Colorado Medicaid reform expands patient power

(John Andrews in the Wall Street Journal, Aug. 18) My new favorite CD is "Don't Let It Stop You," by local mother-daughter singers Linda and Jessica Storey and their band, the Alleluia Blues. "Hold onto your dreams, though mountains fall," sings Linda. "Don't ever give up the will to survive." The song was written after Sept. 11. But it also evokes the life story of this 51-year-old rocker, who has battled multiple sclerosis for almost 30 years. She didn't let that stop her from building a marriage, raising two children, founding Musicians Against MS--and recently, helping to pilot a revolutionary approach to Medicaid in Colorado.

CDAS, our state's experiment with Consumer-Directed Attendant Support for the severely disabled, got started in 2002. The wheelchair-bound Linda Storey was one of its first four clients. The program now has 146 participants, each newly empowered to hire and fire their own caregivers. Quality of care and patient satisfaction are up, costs are down, and legislators approved offering the option for 33,000 Medicaid recipients statewide in 2006.

If there is more alleluia and less blues in the Storeys' music these days, CDAS is a big reason. "It gives you your life back," Mrs. Storey told me. "I'm in control of my health now." Under a federal waiver obtained by Colorado officials, she selects the health aides who come to her house, bypassing the provider agencies otherwise required under Medicaid rules for home- and community-based services.

Jessica, a 21-year-old anthropology student, now gets to be one of those paid caregivers. Nowadays, the entire team of aides is reliable and well qualified, she told me--in contrast to the ill-trained and even scary individuals sent in by agencies over the years. Several even robbed the family, Jessica recalled.

Scheduled agency personnel would often not show, leaving Mrs. Storey alone and desperate. Consumer-directed care has reduced the instances of abandonment almost to zero, she reports. "Since I have been on CDAS . . . I have more freedom to live my life as every American should--and I'm saving the government money."

With Medicaid expenses surging faster than almost every other budget line in almost every state, such savings are welcome news to policy makers. Taxpayers in Colorado have seen their share of Medicaid--matched dollar for dollar with federal funds--increase almost 33% since 2001. Another 22% jump is predicted by 2010.

Absent a tax increase here (one on the November ballot is trailing in opinion polls), the Medicaid spiral will continue squeezing all other priorities except K-12 education.

The first two years of Colorado's CDAS pilot program, by contrast, showed average monthly spending at 21% under budget ($3,925 per client allocated, $3,131 expended). While the sample is tiny, the vector is positive for once. To Medicaid administrators like Aggie Berens and Viki Manley, that brings unaccustomed praise--and proud smiles. To legislators like Speaker Pro Tem Cheri Jahn (D., Arvada), sponsor of this year's bill to expand CDAS statewide, it spells progress.

"People deserve choices," Rep. Jahn says. With those choices comes not only greater dignity for the individual, but also better incentives for the system as a whole. Half of any monthly savings a CDAS client realizes go into a personal fund for approved purchases to further his or her independence. Linda Storey used part of her fund to buy voice-activated phones for her bedside and wheelchair. Philip Rangel of Greeley, another participant in the pilot, bought specialized art equipment with his savings. Though quadriplegic and confined to a ventilator for half his 37 years, he paints by mouth.

Julie Reiskin of Denver is executive director of the Colorado Cross-Disabilities Coalition. After lobbying for the 1996 bill that authorized CDAS and then pushing for the long-delayed federal waiver, she is now herself a pilot client. Raising taxes or reducing services and caseload are not the only alternatives for Medicaid as often assumed, Ms. Reiskin argues. "Instead we should spend more wisely with the existing dollars, as this program does."

Why are the patient-empowerment initiatives in Medicaid so few and so small thus far? Ms. Reiskin blames paternalistic societal attitudes and the economic self-interest of providers. Linda Gorman of the Independence Institute, a Colorado think tank, seconds that. Health care reform boils down to two choices, she told me--"either oppress patients with big-government programs, or liberate them with these consumer-directed experiments."

This means that a success story like CDAS--good for clients and budgets alike--constitutes "a real pain" for the HillaryCare crowd, Ms. Gorman said. Policy analyst James Frogue of the Gingrich Group agreed. "This is a winner for everyone except the left-wing ideologues who want a Canadian-style single-payer system regardless of its ill effects on patients."

Big-brother care took a hit from the Supreme Court of Canada itself this summer. And it is losing ground in several U.S. states as innovative governors push for patient power. South Carolina is in the forefront with Gov. Mark Sanford's proposal to give his state's 850,000 Medicaid clients' personal accounts from which to buy their own health insurance and pay for incidentals. Florida's Jeb Bush, Vermont's Jim Douglas and Arkansas's Mike Huckabee are also driving for reform.

It took Republican Gov. Bill Owens replacing Democrat Gov. Roy Romer in 1999 to kick the Colorado Medicaid experiment into gear. Gov. Owens has played tough defense against single-payer proposals, vetoing two prescription drug bills this year, while going on offense for the market-minded CDAS pilot.

The goal is clear, according to Matt Dunn, a young dentist named by Gov. Owens to the Medicaid oversight board. First give patients freedom to choose. Then align incentives so the choices go less and less toward a demeaning, inefficient government delivery model. "Socialized medicine benefits no one," Mr. Dunn insists with Colorado candor. To which Linda Storey would say alleluia, amen.