Joseph Anderson, an early innovator of Arizona's Medicaid program under Gov. Bruce Babbitt, died Aug. 4 at age 76, his family confirmed.
Anderson, who played a major role in revamping and stabilizing Arizona's fledgling government health insurance program during the 1980s, died in California from complications from a fall, said his daughter, Debbie Anderson.
Funeral services are scheduled for 10 a.m. Saturday, Aug. 29, at St. Francis Xavier Catholic Church, 4715 N. Central Ave. in Phoenix. A reception will follow in the church's Anderson Hall, which is named for Anderson's parents, Novian and Martha Anderson, who were longtime St. Francis Xavier parishioners.
Anderson wasn't always in the limelight, but he was someone whose contributions to Arizona
were significant, said Robbie Sherwood, director of communications for the Arizona House of Representatives Democratic Caucus.
"His contribution to health care in Arizona can't be understated," Sherwood said. "He was kind of like his (Babbitt's) fix-it guy during the early days of Medicaid."
Anderson was working for the Arizona Department of Administration in 1984 when Babbitt tapped him to become deputy director of the Arizona Health Care Cost Containment System or AHCCCS (pronounced "access"), which is Arizona's Medicaid program. Medicaid is a government health insurance program primarily for people who are low-income or have disabilities.
Arizona in 1982 became the last state in the country to adopt a Medicaid program, and under the helm of Anderson and agency director Dr. Don Schaller, it became the first in the United States to operate a Medicaid program based on managed care principles, rather than the traditional fee-for-service model. It's a legacy that still holds true for AHCCCS: for a vast majority of members, the state pays health plans a set amount per member to manage care. Getting there was a difficult process, Babbitt recalled.
After a long struggle to get the Arizona Legislature to approve creating a Medicaid program in the state, Arizona hired an outside company to run the program, Babbitt said. But the company quit, administrative problems left some patients without doctors, and the program became "one of the most expensive boondoggles in state history," William La Jeunesse wrote in The Arizona Republic on Sept. 30, 1984.
"It was a total disaster. We spent two years putting this all together, working with the administration and the Legislature. It just totally collapsed," recalled Babbitt, whose political reputation was also on the line. "At that point we had to start from scratch. ... Then the question was, where in the world are we going to find someone with the skill and the knowledge and the leadership qualities to put the pieces back together."
Babbitt, a Democrat who was governor from 1978 to 1987 and later served as secretary of the Interior under President Bill Clinton, said he not only needed someone with leadership qualities but also with a broad understanding of health care and the personal skills to put it all back together.
"That was Joe and Don Schaller. The two of them are responsible for the AHCCCS program as it developed and became a real success, a national model," Babbitt said. "We started off with a total disaster and ended up with a national model."
Len Kirschner, who later replaced Schaller as the agency director, once described Schaller as "Mr. Outside" and Anderson as "Mr. Inside," and said together they made an effective team.
"We figured out what we wanted to do, even though it was different from what every other state was doing with Medicaid, and we did it," Anderson wrote in a Nov. 2, 2003, opinion piece published in The Arizona Republic.
Anderson and Schaller took the AHCCCS reins in April 1984, a month after the state assumed full administrative control of the program. Anderson and Schaller had to clean up a big mess. The agency was set to lose $60 million and only had $143,000 in its reserves to cover it, Anderson told Republic reporter Jodie Snyder in February 2006. They worked with everyone from federal auditors to the FBI to make sure the money was being appropriately spent.
Among other problems Anderson identified with the agency, was how easy it was to enroll in the program, he told Snyder.
"Any dog could have walked in and put its paw on the counter, and it would be enrolled," he said at the time. "We found the damnedest stuff."
Though they were in their jobs at AHCCCS for less than three years, Babbitt in 1986 referred to what he called the "Schaller-Anderson regime" as an "unconditional success." After Schaller and Anderson turned the agency around, Arizona became a national model for Medicaid programs nationwide.
Anderson recognized what's often ignored by U.S. health care models: that paying for regular, routine health care, particularly for at-risk populations, saves money.
"In a managed care setting the goal is to control cost, but the principle my dad brought was that we put members first," Debbie Anderson said, citing as an example Anderson's commitment to improving preventive care to give patients healthier, longer lives, a move that cuts expense through averted hospitalizations.
When Schaller and Anderson left their government jobs in 1986 they went on to form a successful health consulting firm called Schaller Anderson. Debbie Anderson later went to work for her dad in various roles, including as counsel in the firm's legal department.
Schaller Anderson's core business was helping states manage medical costs for poor and elderly people covered by Medicaid. The consultants' early contracts included creating the Arizona Long-Term Care System, known as ALTCS. When the state's largest Medicaid health plan, Arizona Physicians IPA, was hemorrhaging money, Schaller Anderson got the contract to rescue the plan and ran it for several years. They grew the firm to 1,800 employees and operated plans in six states.
In 2007 Aetna purchased Schaller Anderson for $535 million. Anderson later moved from Arizona to California, where he and his wife, Mary Dewane, founded the Benovia Winery. Schaller died in 2012.
"As a person he has always been very generous and through his giving has supported numerous organizations," Sherwood said.
Anderson quietly donated to causes that he cared about, including startup money to what is now Progress Arizona, a progressive left-leaning advocacy group that, among other things, aims to educate the public about political disinformation. In 2013 he donated $100,000 to help a gun buy-back initiative by then-Phoenix Mayor Greg Stanton to collect unwanted firearms before a new state law kicked in that made it illegal for municipalities to destroy guns acquired in buy-back programs, his daughter recalled, adding that her dad did not seek recognition.
"He didn't want to be front and center," Debbie Anderson said. "He was the best of us."
Anderson's children thought the toast that their dad frequently gave: "To our worthy selves," was emblematic of his devotion to service, as it meant everyone was worthy, the family wrote in an Aug. 7 notice from Benovia Winery.
The toast was inspired by Anderson's close friend, the late Monsignor Edward Ryle, who was a prominent Catholic priest and social activist in Arizona, the notice said.
The Anderson family suggests memorial contributions to Providence Santa Rosa Memorial Hospital, 151 Sotoyome St., Santa Rosa, California, 95405, or givetomemorial.org; to Barrow Neurological Institute, 2910 N. Third St., Suite 450, Phoenix AZ 85013 or giveto.supportbarrow.org, and The V Foundation for Cancer Research, 14600 Weston Parkway, Cary N.C. 27513 or www.v.org/ways-to-give.
This article originally appeared on Arizona Republic: Former Arizona Medicaid innovator Joseph Anderson dies at 76
