| June 13, 2011

Command performance

Last week the Oklahoma Health Care Authority (OHCA) Board voted unanimously to raise the salary of director Mike Fogarty more than $18,000 a year to $152,000 and also gave him a “performance” bonus of $20,000 (with another potential $20,000 bonus available in 2012). With a new salary of $5,000 a year more than the governor earns, and performance bonuses potentially up to $40,000, the outrage from taxpayers is completely justified. Let’s review some of the performance “achievements” during Fogarty’s 12 years at OHCA under the board’s direction.

According to the Oklahoma Health Care Authority’s FY-2010 annual report:

• In FY-2005 there were nearly 630,000 Medicaid enrollees and total (state and federal) expenditures of $2.81 billion. By FY-2010, the number of Medicaid enrollees had ballooned to 881,220 (about 24 percent of the state’s population) and expenditures had skyrocketed to $4.33 billion—an increase of 54 percent in just five years
• In Federal Fiscal Year 2000, total (state and federal) Medicaid spending in Oklahoma was $1.64 billion. But by Federal Fiscal Year 2010, total Medicaid spending in Oklahoma was $4.35 billion—a 165 percent increase in just 10 years
• For Federal Fiscal Year 2000, total state share/appropriations for Medicaid were $435.9 million, and for Federal Fiscal Year 2010, total state share/appropriations for Medicaid were $1.1 billion—a 169 percent increase in just 10 years
• In 2010, approximately 562,000 children under the age of 21 were covered by Medicaid
• Approximately 67 percent of all Oklahoma children under the age of five have been covered by Medicaid at some point in their lives.
• Of Oklahoma’s 77 counties, 38 counties have 25 percent or more of the population enrolled in Medicaid and 18 counties have 30 percent or more of the population enrolled in Medicaid, and one county has 43 percent of its population on Medicaid.

With these welfare-expanding outcomes, what “performance” warranted a total income increase of up to a $58,000 over the next two years? Apparently, the goal of OHCA is to have as many Oklahomans enrolled in Medicaid as possible, but that’s the sort of “performance” one would expect with command-and-control liberals running the agency. But now that Oklahoma’s center-right majority has successfully elected a conservative governor and state legislature, is this the sort of “success” we should celebrate and reward? What Oklahoma family, whose hard-earned income will be taxed to pay for these increases, will receive a $58,000 total income increase over the next two years?

OCPA has recommended several reforms that Fogarty and the board should consider (reforms that are all the more important considering what Obamacare is about to do to the Oklahoma state budget):

• Decrease dependence and utilization of this welfare program that is growing more than 165 percent every decade
• Lead an unrelenting effort to obtain waivers from the federal government that would allow Oklahoma to implement significant reforms to the Medicaid program
• Continue to apply for federal approval to convert Medicaid into a block grant program, which would give the state more control over how program dollars are spent
• Push for an extremely low member cost-sharing plan of $10 a month
• Allow the more than 13,000 current individual Insure Oklahoma members to obtain coverage through the private market rather than being forced onto Medicaid

Why aren’t Director Fogarty and the OHCA board advocating for and implementing these sorts of reforms? Their refusal to do so illustrates a common, longstanding accountability problem. In many states the governor appoints the Medicaid director. Not so in Oklahoma, with its dysfunctional executive branch. As OCPA fellow Andrew Spiropoulos wrote nine years ago, “we must amend the constitution to establish a cabinet system of government in which the governor appoints the heads of the major departments and these officials report directly to and are responsible to the governor. And to the extent to which executive power remains in boards and commissions, the governor must have the power to appoint the majority, and eventually all, of the members of these bodies.” Because Gov. Fallin has not yet had the opportunity to appoint anyone to the board, she could do nothing to stop this decision.

With an annual budget of more than $4.3 billion, reform of the Health Care Authority board and the Medicaid program should be a top priority for lawmakers at the beginning of the 2012 legislative session. All members of the board should be appointed by the governor (who is accountable to voters) with the consent of the Senate, and appointments should serve at the pleasure of the governor. The governor should have the authority to appoint the director of the Health Care Authority, just as is the case with the director of the Office of State Finance, the Secretary of State, and other crucial state positions.

Rest assured that the board’s action last week will not be forgotten.

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