As Miami-Dade faces budget crunch, fight over healthcare heads for a showdown
At issue is a proposal by Mayor Daniella Levine Cava to drop the county's longtime healthcare provider, AvMed, for a national competitor, Aetna — something the mayor claims would save the county about $40 million as it faces a major budget crunch. The fight to win the county's healthcare contract has gotten messy enough that commissioners are holding a special meeting Wednesday dedicated solely to picking a winner.
AvMed, based in Doral, argues Levine Cava is rushing the effort ahead of a fall open-enrollment period that's bound to be chaotic if a new provider takes over. AvMed also points to high customer-service rankings as a selling point — particularly with management based in the Miami area.
But Levine Cava points to a pair of consultant studies showing that Aetna's national purchasing power would bring Miami-Dade cheaper healthcare costs in a year of budget strains.
AvMed, based in Doral, and Aetna, a Connecticut-based subsidiary of the CVS drugstore chain, each want to manage the crucial billing process — including reimbursement rates for healthcare providers.
Unions representing county employees are divided. The police union backs keeping AvMed, while the transit union wants to switch to Aetna.
In a recent Miami Herald op-ed, Levine Cava said Aetna will bring both savings and expanded options for county employees. 'Partnering with Aetna means not only financial savings for the county but better healthcare access and quality for our workforce,' she wrote.
AvMed, which has contracts across Florida, rejects the notion that Aetna will be cheaper for Miami-Dade and points to a recent J.D. Power ranking giving it the top scores for customer service in Florida. AvMed first won the county contract in 2016 and is encouraging Miami-Dade to stick with a healthcare company that has proven itself.
'By continuing its partnership with AvMed, Miami-Dade County can ensure uninterrupted access to the #1 ranked health plan in Florida,' the company said in a statement, referencing the J.D. Power ranking.
If the county switches providers, Aetna would earn administrative fees from Miami-Dade worth about $15 million a year. AvMed's fees are lower, at $10 million.
But the fight comes over the much larger county expense involved in the agreement: what Miami-Dade pays providers for medical care and supplies, including prescriptions.
Like most large governments, Miami-Dade uses its own cash to pay medical expenses, rather than relying on an insurance company to reimburse providers. Under the 'self-insured' model, Miami-Dade can save money if reimbursement rates drop for doctors, pharmacies and other providers used by county employees. Miami-Dade's medical expenses currently hover around $600 million a year, according to county estimates.
The county's insurance company negotiates the rates behind those expenses, and Aetna claims it can lower Miami-Dade's healthcare costs over the life of the seven-year contract. Two healthcare consultants hired by Miami-Dade back up that contention, estimating yearly savings of around $40 million when calculating how much the county would pay under each competitor's reimbursement rates.
Commissioners have devoted a rare special meeting to deciding the contract award, placing board members in the position of refereeing between competing claims in the complicated realm of healthcare finances and reimbursement rates.
'I'm not for Aetna. I'm not for AvMed,' Commissioner Roberto Gonzalez said during a July 16 discussion of the healthcare contract. 'I'm for whatever is best for the employees of Miami-Dade County.'
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