Michigan Association of Health Plans

Integration: Rebuttal of Allegations

First, in the Medicaid managed care system discussed in the last blog post, our members embrace risk. They must accept every patient that chooses them or is assigned to them by the state. There is no such thing as a waiting list. Embracing risk means early identification of those with complex needs, and provision of personalize case management and care coordination.  Performance standards established by the State Medicaid Program is tied to capitation withhold as well as other contract oversight assures this doesn’t happen.

I know from our advocacy of what the bottom line of our members have been in Medicaid over the past years—and those are margins that are less than 2 percent. That’s compared to 10 percent in the utility industry (also regulated by the state) and substantially below the margins among our friends in the hospital industry. Not to mention pharma margins, whose costs we all have to absorb.  There is no similar measure in behavioral system as they are not at risk—are cost settled with the state at the end of each year, and have the ability to swap general fund dollars (intended to be used for non-Medicaid services) with Medicaid funds.

Second, there is the idea that integration somehow “privatizes” the system. As noted, our members include for profit and non-profit operations.  If you were a patient, you could not tell if the company managing your care was one or the other. The contract system and its management by the state ensure that the care is delivered to identical standards. And, of course, the fact is that care delivered today in the mental health system is by doctors, hospitals, therapists, transportation companies, and other entities that are not state employee. They are in the private sector.

So when advocates say that they are worried about “a wholesale transfer of $2.4 billion taxpayer dollars …to the private, profit-making insurance companies,” they are simply wrong and they know they are wrong.

The Medicaid Health Plans have been managing nearly $6 billion dollars for Medicaid services to over 1.7 million Medicaid beneficiaries.  It does seem strange that the same advocates have never complained upon physical health services being provided by these same health plans.  Over the past months we have addressed numerous false statements, (myths) that are used for no other purpose than to frighten members and their families into taking action that (at least in my view) with a goal of maintaining our current system that does not benefit them today, and that over time will be increasingly unable to benefit them and one in which they acknowledge is failing.

But I will be the first to say I believe our members have the capabilities, proven over nearly 20 years, to do a better job of providing services than the fee for service operations that are now in place in the mental health system. There is little to no incentive for the PIHPs to look for the most cost effective way to get better results. They get bills in, they pay them. In fact, the longer someone stays in the system, the better their finances look, the larger their bureaucracies are and the more taxpayers pay without getting results.


Our current bifurcated system cannot be maintained. Those who support it recognize that cost constraints are here and will only get worse as the populations served get larger and costs for services increase. Their answer is to go to lawmakers and ask for more money.

I just don’t see that happening. So for the betterment of the consumers I believe an integrated managed care system for mental and physical health is vital. But we don’t get there overnight and we have to make sure that no one is left behind. I believe our members can do the job, as they have for years. And the idea that this is a money-grabbing privatization of the mental health system an incorrect and dangerous mischaracterization and may create an environment under nothing will be happening—again.  Unfortunately, the Governor’s budget earlier in the year placed the cart before the horse and made decisions without stakeholder participation.

We are looking at ways to put organizations with proven track records of getting better results in the most cost effective ways into in our mental and physical health systems as we recognize how interrelated those issues can be. We are hoping that folks can be open-minded to support this potential.