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Local Health Departments in a Managed Care Environment
Local Health Departments Involvement in the Direct Delivery of Personal Health Care and Related Services
Rob Fulton, M.Ed., Director of Public Health, Ramsey County Department of
Public Health, St. Paul, MN.
Donna J. Zimmerman, Director, Government Programs, HealthPartners, Minneapolis, MN.
Bonnie J. Sorenson, M.D., Director, Volusia County Public Health Unit, and Vice
President, St. John's River Rural Health Network, Daytona Beach, FL.
As indicated in the previous session, one of the most controversial questions often raised by the implementation of Medicaid managed care in a community is what future role the local health department (LHD) should
play in the delivery of personal health care and related services. This session explored the issues
associated with LHDs' involvement in direct service delivery from a number of different
Rob Fulton drew upon his
own LHD's experience and discussed what issues LHDs must address if they wish to continue
providing certain services to Medicaid recipients as subcontractors to managed care
Among the key things he identified that LHDs must focus upon were the
- Identify those services that are important to the community, consistent with your mission,
and that you do a good job providing. Be able to accurately identify the costs of providing
your services, as well as your areas of particular expertise (e.g., special populations).
- Work hard to understand MCOs, how they operate, what requirements they must meet to
serve Medicaid recipients in your State, and how you might best help them meet their
objectives and the community's needs. Approach the MCOs not as adversaries, but as
potential partners in improving community health.
- Be prepared to do what it takes to carry out new roles, including the subcontractor role.
This may involve staff training, new systems, etc.
- Continue to organize for public health and never forget your mission.
Donna Zimmerman approached the issue of LHDs serving as subcontractors to managed care
organizations from a health plan perspective. She discussed a number of activities that
HealthPartners, one of the largest
health maintenance organizations (HMOs) in Minnesota, carries out with LHDs and school-based clinics.
In discussing what LHDs need to
do to become attractive subcontractors to health plans, she recommended, among other things,
- Get to know the plans and the networks, but don't assume that the plans are aware of all
the things that the LHD does in different service areas and for different populations.
- Develop a package of "niche" services that are needed by the plan and that the LHD is
particularly skilled in providing.
- Bring data on your utilization and outcomes to your meetings with plans.
- Develop systems for billing and care communication/coordination.
Finally, Dr. Bonnie Sorenson discussed her LHD's experience operating as a fully capitated health plan under the Florida
Medicaid program. The LHD found that it could not remain financially viable providing care
under the State's capitated payment system. There were several reasons for this, including:
- The high cost of providing for the recipients medical and related social needs (which the
LHD had traditionally done), compared to a much more circumscribed set of purely
- Problems of adverse selection that the LHD experienced.
- The difficulty the LHD encountered, given the State's regulatory policies, in expanding to
neighboring geographic areas. This expansion potentially would have enabled the LHD to
spread its overhead costs and risks over a substantially larger enrolled population.
Dr. Sorenson recommended, among other things, that LHDs exploring the possibility of
becoming full risk providers should fully understand relevant accreditation requirements,
carefully analyze their own utilization and costs, and make the necessary investment in
management information systems (MIS).
Medicaid Managed Care Arrangements: Local Health Department and Community and Migrant Health
Center Experiences, Case Study of the Ramsey County Health Department and the West Side Community
Health Center, National Association of County & City Health Officials, 1995.
House File 1303, 1997 Minnesota Legislative Session, billed introduced, but not passed at the time of the
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