Oklahoma State Senate

Communications Division

State Capitol

Oklahoma City, Oklahoma 73105

February 5, 2016

From the desk of Sen. Rob Standridge

Oklahoma is ranked among the bottom states in the nation when it comes to several areas of public health, including diabetes, obesity, cancer, heart attacks and stroke.  These conditions shorten life-spans, diminish quality of life and costs Oklahoma billions in direct and indirect costs as well as lost productivity.

Right now, Oklahoma is facing what could exceed a $1 billion budget shortfall for the coming fiscal year.  Although there are numerous factors which have decreased revenues, we can’t understate the impact of plummeting energy prices and the more than 12,000 jobs that have been lost as a result.

That’s not good.  But what if I told you a program is being pursued by a state agency that would ultimately worsen public health, further devastate our budget and cost jobs in communities across Oklahoma?  It sounds crazy, but it is happening.  That’s why I filed legislation this session to put the brakes on this plan before it’s too late.

Medicaid patients are typically among our most vulnerable individuals—they include the aged, blind and disabled.  The Oklahoma Health Care Authority has requested proposals to create a capitated managed care system for Medicaid in Oklahoma.  Supporters claim it will help the state contain costs and save money.  But I’ve studied the proposal, looked at what’s happened in other states, and I can tell you it will cause costs to skyrocket, result in fewer doctors being willing to see Medicaid patients, and will very likely cause rural hospitals throughout Oklahoma to close their doors.

Under a capitated managed care system, managed care companies are paid fees for the statewide administration of Medicaid.  Right now, Oklahoma’s current Medicaid system has just three percent administrative costs, but those could jump up to 20 percent under capitated managed care.  Those companies promised Florida five percent savings if they let them implement and administer a capitated care system.  Instead, the promised savings were wiped out, and Florida had to come up with billions of dollars to keep the managed care companies profitable.

Texas also adopted capitated managed care for Medicaid.  As a result, less than a fourth of doctors will take on new Medicaid patients.  And Texas hasn’t saved money—that system is costing them much more than we currently pay in Oklahoma.  In fact, if we paid the same amount per participant as Texas, it would cost Oklahoma more than $1 billion over what we’re paying now.  Can you imagine that on top of the $1 billion shortfall?

That’s why I filed Senate Joint Resolution 56, which would require OHCA to end their request for proposals for a capitated managed care system and go back to the drawing board to find a different model to improve efficiencies and patient care in our Medicaid program.  In addition, the Legislature would have to approve any subsequent proposals before OHCA could move forward.

I believe we can and must seek greater efficiency in the use of our resources.  Patient-centered medical homes and other provider-led solutions can help us address costs while better coordinating services on behalf of patients.

Texas and Florida have shown us the result of adopting capitated managed care for Medicaid.  It’s a prescription for higher costs, less access to healthcare, lost jobs and worse health outcomes.  Oklahoma deserves better than that.

To contact me at the Capitol, please write to Senator Rob Standridge, State Capitol, 2300 N. Lincoln Blvd. Room 417A, Oklahoma City, OK, 73105, email me at standridge@oksenate.gov, or call (405) 521-5535.

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