While the public debate about the Republican budget focused on the sharp reactions against Paul Ryan's Medicare privatization scheme, the other big "M" in health care, Medicaid, hasn't received the attention it deserves. As a result, the Obama administration has proposed cuts in Medicaid. These will undermine the achievements of its own historic health care law and harm access to health care for tens of millions of women, children and seniors.
Unlike Medicare, our national health insurance program for seniors and the disabled, Medicaid comprises 51 different state programs (including Washington DC) operating under a set of federal rules, financed by both the federal and state governments. As a result, it's much harder for the feds to control Medicaid costs through policy changes. The Ryan/Republican budget doesn't even try; it simply limits the amount that the federal government will spend on Medicaid and shifts the rest of the costs to the states, while weakening the rules so that states can dump people out of the program.
Unfortunately, most of the proposals that have been made by President Obama in the debt-ceiling negotiations are a kinder and gentler version of the same wrong-headed policy of shifting costs to states, and through them to American families, rather than dealing with the underlying reasons that Medicaid costs are rising.
It's true that Medicaid costs are increasing, but that's not because Medicaid has done a poor job of controlling health care costs, at least compared with the rest of the nation's health care system. For example, from 2000 to 2009 private health insurance companies spending per person increased by 7.7% each year while Medicaid spending on acute care health services -- doctor, hospital, prescriptions, tests, mental health -- increased by 5.6% a year. Medicaid did an even better job controlling spending on long term care, which went up an average of just 3% a year per beneficiary, the same rate at which the economy grew and lower that the overall rate of medical inflation (4.1%).
To really see where Medicaid spends it money, you only need to look at the 5% of Medicaid beneficiaries who are responsible for more than 50% of the costs. These are people with very serious, chronic health conditions and serious disabilities. President Obama knows this -- in fact, he raised the issue at the National Governor's Association in February.
The other major factor in Medicaid spending is increased enrollment -- particularly when the economy tanks. For example, enrollment of families was flat from 2004-2007 but spiked sharply once the recession began. Enrollment jumped by three million from June 2008 to June 2009 alone, the biggest increase since the early day of the program.
Rather than dealing with the root causes of high Medicaid spending, the Obama administration proposes to cut $100 billion from Medicaid over the next decade, mostly by changing the way it pays states for the program. The biggest change would be to reimburse states at the same rate for all their Medicaid patients, unlike now, where states get a different rate for different populations, such as children or seniors. The new so-called "blended rate" would be set at a lower amount than current health spending. Like the Ryan plan, the proposal is simply a cut to states, albeit a much smaller one than Ryan proposed and without the loosening of rules on who and what to cover included in the Republican budget. States would still cut back on who and what it covers, if only to the extent allowed within the current rules. States would also cut payments to providers, which in many cases -- particularly physicians, dentists and hospitals in some states -- would make it harder for patients to get needed medical care.
The "blended rate" proposal also strikes a blow at the Affordable Care Act, which is counting on Medicaid to provide care to more than half of the 33 million uninsured who will be covered under the new law. Under the Affordable Care Act, the federal government will reimburse states 100% of the cost of these new enrollees for the first three years and gradually reduce that to 90%. Compare that to the average 57% now that the federal government pays as its share of Medicaid. The blended rate would result in states having to pay a lot more for people who become eligible for Medicaid under the Affordable Care Act. As a result, states will throw up more barriers to enroll these working families and will scream more loudly about how the ACA is hurting their budgets. That later charge has almost no basis in fact now, but will become true under the blended rate proposal.
A second Obama administration proposal would close off one source that states now use to finance Medicaid, taxes on health care providers. Since states would be reluctant to replace these taxes with other taxes, they would also cut their spending on Medicaid, lowering federal spending.
In fact, only 10% to 15% of the cuts in Medicaid spending in the Obama proposal would come from rational savings in the system -- increased efficiencies in providing medical equipment and prescription drugs -- as opposed to simply giving states less money and making it harder for them to raise money for Medicaid.
The Affordable Care Act was a huge step toward a more rational health system, but the Obama proposals for Medicaid in the budget take us backward. Instead, the President should accelerate reforms that focus on the handful of high cost patients that drive most of the costs, by requiring states to implement care coordination programs which provide systems and incentives for health care providers to improve the care of the chronically.
Early this June, Senator Jay Rockefeller announced that 41 Democrats had pledged to "stand united against any efforts to slash Medicaid." Their action was aimed at the debt-ceiling and budget talks. Unfortunately, their resolve will be tested soon, in the Medicaid proposal made by their Democratic President.
Richard Kirsch is a Senior Fellow at the Roosevelt Institute, whose book on the campaign to win reform will be published in 2012. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform. This post has been re-posted from newdeal20.org.
Rep. Chris Murphy: Don't Forget Medicaid
In all likelihood, the whole 'budget talk thing' will fail, and Obama will have to resort to "The Constitutional solution" on the debt ceiling. These offers of compromise may be interpreted by the progressives as "throwing Medicare and Medicaid under the bus". More right wing crapola to divert us from real solutions. We hop from crisis to crisis.
Cost control will occur once someone makes the people on it realize that nothing is endlessly free. Pay for one child to be delivered- you want more kids, YOU pay !
Food stamp programs are heavily abused - so are Medicaid cards.
Stop the abuse and you will control costs.
Vote for the Progressive Caucus folks in the primaries and the Dems in the general.
http://en.wikipedia.org/wiki/Democratic_Leadership_Council
http://www.dlc.org/
Versus the Real Progressives, the Liberals, the Progressive Caucus
http://cpc.grijalva.house.gov/
Read their budget! It's the only one that solves the problems.
But the devil's in the details, and we seem so far away from being a Progressive nation. What we invariably elect is the status quo.
If we could rein in the bean counters and put some common sense bedside providers in charge, we'd see vast improvement. The problem as I see it is that we have a zillion people making decisions that haven't been at the bedside in decades, if ever.
In closing, let me say that I love my job. I love my patients and I love helping train new doctors and nurses!
The main issue is how does one shake-up the many entrenched systems currently in place?
While govt has the power to do it, elected politicians lack political will given the lobbying power (and money) of the many entrenched groups. Thus in many cases, various govt agencies are part of the problem.
Talking of cuts is aimed to "Starve the Beast" forcing the entrenched parties led by doctors and hospitals to reform themselves in a quality-cost-efficient manner. This needds to be done ASAP given the difficult fiscal straits the govt (federal, state, cities and counties) and various private corporations; that pay their workers' health insurance.
Govt can force parties to reform using credentialling bodies as a tool; which closely evaluates the leadership and monitoring of the hospitals' Quality Improvement and Utilization Review Committees and holds the hospitals' Medical Director the point person to bring about the changes and efficiencies.
Hospitals are the main "sphincter" where high cost care is delivered; and where one can obtain maximum "Bang for the buck".
"When they own the news they can bend it all they want." Jon Mayer
Several reports show, 75% of cost is spent on chronic illnesses which accounts for 70% of deaths. More than half of these chronic illnesses are preventable. Thus their costs could be saved with preventive care with diet,exerciss, stop smoking etc, which prevents overweight, diabetes, COPD, etc and their complications.
30% of healthcare costs are spent in the last few months of life.
15% of cost is spent on unnecessary emergency room visits; instead of accessing healthcare through the Primary Care Provider (PCP).
10% of cost is spent on medical malpractice, including the practice of defensive medicine.
40% of costs is for over-treatment, under-treatment and in-appropriate treatment.
Yet, these costs are higher in some states than in others; and are higher in some hospitals than others (within the same state). Cost per medicare enrolee in Northeast states is twice that in Midwest and Southern states. There is no evidence there is difference in quality of care or longevity of enrolee. Many studies show "high cost" hospitals do not deliver better care than "low cost" hospitals. This includes studies at premier hospitals like Mayo Clinic and Cleveland Clinic. This discounts claims that high technology, aging population and immigrants are causes of high costs.
Health care ping pong at its finest. Until this health care mess is resolved, Congress should be forced to give up their health insurance (probably the finest in the world), and live under their state's Medicaid plan...each with their own coverage and benefit plan. and none of it very satisfactory. Those who don't know can never understand the inequity in health care.