Privatized Medicaid savings again in dispute with DHS chart showing fast-rising costs

A new chart presented by Iowa's Medicaid director Tuesday added to the controversy over whether taxpayers are saving money by having private management companies run the $5 billion program.

The chart shows the costs per patient rising this fiscal year. That's in part because the state is paying the privatized firms more than previously, officials said.

The average total cost per year for each Medicaid member is climbing 11 percent this fiscal year, to more than $10,000, and it climbed 6.6 percent last fiscal year, the data shared in a Tuesday meeting showed.

Such spending dropped 4.6 percent two years ago, which was the first full year Iowa had private Medicaid management, and by 1.4 percent the previous year, the chart shows. It predicts such costs will drop 4.7 percent next fiscal year, which starts July 1, 2019.

Read more: https://www.desmoinesregister.com/story/news/health/2018/09/11/iowa-privatization-medicaid-savings-health-care-government-mcos-kim-reynolds/1272849002/

The argument has always been that the private sector can perform tasks more economically than government agencies. While this chart is only a blip of data, it does run counter to that argument--something that former state employees recognize as a fallacy by the time that other factors such as contract administrative and monitoring costs are included.