Medicaid Managed Care - U.S. Senate Special Committee on Aging

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CHALLENGES AND RESPONSES
Our review of 10 State <strong>Medicaid</strong> agencies revealed 5 major internal challenges they face
as they adapt to managed care. The challenges, in essence, are generic ones that any kind
of organization is likely to face in making a fundamental shift in its products and modes of
operation. In this section, we explain the challenges and the agencies's responses to them.
In large part, our discussion of the responses offers further illustration of the challenges
by revealing the obstacles confronted in the implementation process." 3
Challenge #1: Establishing a Core Developmental Team
To chart the course, the <strong>Medicaid</strong> agencies must assemble a leadership core that is
committed to the managed care mission, energized by the conceptual and operational
challenges it creates, and determined to persevere in the midst of complexity and
uncertainty. This core must extend beyond the level of politically appointed officials into
the career staff of the agency.
The formative stage of managed care program design and implementation can extend over
a number of years. It is a period of innovation requiring people at the helm who thrive in
such environments. The feasibility and durability of the reforms are likely to be enhanced
if the leadership team includes some individuals that have been part of the agency's career
staff and that are well-steeped in the operational and policy landscape of the <strong>Medicaid</strong>
program.
Each of the agencies has assembled a core of officials who are strongly committed
to managed care reforms.
In most of the <strong>Medicaid</strong> agencies we reviewed, there is a core managed care leadership
that is highly committed to managed care reforms.'" The members of the team tend to
see these reforms as vital not only for containing costs, but also for improving the access
of beneficiaries to good quality care. They are curious about the dynamics of the health
care marketplace and about how the agency can best relate to it. They seek to act as
prudent purchasers of health care on behalf of their customers -- the <strong>Medicaid</strong>
beneficiaries.
The core staff come almost entirely from the fee-for-service sector of the agency or from
other State agencies. Staff in the <strong>Medicaid</strong> agency tend to see the managed care office as
the place where the action is and as a good place to get ahead. Or at least to avoid losing
ground. As one State official noted: "Everyone knows that the office of managed care
will be the last place to suffer any downsizing."
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