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Tom Watkins
Tom Watkins

March Madness- Scoring With 298

March 31, 2017 

The 298 ball is in the Michigan’s legislature’s court. As the legislature begins debate on the topic they may want to be reminded that for every complex problem there are simple, but wrong, solutions.  Jay Greene, the talented healthcare journalist for Crain’s Detroit Business has done an exceptional job covering this complex issue.  He defines the issue this way: “It’s whether to integrate financing of the $8.9 billion (private/profit) Medicaid physical health managed care system with the $2.6 billion Medicaid (public) mental health system.” 

Believe it or not, there is a sensible way forward. To enhance and integrate behavioral and physical health care and maximize taxpayer’s dollars, the legislature should demand the focus be firmly placed on service, care and people; NOT on power, control, politics and ideology.

The 298 Workgroup, established by Lt. Governor Brian Calley and Nick Lyon, Director of the Michigan Department of Human Service, has been meeting for over a year. They have recently submitted their recommendations to the Legislative leadership.

Lieutenant Governor Brian Calley

You can find the Final Report of the 298 Facilitation Workgroup as submitted to the Michigan Legislature here:

The Snyder Administration created the 298 hot potato when they proposed boilerplate language (Section 298) in the FY 2016/17 Michigan Department of Health and Human Services budget bill, proposing to transfer $2.6 billion a year—now under the governance of the public mental health system—to the profit- making insurance companies, innocuously enough, referred to as “Health Plans.” 


Advocates, Consumers, Parents React With Anger and Sense of Betrayal

To say consumers, parents, advocates and healthcare providers went ballistic is an understatement. The change took everyone by surprise (department officials were denying rumors of such a move only days before the offensive language appeared in Governor Snyder’s budget).  As one old Lansing hand said, “This shift in state policy is one of the most sloppy I have witnessed in multiple decades under the Capitol Dome.” He went on to say, “It was bad ‘P’- Bad Policy, Process, and Politics.”

The Snyder Administration, especially Lt. Governor Calley, deserves credit for realizing the challenges of this massive change to truly integrate care, creating the 298 Workgroup to help “think it through.”  Over 100 citizens representing all perspectives on this question did just that and the legislature should embrace their recommendations.  

The intent surrounding this massive shift in public policy is laudable: To better serve the behavioral health (mental health and substance use) and the physical health care needs of some of Michigan’s low-income and most vulnerable citizens while maximizing the use of limited taxpayers’ dollars. To truly integrate care is a worthy and laudable goal. With this explanation of motherhood and apple pie, who would oppose such a move? 

The problem: It is not as simple as that.  First, the Health Plans administrative overhead, or cost to manage their current book of business, is twice as expensive as the existing public community mental health system.  The Center for Healthcare Research and Innovation recently released a study underscoring the cost-effectiveness of Michigan’s public behavioral health system. 

When compared against Medicaid rate increases in the rest of the country, Michigan’s public mental health system has saved  over $5 billion dollars ($5,273,089,686) since 1998, when this public system became the managed care organization for the state’s Medicaid mental health, intellectual/developmental disability, and substance use disorder services benefit.  

The study shows how Michigan’s public Mental Health and Substance Use system delivers exceptional benefits while using sound and creative methods to keep costs significantly below national Medicaid per enrollee costs and those of commercial Health Plans.  These methods include:

  • Very low administrative costs 
  • Comprehensive and closely aligned provider networks
  • Applying individualized person-centered planning approaches to care
  • Addressing a range of social determinants of health through a whole-person orientation by working closely with a range of healthcare and human services in the consumer’s home community
  • Weaving the services offered by the CMH and provider network with the care that families and friends provide
  • Using other consumers as peer supports and advocates on behalf of the persons served
  • Using an array of both traditional (psychiatric care, psychotherapy, case management) and nontraditional services (housing supports, employment supports, home-based services).

Second, as President Trump recently admitted, “Nobody knew health care could be so complicated.”  The President continued, “Now, I have to tell you, it’s an unbelievably complex subject.”  The President is both right and correct. Thinking that simply giving the Health Plans $2.6 billion dollars that have been competently managed by the public mental health system is a path to “integrated care” is magical thinking.  It is a bit more complicated than that.

Transferring $2.6 billion of public funding to private and profit-making insurance companies does not “integrate care,” it integrates taxpayer resources (funding) targeted to serve vulnerable people under private, often publicly-traded, stockholder or a family business control.  True integration begins at the service delivery level, not at administrative and funding levels. These companies’ business model is profit, not service. This is not a vilification- simply a statement of fact. 

Third, people who use these services and the families that support persons with disabilities don’t want the insurance companies to manage their benefit, and fear what the change will mean to them. When consumers, advocates and providers of community-based, publicly governed services for persons with serious mental illness, children with emotional disorders, persons with intellectual and developmental disabilities and those with substance use disorders originally heard about the 298, they marched on the State Capitol en masse! 

Change That Produces Progress Is Needed 

Does this mean the consumers, advocates, and existing providers of services believe the existing system of care is perfect?  No, far from it.  It means changes are needed to improve outcomes, reduce administrative levels and costs not directed at services and support, and should enhance governance that truly is about being a system of care that is:

     * Consumer and Community Focused

     * Data Driven and

     * Evidence Based 

The 298 Workgroup sent their recommendations and pilot projects to the legislature for consideration, and for assurance that we are adding value and making a difference in the lives of persons with significant health and behavioral healthcare needs in Michigan.  The process to date has pitted advocates, consumers, family members, the Community Mental Health System and its providers’ network against a perceived attack by the Health Plans to “capture and control” billions of taxpayer dollars.

The Health Plans have at times been inappropriately vilified during this battle of control. This is understandable as the community-based system of care that was created over 50 years ago by President Kennedy is fighting for its life against a hostile takeover; that rightly or wrongly, advocates see as about a struggle over money and profits, not care and support.  The Health Plans clearly have an ideological leg-up and a sympathetic ear with some legislators while advocates, family members, consumers and providers hope their voices will be heard at last.

 Jay Greene, of Crain’s Detroit Business, recently reported that some Michigan lawmakers question the “lack of health plan involvement” and say they will push back on a recommendation that would leave managed-care companies out of a proposed reform plan to integrate Medicaid physical and mental health care funding. 

The Health Plans were hardly “left out of the process”. Yet, it is clear, like any deliberative process, (not unlike Christmas morning), no one gets everything that they originally asked for.  The Health Plans’ big grab was to acquire $2.6 billion in public money. They were surprised by the loud, public, and visceral reaction they received from parents, family members, advocates, and providers.   

When Elephants Fight

We are currently in a “win-lose” power struggle that will not maximize limited taxpayer resources or enhance care and outcomes to vulnerable people.  There is an African Swahili proverb, “Wapiganapo tembo nyasi huumia” – “when elephants fight the grass gets hurt.”  Treating the $2.6 billion dollar, publicly-financed and controlled system of care as a wishbone, where one party walks away the winner will hurt the very people are all charged with serving.

The choice does not need to boil down to an “either/or.” 

An opportunity exists to turn a “win-lose” power struggle into a win-win national model of person-centered, integrated care if we allow reason and not ideology to drive our decisions. 

I envision a system where: 

  1. We keep the public oversight of public dollars. Following the 298 Workgroup recommendations to retain the public management of the publicly sponsored behavioral health care system is essential. 
  2. Empower consumers and advocates by giving them a greater voice in governance of the system of care.
  3. Stop the debate over the number and structure of the PIHP’s, CMH’s, and Health Plans, and demand a plan where structures and costs are flattened with “saving” being redirected to service- not profit. 
  4. Stop making the Health Plans the enemy (and vice-versa), and engage each other in ways that can enhance and improve the outcomes for the people we serve. There is nothing wrong with making a reasonable “profit” while enhancing the efficiency and effectiveness that benefits consumers and taxpayers. What is wrong is a model of care that is predicated on limiting or denying care to boost the bottom line. When using public dollars, the ROI – return on investment – should be an investment in the public good NOT profits for shareholders and owners.
  5. Set clear dashboard metrics that spell out actual expected health-care integration outcomes between the physical and behavioral health systems at the service level that must be met. These metrics should have clear “carrots and sticks” tied to them.
  6. The Michigan Department of Health and Human Services should be both the funder and referee that calls “fouls” and holds the Health Plans and Community Mental Health system of care accountable for results.
  7. Hire an independent evaluator who captures how the sides “come together” to integrate care and enhance outcomes for consumers and taxpayers.
  8. Set a date in the future, say 2020, where the integrated model of care is evaluated against established metrics. Use this data and successes to determine how the system of care should be rebid and continue the push for care integration at the service level to maximize the benefit tax dollars produce for quality results for Michigan’s most vulnerable citizens.

A Third Way Forward

The recommendations before the legislators should not be viewed through a single prism. Opportunity exists to mix and match, not unlike menu options – a chance to choose what is best for the people we serve. Vision, values, and guiding principles should be agreed to in advance as part of the 298 Workgroup roadmap. 

Let’s work together to reimagine and reinvent a better tomorrow of integrated care for persons with disabilities, mental illness, and substance use disorders. Nothing we do should diminish the care, support and opportunities for our family members with an illness or disability. Everything we do should create opportunities and a life of dignity and self-determination for our fellow citizens. 

With change in the air around the entire Medicaid program and the Affordable Care Act clearly, we cannot continue to behave as though nothing has changed in health care when everything is changing around us. This is an opportunity to put into action “people over programs and politics”.  

Legislative leaders and the entire legislature, the 298 ball is in your court.  I encourage you to proceed as though your actions will impact someone’s mother, father, sister, brother or son or daughter– because ultimately it will. 

Let’s work together to assure the 298 March Madness serves our citizen well.

Tom Watkins  is president and CEO of the Detroit Wayne Mental Health Authority. He served the citizens of Michigan as state mental health director and state superintendent of schools. He is known for his creative and innovative thinking and working across the political aisle to produce progress for the citizens of Michigan. He can be emailed at:, or followed on twitter at:@tdwatkins88


March 30, 2017 · Filed under Tom Watkins



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