So how is the new privatized Medicaid program — known as KanCare — working for the state?

According to reports released this week, it isn’t working all that well for the three companies that have contracted with the state to run the KanCare system. The report indicated that the three companies — Sunflower Health Plan, United HealthCare and Amerigroup — lost a total of $52.5 million on their KanCare services last year. But look on the bright side; that’s less than half of the $116 million they lost in 2013, the first year for KanCare.

Company officials reportedly expected to lose money in the first years of KanCare, when the system was getting up and running, but how much were they expecting to lose and how long will those losses be acceptable? United HealthCare recorded the smallest loss last year, $1.5 million, and a company official said this week “we actually feel really good about the progress we’re making.” However he declined to predict the company would actually turn a profit this year.

All three companies are in the third year of their three-year contracts with the state. Will they be willing to renew contracts that are losing money?

There was a lot of concern about the services that KanCare clients would receive from the privatized system, but there hasn’t been as much in the news about that recently. Maybe that’s because KanCare has gone for more than a year without an inspector general, the person charged with investigating and protecting against fraud, waste and other misconduct in the privatized system. State officials say they have been unable to fill the position at the salary that’s being offered.

How about hospitals in the state? They have been vocal in their support of finding a way to accept federal Medicaid funding to expand KanCare and serve more clients. That issue may or may not be among those considered in the current wrap-up session.

In the meantime, among Gov. Brownback’s recent budget-balancing proposals is one that would require hospitals to pay an additional $19 million in fees in the next fiscal year to help sustain the KanCare program. The state uses those fees to help attract federal money that goes back to hospitals to pay for care for KanCare patients. Does that mean the hospitals essentially are paying themselves to provide that care? At the same time, the governor is seeking to reduce the state’s Medicaid spending by almost $33 million through the end of June 2016. Will that result in greater losses for the KanCare contractors?

One of the governor’s stated goals for the privatized KanCare system was to reduce the state’s Medicaid costs. That may be happening, but if the state is reducing its own costs by reducing patient services or forcing additional financial burdens on hospitals and insurance carriers, this system seems neither acceptable or sustainable.