If CCNC saves so much money, why is NC Medicaid so expensive?

Published August 24, 2015

by Brian Balfour, Civitas Review online, August 21, 2015.

In a report published this week by the Office of State Auditor, Community Care of North Carolina (CCNC) was found to have saved the state's Medicaid program millions of dollars.

During a 10-year period between 2003 and 2012, Community Care of North Carolina, or CCNC, helped keep patients out of the hospital and saved about $78 per user per quarter, according to the report. That analysis comes as CCNC's future as a state contractor is in question because lawmakers are getting ready to remake the health insurance system that cares for 1.8 million poor and disabled residents.


Community Care of North Carolina helps coordinate the care all of those providers are giving to patients. The company helps ensure that patients keep their appointments, take their medications and aren't given conflicting treatment plans by different doctors.

In essence, CCNC is providing something akin to managed care to 1.4 million patients, or roughly 14 percent of North Carolina's population.

CCNC is fighting to remain a key player in the ongoing debate over how to reform NC's Medicaid program.

Past reports have credited CCNC with significant savings, but many difficult questions remain unanswered about the true value of CCNC.

Some critics have slammed the reports claiming that CCNC saves Medicaid billions of dollars, saying the reports ignore the overwhelming amount of data that contradicts their claims.

Indeed, this 2012 Civitas article called out CCNC's effectiveness with some tough questions:

If CCNC is producing such significant cost savings for Medicaid expenses, why are key categories of Medicaid expenses so much higher here than for North Carolina’s Southeastern neighbors? The group with the highest rate of CCNC enrollment is children, yet North Carolina’s average Medicaid expenditure for children is 15th highest in the nation and a whopping 27 percent higher than the average of our Southeastern neighbors. Furthermore, the other eligibility group to have CCNC oversight the longest is the adult population, of which North Carolina’s Medicaid expenses are 12th highest in the nation and 16 percent higher than regional states.


August 24, 2015 at 11:05 am
Richard L Bunce says:

Savings compared to the typical ineffective and wasteful government bureaucracy... not any meaningful alternative.

August 25, 2015 at 9:42 am
Paul Mahoney says:

Brian, *still* trotting out the same tired arguments disproven multiple times since 2012? You know you can't compare state costs without adjusting for vast differences in how state programs work. NC's per-person costs are higher than some surrounding states because NC covers more services, more health conditions and more populations, e.g., the "medically needy" population. State legislators have decided this is preferable to leaving thousands of our citizens no care option but the emergency room -- an expensive setting for care that might not show up in the Medicaid numbers for other states, but still costs a ton of money and impacts employer-sponsored plans that end up picking up the costs of those who cannot pay.

Should NC cover fewer people and/or fewer services? That's a legitimate subject for public debate, but to imply that these costs will simply "go away" under corporate managed care is nonsense. NC's best option is to increase the efficiency of the care that is delivered, and that's what CCNC has done for many years. The collective weight of detailed, independent studies and peer-reviewed research that document CCNC's value is more than convincing to any remotely open-minded person. You might think about applying some of your skepticism to claims that a shift to corporate managed care is such a panacea. Experience in Louisiana, Florida, Kentucky and a host of other states suggests otherwise.

August 25, 2015 at 10:57 am
Richard L Bunce says:

"State legislators have decided this is preferable to leaving thousands of our citizens no care option but the emergency room."

Wait, I thought our State Legislature was a bunch of heartless bastards? Increased the efficiency against the typical government bureaucracy sure... doesn't mean it cannot be done better and have reimbursement rates that do not force many providers to limit their Medicaid patient load or not see them all together.

Let CCNC compete with other healthcare organizations at say the County level and see who can deliver the best value.

August 25, 2015 at 5:43 pm
Paul Mahoney says:

If you're suggesting that MCOs would RAISE physician rates from what they are now, that's much at odds with experience in other states. It's is virtually impossible for an MCO to simultaneously: 1) produce sustained cost reductions; 2) pay an administrative system (claims, etc); 3)build in a profit margin; and 4) raise provider fees. Show me a state where that's happened.

August 26, 2015 at 10:22 am
Richard L Bunce says:

Why does there have to be another State Medicaid program where that has happened? With competition in each County we can find out if it can happen. Significant waste, fraud, and abuse in Medicaid (and all government healthcare payment systems... not to be confused with insurance) that can be eliminated. More focused care to eliminate inefficiencies. You think CCNC is the best value system... no worries for you then with a little competition.

August 24, 2015 at 2:57 pm
Frank Burns says:

Working for the non profits is a sweet deal. Give yourself bigger raises and benefits and just call them "cost".

August 25, 2015 at 12:00 pm
Paul Mahoney says:

Gee "Frank," you mean like the 20% overhead that managed care organizations build into their rates? Take a look at Florida story on NCSPIN (http://www.ncspin.com/florida-mcos-demanding-more-money-creating-budget-headaches/) to see how that's working out.

August 25, 2015 at 5:48 pm
Richard L Bunce says:

So everybody at CNCC works for no compensation... good to know.

August 26, 2015 at 7:37 am
Paul Mahoney says:

No compensation? No. But CCNC operates at a FAR lower administrative cost than insurance corporations.

August 26, 2015 at 3:34 pm
Richard L Bunce says:

Total costs? Including all the government functions that allow CNCC to function? Again, let CNCC compete and if as you claim it's costs and effectiveness produce great value the issue will be resolved.