• Indiana Lawmakers – The Medicaid Expansion

    I was a guest last week on Indiana Lawmakers, a weekly show on WFYI Indianapolis:

    The roundtable panel tackles the controversial topic of healthcare, and most importantly, how will Hoosiers be insured. Jon is joined by Democrat Representative Ed Delaney of Indianapolis, the ranking member of the House Insurance Committee; Dr. Aaron Carroll, the director of the Center for Health Policy and Professionalism Research at the IU School of Medicine; and Eric Bradner, Statehouse bureau chief for the Evansville Courier and Press, who has been chronicling the healthcare debate.

    Indiana’s new governor, Mike Pence, has joined other Republican governors in saying he wants to reject federal dollars and stay with the Healthy Indiana Plan. Will he be able to hold his line where others have already fallen? What are the numbers behind uninsured Hoosiers and the cost to cover their needs? Catch the spirited conversation on the future of healthcare for Indiana, from the Statehouse to your house.

    Here’s the video:

    If you prefer the audio only, you can download/listen here.



    Watch Healthcare – March 1, 2013 on PBS. See more from Indiana Lawmakers.

    • With regard to comments that Medicaid costs less John Goodman has a response to that:

      “Medicaid doesn’t bargain with anybody. It sets a price and providers take it or leave it. Unfortunately, almost one-third of physicians leave the money on the table and are refusing to take any new Medicaid patients. Moreover, if this were a desirable way to hold down costs, we don’t have to enroll [anyone] in Medicaid to achieve it. We could just impose price controls on the whole health care system and let everyone pay Medicaid rates.

      Of course, real economists know that the social cost of something is not the price we pay. It is the opportunity cost of the resources needed to produce it. In the case of medical care, as long as we have the same doctors, nurses, hospital personnel, etc. performing the same services, price controls do not lower costs, they shift costs — from patients to providers. In fact price controls actually increase the social cost of care — as the time price of waiting rises to ration a scarce resource.”

      • Do you honestly believe we haven’t heard these arguments before? Seriously?

        We have four FAQs on cost-shifting:

        To what extent do hospitals cost shift, or charge private payers more for shortfalls in public payment?
        How much cost shifting is due to the uninsured?
        How much cost shifting is there by physicians?
        How much cost shifting is there in the pharmaceutical industry?

        Why don’t you try responding to all of those arguments before repeating that talking point again.

        As for docs not accepting Medicaid… we have multiple posts on that issue as well.


        • I can only deal with the posts that are in front of me. I believe John Goodman’s reply to this issue is an excellent one that should be heard by all and even bears repetition at regular intervals.

          I don’t want to guess what subject you wish discussed and start posting those guesses. That takes a lot of time and I don’t think you want posters to exceed the time allotment you set which doesn’t permit in depth discussions that cover all the angles.

          Since my time is now short I will respond briefly to cost shifting of the uninsured to just one of the six topics you mentioned. The uninsured contain a large diverse segment of our population. Many of the uninsured are the young that do not think insurance rates are fair and thus rationally refuse insurance. Many earn a good deal of money and don’t want to pay for insurance. Many qualify for Medicaid or other programs and haven’t applied.

          When we actually take the uninsured in total the amount of money shifted is not that great. Knowing that those with money will be charged far more than insurance pays and will be sued for payment we can note that frequently they pay far more than the insured and are actually putting money into the system. Though to my knowledge not yet studied if we were to add up all those uninsured that paid and all those that didn’t pay we might find that there is no underpayment for that group if we use the average actual amounts received by hospitals from the insured.

          • Sorry, but no. From our comments policy:

            This is an evidence-based blog, so we strongly encourage citations to support any claims that are not obviously true. Administrators may not approve comments from individuals who post suspect assertions without credible evidence. (Credible evidence is not a link to someone else making the same unsubstantiated assertion.)

            I have no problem with you citing evidence that supports your theory of cost shifting. Ihave no problem if you can find evidence to support an assertion that plenty of people who make less than 138% of the poverty line, and thus would be eligible for Medicaid, “earn a great deal of money and don’t want to pay for insurance”. But merely repeating a point because someone said it, you like the sound of it, and you think others should hear it, is not the way this blog works. If you want to do that, please feel free to start your own blog.

            We also don’t have any time limits for comments. Take all the time you like.

            • Correction, instead of time allotment I should have stated word allotment, but if taken in context they mean the same.

              Nothing I have stated is without factual basis and anything that was my opinion was designated as such.

              I never said that people who ” make less than 138% of the poverty line, and thus would be eligible for Medicaid” earn a great deal of money. That was not my point. I remarked that many of the uninsured “qualify for Medicaid or other programs and haven’t applied.”

              I also said “Many of the uninsured are the young ”


              Finally I said many of the uninsured “earn a good deal of money”


              My point was that the uninsured come from all walks of life and when figuring out cost shifting one must look at all these groups. I really wish you wouldn’t get so upset at what I say for if I am wrong I would like to be corrected and where there are many interpretations I would like to know what the other viewpoints are. That is your desire as well, right?

    • Conservative pundits and policymakers typically deride Medicaid and Medicare for costing too much. Then, in the next breath, they complain that these programs don’t pay providers enough.

      There’s a simple solution to the issue of Medicaid and Medicare not paying providers “enough.” Pay them more. Of course, that will cause the cost of these programs to increase. So, then what?

      • “Conservative pundits and policymakers typically deride Medicaid and Medicare for costing too much. Then, in the next breath, they complain that these programs don’t pay providers enough.”

        Cannot both of those statements be true at the same time?

        • Won’t paying providers more raise costs?

          • The simple answer would be yes, but that answer might not be correct because total costs are created by a multitude of variables. Medicare has tried to control costs in part by lowering reimbursement rates for physicians, but that sometimes has the opposite effect. This opposite effect may seem counterintuitive if one is looking at only one variable, but it really isn’t.

            • Of course you’re right – total costs rely on both price and volume, which are in turn affected by many variables. But I think you’re overly complicating the issue in this case.

              We can solve low Medicaid payment to providers by paying them more. Are you saying that raising provider payment in Medicaid would not raise overall program costs? Is there an issue in Medicaid in which low FFS payment is encouraging providers to overtreat?

              If so, where’s your evidence? States keep payment low to keep costs low. In cases in which payments are raised – and there’s plenty of them – costs go up.

              The evidence base for Medicare is more complex. As you know, reducing payment often leads to volume increases. I’m not aware of much evidence that this happens in Medicaid (much of which is provided via private managed care organizations, which tightly regulate volume).

          • I am talking in general for Medicare since you included both in your initial comment. I don’t like to discuss Medicaid because there is a variation within the states, but I think what is true in Medicare on subjects such as this one are generally true for Medicaid.

            I don’t wan’t to spend a lot of time looking up references for this issue since the rationale can be demonstrated logically and has been shown to happen. The examples following are all generic.

            Example: Patient sees a physician that notes a work up is needed, but the insurance company requires all sorts of time consuming information. The fee for the office visit is low. That causes the physician to send the patient to a specialist that might otherwise not have been sent. This can start a process of over treatment.

            Example: Alternatively rather than spending the initial time with the patient the physician might quickly order a battery of tests using the tests rather than his diagnostic acumen to center in on the problem. This creates higher costs in two ways. Some of the expensive testing might be unnecessary and adds to the costs and some of the testing might pick up problems that require further testing. This latter cost is very expensive with very little yield.

            Example: Physicians expect a certain annual return. If they expect a $100,000 profit and their overhead is 50% then they have to create $200,000 in revenues. That is profit plus overhead. Let us say the fee is cut. The physician might attempt to increase revenues adding to the marginal care provided where for every $1 that the physician makes up the insurer has to pay $2.

            Example: Alternatively the physician might raise revenues by doing care that is not approved by the insurer. This shifts costs (desired costs) to the patient making global costs rise while reducing the physician pool available to treat sick patients.

            These things are extremely complex and are based upon incentives. That is why as you have already mentioned some states have tried alternative methods to handle Medicaid patients. Some of them I believe increase payments.

    • I am at the library now, so I do not have access to my excerpts and links.
      One of them is from iilliman, a well-respected actuarial form, which cites that Medicare pays 80% of private insurance, and Medicaid pays 60% of private insurance, on average.
      Is that not cost-shifting?
      What would the environment look like if private insurers paid Medicaid reimbursement, due to government fiat?
      Don Levit

      • What Medicare, Medicaid, and insurers pay has no relationship to costs. Not sure what you’re trying to say.