Slaying the Medicaid Monster

Legislators have created a Medicaid monster, which eats up 22% or more of their state budgets.  Now they want to slay it. 

However, they’re not seeing the real monster clearly.  Cutting the legs out from under Medicaid recipients isn’t the same as cutting the monster down to size.

A Florida bill illustrates how states are attacking the wrong things. 

Under a Florida Medicaid reform proposal, Medicaid patients would be charged $100 for non-emergency visits to a hospital emergency room.  The purpose is to save money by discouraging unreasonable use of emergency rooms. 

Nearly half of all visits to emergency rooms are for non-emergency reasons.  This is true of Medicaid patients, insured patients, and uninsured patients.  The main reason the percentage is so high isn’t that people choose to go to the emergency room for minor complaints.  Laypeople aren’t qualified to diagnose their own emergencies.  Health professionals tell them to use emergency room because it’s better to be safe than sorry.

Here are three true-life examples that illustrate the point.

• A 56 year old man complains of chest discomfort and shortness of breath, and the paramedics who respond advise him to go to the hospital immediately.  Even though clinicians describe his symptoms as those of a classic heart attack, the tests are negative. It is a false alarm. 
•  A 35 year old woman walks into the emergency room complaining of an upset stomach.  She is examined and advised to take an antacid.  She reports feeling better and is discharged. Several days later she is admitted to the hospital in severe pain, and is diagnosed with an ovarian cyst. 
• Three times in two weeks, a young man enters the emergency room complaining of leg pain.  Clinicians suspect that he may be shopping for pain pills.  They find nothing wrong with his leg, and discharge him.  A few days later, the patient is in the hospital after attempting suicide.  His complaint was about his leg, but his problem was his mental illness.

Who is to say which of these patients shouldn’t have gone to the emergency room?    

When people need health care someone has to pay for it.  For too long, states have taken the position that this should be someone else.  Letting people at the poverty level shoulder more of the burden through $100 charges is just the latest strategy. 

This is because imposing a $100 charge on patients will cause care to be deferred, delayed, or denied.  People will try to wait out their emergencies.    

This won’t matter to the 56 year old who didn’t have a heart attack.  He’ll be fine the next day.  The woman with the ovarian cyst and the suicidal man won’t be so lucky.

Medicaid isn’t a monster.  It’s a lifeline for people who need health care. 

It is also a lifeline to the states.  It may absorb 22% of their budgets, but it also supplies 15% or more of their total projected state revenues.  The federal government reimbursed states for an average of 57% of their costs through 2009, 66% in 2010, and will pay 90-100% of the cost of program expansions under health reform. 

This payment results in four times the amount of revenue states receive from corporate taxes, and almost as much as they raise from all state income taxes combined. 

Like the governor of Texas, some Florida legislators are threatening to drop out of the Medicaid program unless the federal government agrees to let them cut Medicaid benefits to the elderly, children, and lower middle class families.  The Governor of Texas dropped this idea when his commissioner reported how much harm this would do to the state. 

The way for states to control Medicaid costs isn’t to make it harder for people to receive Medicaid benefits.  States need to fix the mistakes they have made over the years that have led to higher costs, not compound them. 

First, they reduced Medicaid reimbursement to physicians and other providers to such a low level that most dropped out of the program.  In many areas, the only Medicaid providers left are the hospitals, so that’s where Medicaid recipients go for care.  To its credit, Florida is following the federal government’s lead and considering higher reimbursement rates for some providers.   

Second, they limited community care, home care, and non-health care options to people on the program, and refused Medicaid to people with mental illness, pushing them into higher-cost treatments.

Third, they forced recipients into managed care programs that did a better job of denying care than coordinating it, making the population sicker.

Fourth, they put healthier, working people with incomes slightly above the poverty level onto county and local programs that receive no federal reimbursement.

Despite the harm they’ve done, some of these mistakes are still on lists of state-proposed “reforms.”   

That’s the real Medicaid monster.

Making Health Services Our Priority

Are essential health and behavioral health services a priority for our elected officials?  We got a clear picture when House leaders offered their 2011 continuing resolution and President Obama proposed his 2012 budget this past week.   

Both the continuing resolution to fund federal agencies for the current fiscal year and the President’s budget proposal for next year cut billions of dollars from the federal budget.  Some essential health services are surprising targets.

Cost Per Person to Restore Proposed Health Cuts

For a total savings of $2 billion, or just over six dollars a person, would we choose to slice what they chose to slice, or would we make health services a bigger priority?

The continuing resolution proposed to cut $1.3 billion from community health centers.  These centers are located in every state.  They provide comprehensive primary care to everyone, regardless of their ability to pay.  They employ doctors, dentists, nurses, counselors, and other health professionals. 

They treat a lot of elders, people with disabilities, and lower income working families because they accept Medicare and Medicaid in addition to private insurance.  They provide high quality services, and meet a significant consumer demand.  According to the National Association of Community Health Centers (NACHC), they served 20 million Americans in all income ranges last year. 

NACHC responded that the proposed cut would cost 3.3 million Americans their care during the next few months, worsening the health care crisis in our country and driving up costs for everyone.

The continuing resolution also proposed a $500 million cut to mental health and substance abuse services, reducing the federal Substance Abuse and Mental Health Services Administration (SAMHSA) budget from $3.7 billion to $3.2 billion.  This is a 10% reduction from actual FY2010 funding.  It affects hundreds of thousands of children and adults with serious behavioral health problems. 

Elected leaders are betting that reducing services won’t backfire and leave more people with behavioral health problems without any treatment.  However, in providing the justification for her budget request, SAMHSA Administrator Pamela Hyde noted that over 10 million Americans already have unmet mental health needs and mental illnesses cost our economy over $100 billion per year, making this at best a risky, pound-foolish bet. 

Essential health services weren’t spared by President Obama in his proposed 2012 budget either.   

The President proposed taking $133 million from prevention by eliminating funding for the Preventive Health and Health Services Block Grant and halving funding for the Healthy Environment program aimed at preventing asthma and other chronic conditions. 

Though asthma has become one of the most common chronic conditions in our country, the President’s budget seems to be throwing in the towel on asthma prevention.  In justifying the cut in his proposed budget, his budget office writes “there are currently limited proven means of asthma prevention. In asthma care, the key intervention is to increase use of inhaled corticosteroids...” This is an uncharacteristic and remarkably one-sided rationale for emphasizing treatment at the expense of – instead of in concert with – prevention.

Each state decides how to allocate the prevention dollars it receives through the Preventive Health Block Grant, choosing 265 programs of local importance to support. 

In Florida, for example, the block grant has been used for chronic disease prevention programs, water fluoridation activities, and services for victims of sexual violence.  In Connecticut, it has funded childhood lead poisoning prevention, youth violence prevention programs, older adult fall-related injury prevention, and cardiovascular disease prevention.  In Texas, it has been used for sanitation services in rural border counties, support for a trauma registry, and support for local public health services.

While the President argues that there are other prevention services available, the long-standing problem in this country is not that we fund too many prevention services, but too few.    

Funding for this block grant is already $50 million less than it was in 1994, and it should come as no surprise that our health status as a nation has declined across a number of indicators since that time. 

What if we said no to cuts to these community health centers, behavioral health services, and prevention programs?  The $2 billion this would cost would add up to approximately $6.19 per person for the year.  Spending this $6.19 would result in the retention of hundreds of prevention programs across the country, up to 11 million physician visits, and services to over 200,000 adults and children with behavioral health problems. 

Have our nation’s resources really become so scarce that we can’t afford $6.19 a person to buy all this?

Maybe so, but I suspect the real answer lies in our priorities.  They spend this much every week on the war in Afghanistan, and both the President and Congressional leaders have made Afghanistan their continuing priority.  It’s past time for some new ones.

Cutting Health Care, Florida-style

When you’re headed in the wrong direction, running to the front of the crowd and yelling charge may not be the best strategy. 

On Monday, Governor Rick Scott of Florida did this when he proposed his new state budget. 

Like every state, Florida has struggled over the past few years as state revenues have declined.  The Center on Budget and Policy Priorities has documented just how tough that job has become – at least 21 states have already proposed budgets this year with inflation-adjusted spending below 2008 levels.  

In presenting his bare-bones $66 billion budget, Governor Scott promised to bring new business principles to state government.  The problem is that he forgot an old one.  If you don’t increase the supply of a product when demand goes up, you’re going to pay an increased price. 

He proposed $4 billion in cuts (over two years) from current Medicaid levels.  Medicaid is almost 30% of the state budget, and cutting it would help him close a budget gap caused by reducing taxes on corporations.

The problem is that Medicaid is a product in high demand.  Almost 3 million people in Florida were on the program as of the beginning of the year, an increase of a quarter of a million from one year ago.

Why is demand so high?  Three reasons stand out:

• because over 400,000 of Florida’s senior citizens can’t afford the cost of nursing care without it;
• because over 250,000 of Florida’s adults with disabilities like mental illness can’t work and otherwise survive on meager Supplemental Security Income;
• because over 1 million children under the age of 10 and another half million other poor children have no other health insurance. 

The only purpose of Medicaid is to give health care providers some modest reimbursement for the services they provide to these elders, people with disabilities, and low income children and their families.

There are two ways to cut from Medicaid today, and neither is in the public’s interest. 

The first is to pretend that providers are making a windfall off the program (they’re not) and to cut reimbursement rates to hospitals and nursing homes.  In 2009, Florida cut Medicaid rates to nursing homes by 10.5% percent, and in 2010, it cut Medicaid rates to hospitals and nursing homes by 7%.  Governor Scott wants to take another 5% this year.  When rates are cut, patients get less care, and providers get the blame. 

The second is to cut services from the program.  The Governor proposes to do this by making care more “consumer-directed.”  This sounds good until you imagine the 85 year old nursing home patient, the 8 year old child, and the 58 year old person with schizophrenia “directing” their own care.  It’s easy to see how this strategy might result in them receiving fewer services.   

A far better approach to reducing Medicaid costs is to invest in people’s health.  Healthier people don’t need as much medical care.  This is just common sense. 

If we don’t increase the supply of health programs soon, states are going to pay a big price.  Florida had 181,000 65-74 year olds on Medicaid last year.  This number grew by 10% to 199,000 this year.  It had 60,000 60-64 year olds on Medicaid last year, and this number increased to 67,000 this year. 

There are older, sicker, people headed for Medicaid in the future, and the only variable we can do anything about is the “sicker” one.

However, Florida’s governor thinks we should cut health programs a half billion dollars, and opposes implementing all of the provisions of health reform – even those designed to make our population healthier. 

As a result, he is sealing Florida’s fate.  Florida’s Medicaid program will continue to grow because of what Governor Scott is advocating today.  We need a better strategy than his.

Unfortunately, it’s hard to see one coming from the Legislature.  Florida’s version of March Madness is its annual 60-day legislative session.  Thinking long term is a luxury in that time frame, and legislative leaders are preparing their own short-term cut lists.

One of them would keep Medicaid in play for people with behavioral health problems, but reverse a small increase in the Governor's budget by eliminating every other state program serving them. 

 According to the Mental Health Association of Palm Beach County, Florida is meeting just over a quarter of the service needs of adults with substance abuse disorders, ranking 35^th in the nation in per capita spending for substance abuse services, and 49^th in spending for mental health services. 

Where the public interest is concerned, this strategy is scarily short-sighted.  Ten years ago, child welfare advocates were telling policy leaders that children whose parents abused drugs and alcohol were almost three times more likely to be abused, and we know that both substance abuse and child abuse are among the pre-conditions for violent behavior later on.

Actions have consequences.  Bad strategies lead to bad outcomes.

How Did We Let This Happen to Our Children?

The late comedian Jack Benny made himself the butt of a running gag about how cheap he was.  A crook would come up to him and demand “your money or your life!”  After a long pause, Benny would deadpan to the increasingly impatient crook, “I’m thinking about it.”

It’s funny to think about someone who would hold onto his own money so tightly that he would put his own life at risk.  It’s not funny to think about people who would do the same and put their children’s lives at risk.

At the beginning of the 21^st century, we could feel good about the progress we were making to improve the health of our children.  While child poverty rates were doggedly high, other key indicators, including infant mortality rates, low birthweight rates, immunization rates, and violence rates, were all improving.  We had reason to believe that even the “compassionate, conservative” approach to policymaking would continue to get results.

It didn’t happen.  Some data from the Annie E. Casey Foundation’s KidsCount program tracking children from birth to adulthood show just how poorly we've been doing these last few years:

• After dropping from 38,351 in 1990 to 28,035 in 2000, the number of infant deaths increased to 29,138 in 2007;
• The number of low birthweight babies increased from 289,418 in 1990 to 354,333 in 2007, and the percentage increased from 7% to 8.2% of all births during the same time period;
• 75.7% of children age 2 are properly immunized, up from 72.5% in 2003 but down from 77.4% in 2005; 
• 52% of children age 6-17 do not engage in exercise at least five days a week, and 32% of 10-17 year olds are overweight;
• 14,140,000 children in 2007 had special health care needs, up from 9,360,356 in 2001;
• There were 10,198 teen deaths from accident, homicide, and suicide in 2007, age 15-19, a number that has remained steady over the decade.

When some political leaders hold up a mirror to these facts, they see them backwards.  They see decline and call it exceptionalism; they see investment in our children and call it waste.

In the early part of the past decade, we cut our taxes and got involved in two wars.  We paid less attention to the health of our children than we should have.  We put too little money into their well-being, and the trend line is still going in the wrong direction.  

Where children are concerned, American exceptionalism has become American “except-ionalism.”  We’re taking care of everyone “except” our children.

Governors have asked the federal government to let them cut children’s health programs this year, when they should be expanding them.  Twenty-six of them even went to court over the Medicaid expansion mandate, arguing that they were being “coerced” into providing needed services for families and children (see below).

There was a time when we invested in programs for our children because we understood that letting any children go hungry, be homeless, or become sick and not be able to get care was unacceptable in the greatest nation in the world.

We created mandatory immunization programs to protect them from deadly diseases.  I've still got the polio immunization card my mother was given by the public health department when I received my vaccine.  No one argued that we didn't have the resources to pay for this.

We didn't always need a crisis to take care of our children.  We built playgrounds and sports fields to give them plenty of opportunities to exercise.  We protected them from weapons and violence to keep them safe.  We invented Medicaid and Children’s Health Insurance Programs in part to make sure they had health care when they needed it. 

Today, we have elected officials saying we can’t afford all these things.  It’s not really because the money’s not there.  It is.  It’s because they think we’re too cheap to part with it.  They have us playing Jack Benny's old role, except no one's laughing.    

The decline in the health status of our children is where the political fantasy that we can cut and do no harm is introduced to reality.  Children get sick, and some even die, when we stop investing in their health.

Some brave political leader needs to step up and ask: What's more important, your money or your children's lives?  Will we really need to think about it for long?

A note about the Florida court ruling on health reform:  A short version of what the judge decided on Monday was that the individual mandate is unconstitutional, but that the Medicaid expansions are not.

The Supreme Court will have the final word on the individual mandate, probably in 2012 or 2013, but before it takes effect in 2014.  The judge's ruling in that area will have no effect for now.  States that don't want to implement the provisions that are already part of the law probably will not be let off the hook.

Though it wasn’t part of the headline, the judge also found that states are not being “coerced” into participating in the Medicaid program and providing the expanded coverage mandated under the law.  This finding means that the 26 states battling against the law have been defeated on one of the two main fronts on which they joined the battle. 

The Medicaid expansions will cover over 15 million Americans by 2016, and will be paid for almost entirely by the federal government.  How the states respond will be a test of their support for children, elders, and low income families.