Univita collapses giving Medicaid the proverbial egg on face

Don't do it, they said. It's too risky, they said.

And yet, Florida Medicaid officials went ahead and gave their business to Univita Health. All of it.

Less than a year later, Univita has collapsed and patients, providers and the medical community are left scrambling.

This is what happens when you put all of your eggs in one basket, only to have the bottom of said basket fall out. That leaves Medicaid officials with egg on their faces.

Bureaucratic heads should roll on this one, people.

I don't know what's behind the collapse of Univita, a company that, despite its reputation as an evil behemoth, seemed to be doing innovative things.

I also find it fascinating that, right up until they pulled the plug, the company was launching businesses, joining associations and sponsoring stuff.

I mean, did the corner office guys not know this was coming? I guess I can never make the big bucks because I could never imagine being in a position to keep smiling all the while knowing this was coming.

But, I digress. One Florida provider I spoke with about this debacle said it was likely that Medicaid's low reimbursement was a factor.

We've already seen this with the dreaded Medicare bid program, in which providers accepted contracts at draconian price cuts and eventually folded because they couldn't sustain their businesses at those rates.

I've never understood the equation where an increase in volume, multiplied by what is essentially a negative, is supposed to add up to a viable business model.

If there's a blessing in disguise here, it's that the Univita story will serve as a warning against similar arrangements.

Because, while big banks and big car companies are considered “too big to fail,” I don't think healthcare providers will be afforded the same protections.