Would home health monopoly be too much Turnaround Agenda?

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Republican Gov. Bruce Rauner is about as pro-business as Republicans come, right?

He’s got to be one of those free-market libertarian types, right?

Would you be surprised to learn his health care department is considering giving a multi-million-dollar contract to one company to provide products thousands of Illinoisans need?

This is a little story about the nitty-gritty dealings of government that affect real people and the real people who run businesses.

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Matt Peterson is the president of Home Products Healthcare, which provides incontinence products for adults and children on Medicaid. He’s also part of an association of businesses that provides home health products throughout the Midwest.

He called recently because he’s concerned about a contract the state might grant for incontinence products. Plenty of people have bladder control issues at one time or another in their lives due to medical conditions, medication or disabilities. People who are on Medicaid deserve good products and a good choice of accessible products, too.

Administrators in Rauner’s Department of Healthcare and Family Services have issued a request for proposals, or RFP, for companies that would be capable of being the sole provider of incontinence products to state Medicaid recipients.

Translated, that means the Rauner administration could pick a winner and create scores of losers among companies that sell incontinence products. It could create a monopoly for bladder control products among Illinois Medicaid recipients.

Why? To save money and boost quality control, said John Hoffman, spokesman for the Illinois Department of Healthcare and Family Services.

Peterson said when he and others learned about the move toward considering a sole provider of the products, they met with department Director Felicia Norwood and others, who explained they wanted to save $5 million a year from what the state has been paying. Understanding the state’s debt and budget crisis, Peterson said he and others in the industry got together, crunched numbers and told department chiefs they believed they could work together to cut prices by closer to $5.4 million year.

Why they weren’t doing that all along is another great question, but Peterson said state bureaucrats believe they have a quality issue that causes some people to cycle through more diapers, pads and other products each month than is considered reasonable.

Once the department heard about providers’ ability to tighten up pricing and quantities, Peterson said they thought they had a deal, but some time in the last few weeks, the department decided not to pull the RFP. Late last week, Peterson and others requested any documents related to the RFP and were given a copy of a letter from Binson’s Hospital Supplies, Inc. that argues for a sole-source provider, makes clear it intends to submit a bid and includes a spreadsheet listing what it bid and won for the business in Indiana as the sole provider.

Binson’s Executive Vice President and COO Ken Fasse did not return a call for comment, but Peterson said he believes Binson’s letter taints the process. I’d say it taints the process further.

“It’s almost like they’re saying here’s what we’ll bid. They are putting out rates they’ve been awarded in another state, which could give them an unfair advantage,” Peterson said. “It tells others, ‘I can’t bid. Look at those numbers,’ or ‘I’ve got to come in lower.’ ”

With 30,000 people a month needing the products, Peterson said he worries whether people will get the quality, choice and convenience they need with one provider. The state has more than 400 product providers now, he said.

How do you know if one provider is “living up to standard if you’ve decimated the industry and you have nothing to compare it to?”

Peterson wants the department to negotiate with all the providers to see if they can find a path that keeps most of them in business, preserves patient choice and quality and saves the state –and taxpayers — money.

A monopoly isn’t good in cable TV. It’s even worse in health care, he contended.

If providers could agree to $5.4 million in savings, then clearly some shaking up in this area was long overdue, but is a monopoly a little too much turnaround agenda?

Hoffman, state healthcare spokesman, said the department still could abandon the sole provider option after receiving bids.

“The department initiated this process to achieve costs savings and better quality control, which are especially crucial to taxpayers in this budget climate,” he said. “The process is ongoing, and HFS continues to pursue all available options to find the best way to achieve these goals.”

Madeleine Doubek is publisher of Reboot Illinois.

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