scores, or its sharp drop in Medicaid spending, or a judge's ruling from December that Florida is failing low-income children. But first, you should just talk to Louis St. Petery.

St. Petery is a pediatric cardiologist in Tallahassee. Some of his patients are children on Medicaid, and when we first spoke last week he had just seen a 3-week-old boy with a heart murmur. The baby's mother had tried to enroll him in the privately run Medicaid plan that St. Petery participates in, but something got messed up in the paperwork. Fixing it would take weeks, which meant St. Petery had to choose between delaying needed care for an infant or not getting paid. He chose the latter.

St. Petery, who is also vice president for the Florida chapter of the American Academy of Pediatrics, says that story is typical: Too many plans, too much administration and plenty of patient confusion, along with too little spending, have made Florida's Medicaid program a mess. "Continuity of care goes to hell," he said. The numbers back him up: In 2013, almost half the children covered by Florida's Medicaid program didn't get the recommended number of doctor visits in their first 15 months, putting Florida in the bottom quarter of Medicaid plans nationwide.

It wasn't supposed to be that way. Bush, who served as Florida's governor from 1999 to 2007, faced the same problem as most governors: Medicaid costs were chewing up a growing chunk of Florida's budget. Most states responded by letting private insurers manage the program's health-care benefits. Bush went a step further: In a pilot program that started in 2006 and eventually spread to five counties, he let those insurers decide what benefits to offer in the first place, using those benefit packages to compete for customers.

No other state had tried that. The idea, which Bush called "empowered care," was to let consumers shape and improve the market, rather than have the government tell those plans what to offer. (The reforms also let people take their benefits in the form of a voucher and use it to buy care outside of Medicaid -- something few people wound up doing.) The plan's features were "unprecedented," said Joan Alker, a health-care expert at Georgetown University who has studied Bush's reforms since their introduction.

The idea seemed promising. In a functioning market, letting insurers choose what to offer, and letting beneficiaries choose which of those products best fit their needs, would mean better results over time as insurers rushed to compete.

"The results worked out," Bush told a group of health-policy experts in 2012. "We get better health-care outcomes, Medicaid beneficiaries are more satisfied with the choices that they had, and we had a control of costs to allow us to fund the priorities of the state."

The state's data renders a different verdict. In 2013, the latest year for which numbers are available, the plans taking part in Bush's reform program ranked below the national Medicaid average on 21 of the 32 quality indicators reported by the state. In some cases, those results were dramatically worse than in other states:

-- Almost one-third of pregnant women got no care within their first trimester, and just 1 in 2 women had a postpartum visit between three and eight weeks after giving birth. Those figures put Florida in the bottom 25 percent of Medicaid ratings nationwide.

-- Less than two-thirds of adolescents got their required immunizations or lead screening. Fewer than half the children covered by the plans saw a dentist.

-- Half of adults age 46 to 85 who were diagnosed with high blood pressure weren't getting it adequately treated. More than half of those with diabetes, a leading cause of adult blindness, failed to get an annual eye exam. Two-thirds of diabetics weren't getting adequate treatment for cholesterol, and just 45 percent had their blood-glucose levels under control.

Those results aren't just the product of a few lousy plans. The chart below shows the number of indicators that were better or worse than the national average for plans that took part in Florida's Medicaid reform program in 2013:

What makes those numbers interesting isn't just that they trail most other states. In many cases, they also trail the Medicaid program that Bush wanted to replace, which continued to operate in most of the state until last year.

What happened? People do a poor job of predicting what types of health-care services they'll need, Alker said, and making sense of the different options turned out to be hard for beneficiaries. Bush's attempt to "engage them as consumers" sounded good. It just happened to lead to worse care.

But what really stands out about Bush's broader record on Medicaid was that by the time he left office, Florida's program overall started to buck the national trend of ever-rising costs per person. In 2007, Florida spent about $7,000 on each Medicaid beneficiary, the same as the national average. Since then, the national spending level has increased, to about $7,500 in 2013. Florida's spending went in the opposite direction, falling to below $6,200 in 2013 -- a gap of about 20 percent.

It's possible that without those cuts, the access and quality indicators under Florida's Medicaid reform wouldn't be as poor, or that the program as a whole would compare more favorably against the national average. It's also possible that those reductions were the point. "It's all about money," St. Petery told me.

Perhaps the greatest repudiation of Bush's reforms came from the state government itself. Last year, Florida replaced its entire Medicaid program with what it calls Statewide Medicaid Managed Care. That new program incorporates elements of those reforms, but with safeguards that acknowledge its problems.

Shelisha Coleman, a spokeswoman for Florida's Agency for Health Care Administration, said the new approach is an attempt to address what wasn't working. That includes an expansion in the benefits that insurers are required to provide, more money for physicians, more doctors per beneficiary and greater fines for insurers that don't meet the new standards. (Others I spoke with, including St. Petery, questioned how much difference those new standards will make.)

Those changes were partly a result of increased pressure from the federal government, and partly a response to pushback from the state's doctors. In 2005, the pediatric association sued the state charging that Medicaid paid doctors too little, resulting in low access to care. In December, a judge ruled in the doctors' favor, concluding that Florida's private Medicaid plans "do not provide care with reasonable promptness," "do not provide care with equal access," and that the program "fails to meet the federal requirements" for Medicaid.

In response, the state effectively disowned the program that Bush did so much to shape. "The judge's outdated observations pertain to a Medicaid program that no longer exists," the agency said. By contrast, what replaced that program was "cost-effective and a working success.”

This month, Bush told an audience in Iowa that Obamacare should be replaced. In its place, he proposed the model he introduced in Florida.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Christopher Flavelle at cflavelle@bloomberg.net

To contact the editor on this story:
Stacey Shick at sshick@bloomberg.net