Oklahoma Privatization

John Thompson: Oklahoma’s Disastrous Efforts to Privatize Everything

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John Thompson is a historian and retired teacher in Oklahoma. He keeps us abreast of what is happening in his home state.

He writes:

Now that Oklahoma voters rejected Gov. Kevin Stitt’s recommendations and chose to accept hundreds of millions of dollars a year of Medicaid Expansion funds, policy-makers must ask what could go wrong with Stitt’s current effort to privatize up to $2 billion in Oklahoma Medicaid services. Nondoc reports that this week:

Amid an air of confusion over its own powers and responsibilities, the Oklahoma Health Care Authority Board voted this morning to authorize financial expenditures for contracting with managed care organizations, controversial entities that take a portion of public Medicaid funding for attempting to improve care coordination, increase patient compliance and decrease overall program costs.

Several of the “five major health care associations” that opposed Stitt’s plan “referenced Oklahoma’s past managed Medicaid effort from the 1990s, which was ended owing to many of the same concerns opponents are voicing now.”

Since the Oklahoma governor has repeatedly pushed to allow private entities to innovate in terms of fighting the Covid pandemic, the answer might be found in more recent history. For instance, last spring, Oklahoma Health Department contracted with a piano bar owner to purchase about $2 million worth of N95 masks from China!

(I wonder if Stitt refused to listen to public health experts and close bars when infections super-surged for fear that that would have been undermined such innovations…)

Recent issues of The Frontier help evaluate the effectiveness of Stitt-era innovations. The state is now trying to return $2 million of stockpile of the malaria drug, hydroxychloroquine. Stitt ordered the purchase after former President Donald Trump praised that untested treatment.

The Frontier and ProPublica also reported on problems with CARES Act expenditures, and concluded, “The scope of those problems is clearly visible in Oklahoma, which tied for the third-highest number of hospital closures in the country in the nine years before the pandemic.” They found that, “One hospital used more than $1 million in federal aid to pay off its years-old debt to a management company that left before Oklahoma’s first coronavirus case was diagnosed.

On the other hand, “Three Oklahoma hospitals that were purchased last year after filing for bankruptcy were unable to access more than $6 million in funds deposited by the Department of Health and Human Services, the agency in charge of the rollout for health care providers.”

The Frontier also reported on Payroll Protection Program (PPP) money that went to Oklahoma churches. It showed that “between $90.2 million and $153.9 million went to churches in Oklahoma;” for instance, the “Edmond-based LiveChurch.TV, received between $5 million and $10 million.”

The Tulsa World also reported on Stitt’s sending $10 million in federal COVID-19 relief money  to help private school students. Those grants ranged up to $6,500 per family.

Speaking of school privatization, this week the Epic Charter Schools board “accepted the resignation of 11-year member Mike Cantrell.” This occurred as the State Department of Education continued efforts to “recoup” $11.2 million of inappropriately spent state money. Cantrell still claims, “They don’t have a right to look at a private company’s records.” He calls the auditing process a “sham,” and speculated that maybe the auditor should be impeached.

Okay, this history of privatization by Stitt and his and Trump’s supporters hasn’t turned out well, but maybe we need more innovation, such as contracting with a bar owner to obtain PPE. How did that experiment turn out?

The same day as Stitt defeated OHCA board members who opposed his managed care of Medicaid policy, the Oklahoman reported:

Health officials got fewer than 10,000 masks from PPE Supplies and only $300,000 of the deposit back, according to the breach of contract lawsuit.

The Health Department is seeking the rest of its money back — $1.825 million, plus interest. It also is seeking punitive damages for “misconduct.”Whether its ideology-driven use of Covid funds to promote private schools, or using $25 million CARES Act funds for old-fashioned pork barrel politics, like defying medical experts by moving the public health lab from Oklahoma City to his alma mater, Oklahoma State University, Stitt’s schemes are destructive and wasteful. We can laugh at his more absurd misuse of federal money, but if he gets away with imposing managed care for Medicaid, the damage will be devastating. 

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