Contracting government functions has snags

Source: Edward Lotterman, Bismarck Tribune, August 30, 2015

…. A tempest in the local teapot of my home state of Minnesota over contracting out Medicaid administration illustrates that clearly. HMOs have administered a large fraction of the caseload for Medicaid and for Minnesota’s own program for people with low incomes but above the Medicaid cut-off levels. Now a new, more competitive bidding process has caused one such HMO to be cut out of the business entirely for 2016. The upshot is a political and legal morass that illustrates the inherent challenges when a government contracts with the private sector to provide public goods like military hardware or transportation infrastructure in addition to health care administration. …