• More on that Medicaid audit study

    The following is a guest post by Harold Pollack, the Helen Ross Professor of Social Service Administration at the University of Chicago.

    A morning phone call with Austin leads me to make a few additional points about that Medicaid audit study I noted yesterday.

    First, it’s clear from this study and others Medicaid reimbursement rates are a real problem. So is our state’s often deplorable public management, greatly worsened by our budget crisis. The quality of governance matters. We have to do better.

    It’s odd to see low Medicaid reimbursement rates trotted out as a conservative talking point, especially when some advocates who speak most vociferously about this problem oppose what is required: spending more money to address the problem. The Affordable Care Act relies more heavily on Medicaid than many liberals wanted. This was the outcome a political bargain with fiscal conservatives who sought to constrain federal spending.

    I have been writing about this problem for years. So has pretty much every other liberal advocate for health reform. These problems are imperfectly addressed in the Affordable Care Act. There was better blocking and tackling on these points in the House version than in the final bill. Still, attention was paid to primary care reimbursement, to community health centers, and related matters. Whether the money will be appropriated is another matter.

    Every bipartisan compromise being floated to constrain Medicaid spending, including proposals to relax state MOE requirements, would make these problems worse. Absent greater federal support, the arithmetic is pretty daunting. We can and should address Medicaid fraud, pursue disease management programs, and more. These measures will improve the quality and integrity of Medicaid services. I see little reason to believe they will produce big savings.

    To reiterate: There are only so many ways to curb the level and the growth of Medicaid spending: Cover fewer people, cover fewer services, or underpay providers even more severely than we currently do. It just speaks volumes about Washington’s political process that we focus like a laser beam on curbing one of the very few notably under-funded components of our health care financing system.

    Second: audit studies usefully document the extent that we have a segmented health care delivery system. They do not directly compare the experiences of low-income Medicaid recipients with the experiences of low-income people who hold alternative private coverage. This particular study compared Medicaid with Blue Cross Blue Shield, probably the best private coverage in the area. BCBS is pretty costly, in part because it allows broad access to diverse providers. Cheaper private plans offer more limited access through a narrower network of providers. That’s true at my own employer, which offers excellent benefits.

    Third: People ask: Is Medicaid better or worse than private insurance in gaining access to needed care? Having Medicaid is obviously better than being uninsured. Yet it is difficult and probably misplaced to give a broad thumbs-up or thumbs-down answer to the basic question. One should give different answers for different people, who face different challenges in their access to medical and social services.

    Within that NEJM study, patients faced serious but basic issues: A broken bone, diagnosing type I diabetes, and so on. Medicaid patients can get reasonable, no-frills access to safety-net providers who address these concerns and who have genuine expertise in addressing the challenges people face in low-income communities. In serving these patients, a key policy challenge is to provide a financially sound infrastructure which ensures high-quality and dignified services within this network of care.

    Medicaid is designed for patients with complex medical and social service needs. There is no genuine private-sector equivalent for many Medicaid services provided to disabled individuals with special needs. Medicaid is also designed—and this is important–for patients who have no money. My wife and I care for a dual-eligible individual who has faced complex and costly service needs. We have encountered many issues with his Medicaid coverage. He has not faced financial difficulties related to his insurance coverage.

    If you are a low-income worker whose child has a costly illness, your private insurance could easily impose crushing financial burdens. The Affordable Care Act makes great progress on this front through regulatory measures that limit out-of-pocket spending, rescissions, and more. Still, if one’s child has a $500,000 cancer diagnosis, Medicaid provides better protection against medical bankruptcy than private insurers are likely to do.

    These are the strengths of Medicaid. Yet thinking about that $500,000 cancer, you would probably want your child to receive excellent care from the best provider. If your mother experienced a heart problem or a strange diabetes complication, you would want her to receive care from the most technically proficient specialists. This week’s NEJM study suggests that this might be hard. Many specialists are very reluctant to take Medicaid patients.

    Disparate access to technically proficient providers and hospitals means a lot to individual patient. It also matters at the population level, for example in explaining black-white health disparities. Pressing harder to broaden access, to raise the quality of safety-net providers, and to strengthen Medicaid itself are key challenges in improving public health. These are also major efforts pursued within the Affordable Care Act.

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    • My group carries BCBS since some of our staff live 50 miles away. It gives us the broadest possible coverage. If we went with the narrower, and much cheaper, coverage provided by our hospital, we could save about 20%. Cheaper insurance nearly always limits choices.

      Also, it is fascinating that people who complain about Medicaid’s low fees, also make the same complaint about Medicare, want to spend even less on these programs. Their solution seems to be private insurance for all, the most expensive solution of all, for those being insured.

      Steve