Christie’s Bottom-Line Approach to Healthcare Has Paid Off — Sometimes

Andrew Kitchenman | April 27, 2015 | Health Care
Governor earns kudos for Medicaid expansion, managed care, but many policies have been roundly criticized

Credit: Governor's Office/Tim Larsen
Gov. Chris Christie
Gov. Chris Christie may not have intended for healthcare to be at the top of his public-policy agenda, but after five momentous years it’s pretty close to the policy pinnacle.

Christie’s focus on budget savings have led to two major health policies that have garnered praise from both policy analysts and advocates. The first is agreeing to the Medicaid expansion included in the Affordable Care Act — a law he’s denounced. The second is pursuing a five-year comprehensive Medicaid waiver that’s radically changing services for seniors, disabled people, and low-income residents.

Many of Christie’s other positions have been criticized, including his multiple vetoes of funding for family-planning clinics; strict regulation of the medical marijuana program; and the loss of federal funding to promote the ACA health insurance marketplace. He also came under fire for vetoing two bills would have established a state-operated insurance exchange rather than relying a federally run marketplace.

And major healthcare issues remain unresolved, including whether the waiver will improve services as they are shifted from nursing homes and other institutions to home and community settings. Another issue: how the growth of for-profit hospitals will affect the quality of healthcare in the state.

Analyzing how Christie’s approach to healthcare would translate to a national stage is further complicated by the big difference between making state policy — which must respond to national policies — and actually determining the national framework.

Joel Cantor, director of Rutgers Center for Health Policy, said the Medicaid eligibility expansion was Christie’s most important healthcare decision.

“It’s good for the healthcare system. It’s good for the people who are now eligible. It’s good for the economy,” Cantor said.

While Christie was the eighth Republican governor to opt for the expansion, his potential presidential rival Wisconsin Gov. Scott Walker turned it down.

Christie “didn’t have to do it and he’s getting flack from his Republican colleagues in the more conservative parts of the country,” said Raymond J. Castro, senior policy analyst for New Jersey Policy Perspective, a liberal think tank. “Of course, it was a huge success in terms of enrollment and dollars coming into the state.”

The expansion has added 420,000 people to Medicaid and brought an estimated $181 million in savings to the state budget in the current fiscal year. It also allowed Christie to propose a $148 million cut in charity care to hospitals for the budget year starting in July. That’s because hospitals are treating fewer uninsured patients due to the expansion.

With all of these benefits, Christie’s decision was “a given,” said Renee Steinhagen, executive director of the New Jersey Appleseed Public Interest Law Project.

The results of Christie’s decisions regarding another major piece of the ACA — the marketplace — are mixed, according to analysts.

Disagreements between the administration and federal officials led to the state losing a $7.67 million grant that could have been used to support the marketplace.

But another Christie move that was heavily criticized by healthcare advocates — his decision to veto two different bills that would have established a state-operated insurance exchange rather than relying the federally run marketplace — may have allowed the state to avoid a major problem.

That’s because a state marketplace would have likely relied on a planned social-service computer system, the Consolidated Assistance Support System (CASS), which was later scratched after the contractor failed to deliver it.

New Jersey could have wound up in the same position as Maryland, Massachusetts, and Oregon — all states whose governors promoted state exchanges but which struggled to enroll residents after they had problems with their computer systems.

But another factor may have New Jersey regretting its reliance on the federal marketplace. The U.S. Supreme Court could rule in June that federal tax credits allowing residents to purchase marketplace insurance aren’t valid, which could mean roughly 200,000 residents losing their insurance. Subsidies for those who bought insurance through state-operated insurance exchanges aren’t in question in the case before the court.

And the botched CASS project continues to be a headache, with legislators pushing for a long-term solution to better coordinate processing Medicaid applications.

[related]Along with the Medicaid waiver, Christie’s desire to seek savings through healthcare benefited another area, according to Castro. Since Medicaid makes up a large portion of the state budget, Castro believes Christie entrusted former Health and Human Services Commissioner Jennifer Velez to pursue and shape the comprehensive Medicaid waiver, which is reshaping how New Jersey provides a broad range of healthcare services.

“Instead of cutting, why don’t you look at developing these services and delivering them in a more cost-effective way,” is Castro’s description of Christie’s approach.

State officials said in a budget hearing this week that the waiver is saving roughly $400 million per year.

But while there’s consensus that many of the waiver-initiated changes, including de-emphasizing nursing homes, are good concepts, it’s uncertain whether they will deliver improvements in quality, Castro said.

Christie has supported another Medicaid program — Medicaid-accountable care organizations — that’s expected to launch this year. It’s intended to coordinate the care for chronically ill patients who live in low-income areas.

Dr. Jeffrey Brenner, medical director of the Cooper Health System’s Urban Health Institute, said signing the law for Medicaid ACOs could rank next to the expansion as Christie’s most important healthcare decision.

“I think it vaulted the state out in front of healthcare reform early in the process,” said Brenner, who also is executive director of the Camden Coalition of Healthcare Providers, one of the groups applying to be a Medicaid ACO.

Brenner said the program sends a message to local providers that they must work together on solutions.

Christie’s also is credited with taking a personal role in advancing policies to reduce the number of overdose deaths from opioids, including signing a bill that he had earlier vetoed that provides legal immunity for those who assist overdose victims.

“I think this administration has been really progressive on these issues — it’s a huge social problem and I think they’re moving in the right direction,” Cantor said.

And Christie’s choice for health commissioner, Mary E. O’Dowd, has earned respect within the healthcare field by balancing various interest groups. She’s put her own imprint on healthcare policy, including pushing for more public consideration of end-of-life medical decision-making.

But politics have swirled around other Christie policy decisions.

Advocates for women’s health have been deeply critical of Christie’s veto of $7.5 million in funding for family planning, which led to the closure of six clinics. The state lost up to nine times as much money in federal matching funds. After years of citing the vetoes for saving money, Christie recently cited them as evidence of his pro-life beliefs.

And his administration has been criticized for putting some of the strictest medical-marijuana regulations in the country in place. Some legislators also say the regulations don’t follow the intent of the law.

Christie’s tenure has also seen the continued increase in the number of for-profit hospitals. Critics of the trend say these hospitals rely on business practices that drive up insurance premiums and undermine some services, but supporters say they keep faltering hospitals alive and that the competition they provide is beneficial.

The future of healthcare in Newark may depend on whether O’Dowd follows the recommendation of a recent report by the consulting firm Navigant, which would likely lead to the closure of Saint Michael’s Medical Center rather than its sale to for-profit Prime Healthcare of California.

And other aspects of Christie’s healthcare legacy must still be written. He faces a wave of new bills seeking to further combat overdose deaths. And he may have to decide on a bill that would provide paid sick leave to New Jersey workers.

Healthcare policy experts have different views on how Christie’s approach to healthcare would translate to the national stage.

“Even his biggest detractors would probably say that he’s a fairly pragmatic leader, so it seems to me that the decision to do Medicaid reform was a pragmatic decision,” said Brenner, referring to the expansion. “I think he’s a realist and a pragmatist, (looking to) make the best decision given the tools and the resources he has. I think at the state and local level we want leaders who can get things done and are not going to be dogmatic but are going to be pragmatists.”

Cantor said it would be purely speculative to say what Christie’s healthcare approach would be if he were president.

“Much of what states do is to respond to the framework laid out from the government — so much is reactive to the options they have because of the federal framework, and if you’re in the business of creating that framework, it’s a whole different ballgame,” Cantor said.

Christie recently dipped his toe into the national debate on healthcare policy by proposing raising the Medicare eligibility age to 69 by 2064.

Cantor said such a change is unlikely to save as much money as Christie’s similar proposal for Social Security, since it shifted much of the cost of Medicare to Medicaid and government subsidies for the private market.