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Milliman Magic Saves North Carolina More Medicaid Money Than Was Actually Spent

Milliman, Community Care of North Carolina

Short Summary of Intervention:

Increase payments to providers and add EMRs and add case managers in the hopes of reducing admissions and emergency room expenses

Links to and List of Materials Being Reviewed:

per capita medicaid spending

 

North Carolina Division of Medical Assistance Chart

Aggregate costs chart

Summary of key figures and outcomes:

  • $177-million savings in 2007 in children’s admissions alone, increasing in the years after that
  • Increase in costs of program more than offset by admissions reduction

Questions for Community Care of North Carolina:

The CCNC website says CCNC is “saving money” and yet the federal government data above notes that North Carolina Medicaid’s costs are between 24% and 40% higher than the costs in surrounding states. How is this “saving money”?

ANS: Refused to answer

North Carolina has suffered cost overruns amounting to more than a billion dollars just since CCNC became the provider for almost all non-disabled adults and children in the state. How is that track record consistent with “saving money”?

ANS: Refused to answer

Why did you hire consultants — and pay them more taxpayer money than any other consultants had ever been paid to do this work — who had never done this type of analysis before and didn’t even realize that the answers were already online?

ANS: Refused to answer

Questions for Milliman:

How is it possible to save at least $177,000,000/year starting in 2007 in children’s admissions when the government’s own data collected expressly for the purpose of studies like these shows you only spent $114,000,000 in 2006?

ANS: Refused to answer

Your defense has been that 2006 was not the baseline. However, the years prior to 2006 all show spending figures lower than $114,000,000. So which year was the baseline?

ANS: Refused to answer

You have also said that there is no baseline period. Can you point us to any other study in any reputable journal which did not have a baseline period?

ANS: Refused to answer

Why did you suppress all the government data above that completely contradicted your findings, or did you not know the government collected this data both on comparative per capita costs and on admissions by age group and payer?

ANS: Refused to answer

If you did not know about this online data, shouldn’t you be changing your conclusions and/or returning North Carolina taxpayers their money?

ANS: Refused to answer

If you thought this authoritative government data showing the opposite was irrelevant or wrong, could you explain why?

ANS: Refused to answer

Were you aware that Mercer’s previous study for North Carolina was also thoroughly discredited for not using that government data and thereby coming up with an impossible answer (the study has quietly been removed from the Community Care of North Carolina website as a result)?

ANS: Refused to answer

If surrounding states have similar Medicaid programs and most North Carolina children were already in CCNC, why not just take advantage of that “natural control” and compare the state as a whole to other states, especially because the federal data mentioned above had already been collected for all those states?

ANS: Refused to answer

In your Letter to the Editor following publication of the above article questioning your savings, which consisted of four questions about the savings calculation, why you didn’t answer any of the four questions the article asked?

ANS: Refused to answer

The very first page of your report says the decline in admissions more than offset the increases in other categories, thus netting out to the massive savings you calculated. Yet after it was shown that admissions did not decline at all, you said in your Letter to the Editor that the decline came from “categories other than admissions.”   Which is it – admissions accounted for more than 100% of the net savings, offset by other categories, or other categories accounted for all the savings?

ANS: Refused to answer

Page 19 of your report says “other Milliman consultants may hold different views.” If members of your own organization wouldn’t agree with you, why should others agree with you when you suppressed data, contradicted yourself, and found mathematically impossible savings?

ANS: Refused to answer

Admission rates in the specific disease categories CCNC was focused on — asthma and diabetes — underperformed surrounding states. In diabetes admissions actually increased on an absolute basis. Where did the savings come from if not from the targeted conditions?

ANS: Refused to answer

More Milliman Magic From North Carolina

Milliman, Community Care of North Carolina

Short Summary of Intervention:

Increase payments to providers and add EMRs and add case managers in the hopes of reducing admissions and emergency room expenses

Links to and List of Materials Being Reviewed

millimanmercer001

millimanmercer002

millimanmercer003

Summary of key figures and outcomes:

$177-million savings in 2007 in children’s admissions alone, increasing in the years after that

Increase in costs of program more than offset by admissions reduction

Questions for Community Care of North Carolina:

The CCNC website says CCNC is “saving money” and yet the federal government data above notes that North Carolina Medicaid’s costs are between 24% and 40% higher than the costs in surrounding states. How is this “saving money”?

North Carolina has suffered cost overruns amounting to more than a billion dollars just since CCNC became the provider for almost all non-disabled adults and children in the state. How is that track record consistent with “saving money”?

Why did you hire consultants — and pay them more taxpayer money than any other consultants had ever been paid to do this work — who had never done this type of analysis before and didn’t even realize that the answers were already online?

Questions for Milliman

How is it possible to save at least $177,000,000/year starting in 2007 in children’s admissions when the government’s own data collected expressly for the purpose of studies like these shows you only spent $114,000,000 in 2006?

Your defense has been that 2006 was not the baseline. However, the years prior to 2006 all show spending figures lower than $114,000,000. So which year was the baseline?

You have also said that there is no baseline period. This strikes us as curious but we could be wrong: Can you point us to any other study in any reputable journal which did not have a baseline period?

Why did you suppress all the government data above that completely contradicted your findings, or did you not know the government collected this data both on comparative per capita costs and on admissions by age group and payer?

If you did not know about this online data, shouldn’t you be changing your conclusions and/or returning North Carolina taxpayers their money?

If you suppressed the data because you thought it was irrelevant, wouldn’t it have been more ethical to acknowledge the existence of the authoritative government data, but then describe why the federal government data didn’t apply and let the reader decide whether it was relevant?

Given that Mercer’s previous study for North Carolina was thoroughly discredited for not using that government data and thereby coming up with an impossible answer (the study has quietly been removed from the Community Care of North Carolina website as a result), wouldn’t it have been wise not to make that same mistake again?

If surrounding states have similar Medicaid programs and most North Carolina children were already in CCNC, why not just take advantage of that “natural control” and compare the state as a whole to other states, especially because the federal data mentioned above had already been collected for all those states?

In your Letter to the Editor following publication of the above article questioning your savings, which consisted of four questions about the savings calculation, why you didn’t answer any of the four questions the article asked?

The very first page of your report says the decline in admissions more than offset the increases in other categories, thus netting out to the massive savings you calculated. Yet after it was shown that admissions did not decline at all, you said in your Letter to the Editor that the decline came from “categories other than admissions.”   Which is it – admissions accounted for more than 100% of the net savings, offset by other categories, or other categories accounted for all the savings?

Page 19 of your report says “other Milliman consultants may hold different views.” If members of your own organization wouldn’t agree with you, why should others agree with you when you suppressed data, contradicted yourself, and found mathematically impossible savings?

Admission rates in the specific disease categories CCNC was focused on — asthma and diabetes — underperformed surrounding states. In diabetes admissions actually increasing on an absolute basis. Didn’t you feel this might be a red flag to suggest that the huge savings your model was showing you might not be valid?

Mercer Says “Choice of Trend” Drives Savings Estimates

Mercer

Short Summary of Intervention as described by company:

Mercer Health AdvantageSM – Mercer Health Advantage (MHA) allows self-funded employers to enroll their employees in new medical plans starting January 1, 2013. These programs are designed to save employers 5% or more of medical plan cost with the same plan design they have in place today. The savings come from select networks with providers chosen for their quality and cost effectiveness. Employers also gain access to dedicated MHA clinical care management with ongoing oversight and audit by a team of Mercer clinicians. Mercer plans to offer MHA to smaller self-funded employers in 2014.   Self-insured clients with Aetna need 1,000 employees, Anthem-1,500 employees or greater on WGS or NASCO claims platform and UHC must have 3,000 employees in the National Accounts segment.

Materials Being Reviewed

All publicly available Mercer outcomes reports and related materials, plus Mercer Health Advantage

Related materials:

  1. Georgia Medicaid
  2. North Carolina Outcomes Excerpts below
  3. Staywell and British Petroleum

Summary of key figures and outcomes:

Comparison of actual vs. predicted spending per North Carolina Medicaid member per month in medical home, by category of service

Predicted vs. actual by age grouping for North Carolina Medicaid enrollees in medical home

predicted versus actual by age for NCpredicted versus actual by age for NC Questions for Mercer

I: Mercer Health Advantage

Since most employers spend less than 5% of their total budget on disease management-sensitive events, how is it possible to save 5% through a disease management program even by eliminating every event with no increase in preventive expenses?

ANS: Refused to answer

If the state of Georgia were able to save 19% through APS disease management, which according to your own reconciliation APS is able to do, shouldn’t you be advising clients to use APS or another vendor instead of yourselves?

ANS: Refused to answer

If you are being retained to help a client find the best disease management solution, wouldn’t offering your own such solution create a conflict of interest?

ANS: Refused to answer

How have you determined the quality and cost-effectiveness of physicians that you “choose” for this network?

ANS: Refused to answer

II: Mercer North Carolina Patient-Centered Medical Home Analysis

The first North Carolina chart shows savings in every category. How is it possible to save money in all categories? Doesn’t some component of spending have to go up to make everything else come down? Or, as the outcomes measurement textbook says: “If you insulate your house, you’ll save money on heat, but not on insulation.”

ANS: Refused to answer

Is it possible that the reason savings appeared in all categories is that you simply chose to project a high trend, so that you could show more savings against that trend, or as you’ve said in the past: ““We can conclude…that the choice of trend has a large impact on estimates of financial savings”?

ANS: Refused to answer

If medical homes save money through more primary care reducing the need for specialist visits, why combine both categories when reporting savings?

ANS: Refused to answer

Inpatient spending fell by more than 50%, which implies that non-birth-event admissions would have fallen by more than 70%. How does this reconcile with the official government admissions data, which shows no change in admissions?

ANS: Refused to answer

There was no noticeable decline in North Carolina in the official government list of primary care-sensitive admissions during the period you analyzed. How do you reconcile that data with your own data showing massive admissions reduction?

ANS: Refused to answer

The second North Carolina chart shows that per-member per-month expenses in children under 1 year of age declined more than 50%. Since there is essentially no common chronic disease in this age group, where did the savings come from?

ANS: Refused to answer

The largest expenditure in this age group is in neonates. How does your data reconcile with the government data showing no change in neonatal admissions?

ANS: Refused to answer

How were you able to show such massive savings for this age group in your medical home analysis when this age group wasn’t eligible for the medical home?

ANS: Refused to answer

III: Mercer Georgia Analysis

Assuming that disease management-sensitive medical events account for roughly 8% of spending in a Medicaid population, how is it possible to save 19% through a disease management program?

ANS: Refused to answer

How do you reconcile your conclusion that the APS disease management program saved 19%, when an FBI investigation found that APS had largely failed to perform its disease management services?

ANS: Refused to answer

IV: Staywell and British Petroleum

Did you caution British Petroleum that the savings you validated for them was at least 100 times the savings that Staywell itself claims is possible?

ANS: Refused to answer

Did you question Staywell about how they were able to outperform their benchmark by 100-fold?

ANS: Refused to answer

Why didn’t you or Staywell provide your viewpoint when requested to, following the observations on The Health Care Blog that these savings were mathematically impossible?

ANS: Refused to answer

V: Mercer Qualifications to Do Outcomes Analysis

It appears that no one at Mercer has ever achieved Advanced or even Standard Certification in Critical Outcomes Report Analysis, either through DMPC or one for the Validation Institute that is specifically geared to benefits consultants.   Has any Mercer consultant taken either course and failed, or has no one at Mercer ever taken either course?

ANS: Refused to answer

Assuming the mistakes highlighted above are innocent miscalculations and not purposeful deceptions – and with senior consultant hourly billing rates well in excess of $500/hour – don’t you think it would be a good idea to become qualified in analyzing outcomes reports and reconciliation methodologies that you are being paid to analyze?

ANS: Refused to answer

Is there another course in outcomes analysis that we are unaware of that your consultants have taken, and if so, how did they still make all the mistakes above?

ANS: Refused to answer

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