State Medicaid program saved $21 million in its first year, audit reports

November 18, 1994|By Jonathan Bor | Jonathan Bor,Sun Staff Writer

A state program that links Medicaid patients with primary care doctors saved taxpayers $21 million in its first year even while increasing the number of doctor visits, according to an independent review released yesterday.

Money was saved in part because physicians ordered fewer laboratory tests, X-rays and other radiological scans, the audit said. Although the program achieved only a modest reduction in emergency room visits, patients appeared less likely to go there with minor problems as they gained experience with their regular doctors.

"If you get sick, there is a relationship which is so important between the individual and the doctor," Gov. William Donald Schaefer said yesterday at a news briefing.

Health Secretary Nelson J. Sabatini started the program, called Maryland Access to Care, or MAC, in December 1991 as a way of controlling costs while improving the quality of care given to low-income people who qualified for free medical coverage under Medicaid. Benefits are financed by the state and federal governments.

Officials had long observed that many Medicaid families lacked regular doctors who knew their medical histories. As a result, patients relied heavily on emergency rooms and often delayed seeking treatment until they were seriously ill. Physicians often ordered a new battery of tests each time a Medicaid patient walked in because they were unfamiliar with the person's past treatment.

Under MAC, most people who qualify for Medicaid through such welfare programs as Aid to Families with Dependent Children or Supplemental Security Income are required to choose a primary care doctor or join a health maintenance organization. More than 200,000 patients are enrolled, representing most of Maryland's Medicaid population.

The independent review was conducted by Project HOPE, a private nonprofit organization that was given a federal contract to evaluate the program's effectiveness.

Gail Wilensky, a senior fellow at the organization, said many states have enacted programs to direct patients into managed care, but most require people to enroll in health maintenance organizations. Maryland's may be the only program that allows patients to choose a private doctor or an HMO, she said.

Dr. Wilensky is the former administrator of the federal Health Care Financing Administration.

Project HOPE, which is evaluating three years of operations, has so far completed its review of the first year. Comparing MAC patients with people who had not yet enrolled, the review found:

* Patients were more likely to use a primary care doctor, and made greater use of preventive services such as well-child and prenatal care.

* Spending on laboratory tests was 29 percent lower; costs for radiologic scans were 9 percent lower.

* Patients made 3.5 percent fewer visits to emergency rooms. "It's a small effect, but we found some evidence this might improve the longer people stayed on the program," said Julie A. Schoenman, senior research director with Project HOPE.

* Doctors ordered more prescription drugs overall, but less for patients on the program for a year.

Mr. Sabatini said the program achieved a gross savings of $35 million in its first year. To calculate the actual savings, officials subtracted $2 million for administrative costs and $12 million in higher fees paid to doctors accepting MAC patients.

"As I've been listening to all the election-year rhetoric over the last eight months, toward the end I was beginning to wonder, did we do anything right?" Mr. Sabatini said.

"I think the report we are presenting today shows in fact there is a lot we did right," he said. "We proved you can save money by just not arbitrarily slashing budgets to meet artificial targets."

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