Poor, Not Dumb: Common Sense Reform for Medicaid
By Dr. Linda Halderman
Within the national debate over healthcare reform, an assumption has been revealed in several proposals:
Healthcare decisions for poor Americans are best left to the U.S. government.
As a former rural breast cancer surgeon whose practice consisted largely of uninsured and underinsured women, I am uncertain why the same group that brought taxpayers $20,000 toilet seats should be in charge of the medical treatment choices patients and their families make.
As a provider of government medicine, I’ve seen the low quality of decision-making offered when it is shifted from patients and their doctors to Sacramento bureaucrats.
In 2006, Medi-Cal (California’s version of Medicaid) denied payment for one of my patient’s breast cancer surgery due to “incorrect gender.” She was as surprised as her doctor. After five appeals and nine months had elapsed, Medi-Cal finally paid me $253 for the two-hour cancer operation and 90 days of follow-up care.
So forgive me if I am a bit skeptical at the reform proposals made by California’s Republican Governor and at least three Democratic Presidential candidates, all of which include a greater role for government in funding and directing medical care for lower-income populations.
All would swell the number of citizens whose coverage is subsidized and managed under state and federal programs.
Medi-Cal now covers one in six Californians, and the U.S. government currently spends 45% of its healthcare dollars to cover 27% of the population via Medicaid and Medicare. U.S. taxpayers watch their hard-earned dollars wasted on inefficient, top-heavy bureaucracies with little accountability as to how much is actually spent on patient care.
Earlier this year, the Centers for Medicare and Medicaid Services admitted that millions of dollars were lost when the Atlanta-based oversight firm hired to detect Medicare payment fraud wrongfully rejected payments made to hospitals and doctors, making overpayment allegations on cases they were not authorized to review. This increased the corporation’s government-paid “bounty” for this work, a hefty $0.25-0.30 for every dollar of overpayment supposedly uncovered. Unraveling this attempt at accountability will likely take years.
Currently, Medicaid expenditure per enrollee is nearly $7,000 per year. This high cost “health plan” gives recipients access to long wait times for fewer doctors, guaranteeing little ability to make healthcare decisions for themselves and their families. Arbitrary decisions made by government employees-nearly 6,000 in California alone-overrule recommendations made by doctors and nurses sitting beside their patients in exam rooms across the state.
Medicaid’s astonishing administrative costs compound the problem. According to 2005 data from the Center for Medicare and Medicaid Services, over 31% of every dollar spent by Medicaid did nothing to provide medical treatment.
There is a better way to help vulnerable Americans receive high quality medical care while protecting the taxpayer, without expanding an already bloated bureaucracy.
I propose that the $580-plus per month now paid for every man, woman and child covered by Medicaid would be more effectively, responsibly spent as follows:
1. Low cost private insurance plans are now available throughout the U.S. Instead of funneling $580 to Medicaid, a private health insurance policy with a $2,400 deductible could be purchased for less than $200/month for most enrollees. Private plans for healthy, younger recipients often cost less than $100/month.
2. To cover this deductible for those without resources, a Health Savings Account (HSA) would be funded according to poverty level guidelines now used to determine Medicaid benefits.
For example, Medicaid recipients at 200% of the federal poverty level would have their HSA fully funded at $200/month to cover the entire deductible, with a sliding scale for those with somewhat higher incomes.
3. For high-risk patients with chronic medical conditions, a risk pool like California’s “Managed Risk Medical Insurance Board” would be used to obtain more affordable policies than would otherwise be available. This protects taxpayers from the expense associated with covering sicker patients while ensuring that coverage remains available for those who need it most.
Under this model of Medicaid reform, the worst-case scenario would bring the $7,000 yearly federal and state expenditure down to $5,000 for every person covered. For younger, healthier patients covered by the program, costs would be considerably lower.
This model, which uses low cost, high deductible plans with the safety net of a private Health Savings Account, reduces costs to the taxpayer. It offers accountability by limiting HSA use for qualified medical expenses.
It protects vulnerable patients from financial disaster during years when they need expensive medical care while lowering costs during “healthy” years instead of mandating ever-expanding Medicaid funding. It restores healthcare decision-making to patients and families with the guidance of their doctors instead of relegating these choices to a faceless “Treatment Authorization Request” form or government employee with the power to interfere in the most private of decisions…those involving our health.
Most important to me as a doctor whose rural practice was destroyed by the frustrating, unsustainable bureaucracy known as Medi-Cal, this model for reform increases quality healthcare access for those with few other options.
I sustained a personal and professional loss when I was forced to stop providing services as the only breast cancer surgery specialist in a 70-mile radius in central California who still accepted Medi-Cal. I could no longer afford the $10,000-$15,000 monthly hemorrhage related to reimbursement so low it would be cheaper to close my office doors.
My own loss is nothing compared with what the women who will be diagnosed with breast cancer in my community will face. “Coverage” with a government-funded “insurance plan” for them offers no coverage, after all.
The stakes are high in the national healthcare reform debate. But the rewards of improving the way we approach care for those without resources are great. I hope our legislators are listening; my patients surely are.
Dr. Halderman is a Board-Certified General Surgeon practicing in rural central California.
It’s too bad that our Democrat-controlled lagislature is committed to socialized medicine. If they get their way, public health care will become as costly and incompetent as their public schools.
The American people unfortunately believe that the Democrats have the best answer to their health needs. Sadly, they believe the myth that everything can be paid for if you merely tax the very wealthy a few dollars more. This is economic nonsense—but it sure sounds nice.
I have the solution to fix Medicaid.Start by auditing the Insurance industry.They set the rates that the government pays.
“Low cost private insurance plans are now available throughout the U.S.”
Medicaid recipients fall into two main groups: poor families with children, and chronically sick and poor individuals. Neither of these groups can qualify for low-cost private insurance.
Which brings us to…
“For high-risk patients with chronic medical conditions, a risk pool like California’s “Managed Risk Medical Insurance Board” would be used to obtain more affordable policies than would otherwise be available”
Well, technically, if a poor person with a chronic disease would currently pay $10,000 a year for medical coverage (if it were available), and would only have to pay $8,000 under the plan, that is indeed “more affordable.” But how about a few more specifics here? “More affordable” to whom?
For the past few years, health-insurance companies have been stampeding out of the individual-coverage market; what on earth makes you suppose they’d be eager to rush back into it, given the very real possibility their profits would be even more negligible than before?
I pay $400 per month for my employer-subsidized (but not by much!) health plan. My son, at age 23, has “aged out” of the company plan, but he’s now insured on a $90/month plan through Blue Cross.
As a Navy retiree, I also have Tricare, formerly known as “CHAMPUS”. It’s a farce. Tricare pays about 15 cents on the dollar of claims. (Between Tricare and the company plan, I guess we’re OK.)
I’m convinced that there ARE major savings to be wrung out of the costs of health care – and that the government is PRECISELY the wrong people to do it!
It sounds like America is in danger of jumping from the frying pan into the fire. I think the Australian system shows a way out. We have BOTH a public and private system. Governments of both parties have slowly learned how to make it work better. What makes it work is competition. The free public system develops waiting lists for elective surgery. Poorer people put up with that. Others buy private health insurance. If you go private you more control and you end up with a bill – normally in hundreds of dollars for surgery and few days in a private hospital. If the private system gets too expensive people go public. They can do either -their call – even if they have private insurance. Both sides are kept reasonably honest. It is a case of the government setting up the rules so that there is this kind of balance. Labor put in national health and the conservative party tried to ease it out and got thrown out in the 70s. Labor tried to ease the private system into oblivion and failed. The conservatives next time around didn’t try to kill the public system but encouraged people with rebates to take out private insurance while still charging them the separate and identifiable Medicare levy on their tax form. It isn’t perfect but it beats anything I hear proposed in the US. Hint. Single payer means monopoly. Monopoly means no competition. Capice?
Re: Allan: I have the solution to fix Medicaid.Start by auditing the Insurance industry.They set the rates that the government pays.
I think you have this almost exactly backwards. Insurance reimbursesment levels are generally derived from the payment schedules set up by CMS (medicare). Insurance invariably pays more than government for one primary reason: CMS is supposed to get best pricing (although there are exceptions). The only groups authorized by law to contract at less than Medicare rates are Medicaid, which where I live (Tennessee) pays from 10-20% less than Medicare. Many insurance companies (such as Blue Cross/Blue Shield here in TN) are moving to a 100% Medicare reimbursement policy. Medicare has a highly convoluted, involved, bureaucratic, slow, inefficient method for determining reimbursement that is frequently divorced from reality, but it does not put in the prevailing insurance rates into its calculations. (An example I like of being divorced from reality is one of the things I do will get reimbursed from Medicare 4 times higher just 60 miles away over the Kentucky border, even though my costs are the same or higher to perform.)
And interesting enough (for my field), Medicare reimbursement for a lot of the tests I perform have not risen in 4 years. So even though you hear about these dramatic increases in costs, they are not trickling down to the labs.
Allan, that is flat wrong. Private insurers set their rates based on Medicare, not vice versa. ALL my private insurers pay me rates calculated as a percantage of Medicare rates. When MC decreases payments (as it does EVERY YEAR), private insurers follow suit.
Like the kid who sees the emperor with no clothes on, please allow this tiny bit of trolldom. MOST people don’t get really sick, and usually like to spend their money elsewhere. But when they do get sick, they either have a nice job with ‘benefits’ (the current euphemism) or they start looking for some free hand – out. Politicians, ever eager to buy votes, cater to this desire with the added bonus they can tap into the largest pool of campaign cash available, the lobbying efforts of the AMA insurance industry and others. The medical monopoly has driven these costs to astronomical heights by offering us one standard of service – the super duper Rolls Royce and nothing else. Just look at the efforts of Oregon to prioritize their health care service – shot down in Congress courtesy of the ever present controlling hand of the monopoly.
Break up the monopoly – drive down medical costs. Like the trucking industry and the airlines, that must be the first step. This is the step the whole industry most fears, so it never gets discussed. It’s Orwellian.
Like the the gun nut who will never allow the government to pry his hand from his handgun, I am never going to allow the government to steal from me so they can pay for the huge buildings filled with beaurocrats, the fat lady at Walmart riding her rambler, the precious young thing practicing his risky ‘alternate lifestyle’, the demented 90 year old kept alive at any cost.
“Like the trucking industry and the airlines, that must be the first step. ”
Though I shudder to imagine what health care would be like if it adopted the customer-service standards of an outfit like, say, US Airways. Though Kaiser Permanente does come pretty close.
Anyway, the reality is that there will always be some kind of triage in health-care delivery. Proponents of 100% private insurance advocate triage based on ability to pay — or, to put it the crudest terms, survival of the richest. Single-payer systems are forced to practice triage based on availability of resource. Under both systems, people die unnecessarily.
The only difference is that under the pay-to-play scenario outlined above, only the “deserving” will receive medical care. So who gets to play God and decide who “deserves” to live or die?
the us public has to wake up before its too late whatever the the draw backs of government provided health care. privat insurance cannot and must not form the the basis of a whole health care system. private insurance companies must avoid covering people who are sick with chronic conditions these people cost too much. the only thing that has kept the the problem of adverse selction at bay is the large risk pools established by empolyer sponsored insurance. but these risk pools are now being destroyed by high costs. employers are dropping cover or offering so called consumer driven health plans which lets be honest offer little or no cover for the young and healthy and are useless for ill. They are basically financial products for the wealthy. The insurance industry is moving out of the health care business because theres no business in it.this will lead large numbers of middle and working class people uninsured the government (dont worry about mcain and obama and their like they are paid by the hsa industry)the state machine will have to extend existing programmes to cover all the ill or your system would simply collapse steve dunkley diabetic receiving pretty good treatment under the national health insurance system of the uk and all eu states.no copays no high deductables