Spend less. Save more. And make people healthier. That was how State Sen. Donne Trotter (D-Chicago), at a gathering of health care practitioners held at Mercy Hospital in Chicago this past Monday, described the intertwined goals of the Medicaid reform package Gov. Pat Quinn signed into law in late January after the bill sailed through the General Assembly.

The legislation seeks major savings to the joint federal-state health care program by deploying more information technology, placing tighter restrictions on pharmacy payments, and seeking to move more of the the elderly as well as those with mental illness and developmental disabilities from institutions to home and community-based settings. It also makes it harder for adults to get benefits by ending presumptive eligibility for care, and limits access to the state's All Kids health care program to children from households earning less than 300 percent of the federal poverty level. (The latter will result in the loss of health care for an estimated 3,100 children, though enrollees losing coverage will get to stay on with All Kids for 12 months starting in July as they look for a new plan.)

And the law bets big time on managed care, or "coordinated care," to use its parlance, with the goal of getting 50 percent of Medicaid participants into such programs by 2015. "The intent is to do it well, carefully, and not have some of the problems we've had historically in Illinois," State Sen. Heather Steans (D-Chicago) said Monday during a discussion about managed care. "We expect to see a range of models developing."

Problems with Illinois' Medicaid program and its recent history with privatized managed care have been legion over the years. One example ocurred between 2000 and 2004, when Illinois and the U.S. governments paid the insurer Amerigroup $243 million to provide insurance to eligible low-income people. But despite the heavy investment from taxpayers, the group "systematically avoided" enrolling pregnant women and unhealthy patients. There are a host of similar stories here and in many other states as well.

"We have a right to be concerned about that because it hasn't worked well in the past," Michael Dobias, director of policy and advocacy for the Healthcare Consortium of Illinois, said of managed care. The Consortium sponsored Monday's event.

Steans, one of the lead negotiators on the Medicaid bill, told the audience that legislators did not want to create "fully capitated" health care for Medicaid beneficiaries. In a capitated system, providers "get a flat, prearranged payment in advance per month. Whether or not the patient needs services for a particular month, the provider will still get paid the same fee. The more treatment a patient needs, the less money a health provider makes." (The Illinois Department of Healthcare and Family Services, or DHFS, does contract out with several providers for voluntary capitated health care delivery in some parts of the state.)

The state also has created its own managed care organizations, and they have seen success, as Progress Illinois has noted before. DHFS's Illinois Health Connect, for example, enrolls around 1.8 million Medicaid recipients, connecting them with their primary care doctor at a medical home.  

Steans said yesterday the medical home concept was a good one, but it wasn't going far enough. She called for creating more "shared risk and a payment structure that goes along with incentivizing keeping people healthy," Steans said. "Right now our fee-for-service model pays for quantity of care, not keeping people healthy."

As state government shifts under the Medicaid reform bill, it too soon to say at the moment what will happen with a program like Illinois Health Connect, according to Mike Claffley, a DHFS spokesman. The department is focused right now, he said, on getting a new "integrated care" program for at-risk Medicaid patients living in Lake, Kane, DuPage, Will, Kankakee and suburban Cook County up and running.

This effort, which aims to create a health delivery system along the lines of Kaiser Permanente in California, uses two private companies, Aetna and Centene. But the state says it has safeguards in place to protect patients. "The contracts will not allow the companies to profit from denial of needed services," a press release about the effort, meant to save the state $200 million over five years, states.

While legislators and state staffers seek out savings from Medicaid, it's worth noting the program has become more expensive in recent years in large part due to the Great Recession and its aftermath. Mirroring national trends, as the economy started its nosedive in the Land of Lincoln, more and more people sought coverage through the state's Medicaid system. And according a recent Kaiser Family Foundation report (PDF), between June 2009 and June 2010, Illinois' Medicaid enrollment shot up another 12 percent, nearly doubling the U.S. average over that time period. Which is to say the economy here continues to pressure people into seeking out a health care option when they can't get it through work or purchase a plan on the private market, a task that isn't easy.

Managing the health safety net during a time of budget strain is getting harder in Illinois. Despite the reforms and new care delivery efforts, it's still seen as a place to cut. Gov. Quinn's fiscal year 2012 budget as proposed puts $552 million in Medicaid rate reductions on the table, a move the Illinois Hospital Association says will hurt facilities' ability to assist low-income Medicaid beneficiaries. But the legislators at the panel Monday in Chicago insisted Quinn's budget pitch will change as the budget process unfolds in Springfield. "It's not a done deal," Trotter said.