The Worst States for Your Health, 2012

What do South Carolina, Texas, Louisiana, and Mississippi have in common?

They all find themselves among the worst states for your health.  And they all have governors who have already declared that they don’t want to expand Medicaid to uninsured adults in their states.

South Carolina ranks 40^th, Texas is 41^st, Louisiana is 44^th, and Mississippi is 47^th in the 2012 Our Health Policy Matters rankings of the states.

The worst state for your health this year is Oklahoma, which dropped from 47^th a year ago. 

New Mexico came in just ahead of Oklahoma, and just below Nevada, Mississippi, and Arkansas.  Rounding out the bottom ten were Alabama, Louisiana, West Virginia, Texas, and Montana.

Led by middle-of-the-pack Medicare and Medicaid community spending, West Virginia escaped the bottom of the rankings this year.  Its 43^rd place finish represents an improvement of seven places over last year’s worst-in-the-nation finish. 

On the other hand, Texas had a comparable fall into the bottom ten, plunging five places to a tie for 41^st from its finish last year, on the heels of bottom ten Healthy State and KidsCount Health rankings. 

Kentucky made the biggest jump out of the bottom ten during the past year, from 45^th in 2011 to 35^th in 2012.

The states with governors who have said that they will reject the Medicaid expansion are among those states whose citizens probably need it the most.

In addition to South Carolina, Texas, Louisiana, and Mississippi, three other states have governors who declared that they would refuse to expand the Medicaid program in 2014 – despite the federal government’s offer to pick up 100% of the cost in the first three years and at least 90% ever after.  Florida landed at the cusp of the bottom third, finishing in 33^rd place overall.  Georgia just managed to stay out of the bottom ten.  Only Iowa, which ranked 19^th, escaped from the bottom half of the rankings.

But what is most interesting about the rejecting states is that they all do a relatively poor job of directing their current Medicaid money toward home and community-based services.

• Georgia ranks last in that category, Florida ranks 43^rd, Mississippi ranks 42^nd, Louisiana ranks 35^th, South Carolina ranks 34^th, Texas ranks 32^nd, and Iowa ranks 25^th.

And as a group, their Healthy State rankings – a measure of how effectively the states support public health – aren’t any better.

• Mississippi ranks 50^th (last), Louisiana ranks 49^th, South Carolina ranks 45^th, Texas ranks 44^th, Georgia ranks 37th, Florida ranks 33^rd, and Iowa ranks 17^thon that measure.

The states at or near the bottom of the rankings should also be nervous about the changes Paul Ryan has proposed for the Medicare program.

• Medicare spending on community services is the one area in which many of these states shine.  Community per capita Medicare spending in Oklahoma, for example, is 13^th in the nation.  In Nevada it is 16^th. In Mississippi it is 10^th.  In Alabama it is 8^th.  And in Louisiana it is 3rd.  (Florida is first in this category.)

Ryan’s proposed transition of Medicare to a voucher program, with a cap on the value of the voucher, could turn out to be the first step in a long process that undermines these community-based Medicare services. 

Medicare recipients down the road might want to use their voucher money to continue to pay for these, but they might have to use it to cover hospital stays instead.

The full rankings are available here.

The OHPM rankings are a modest attempt to average rankings from several independent sources to provide an overall picture, relative to the other states, of both the health of a state’s population and the overall quality and accessibility of the state’s health care services. 

The rankings factor in:

• Public health and prevention
• Access to primary care services
• Access to home and community-based health services, especially for low income and elderly people
• Access to quality hospital care, including general and specialty hospital programs (including mental health)
• Private insurance coverage of the population

This year’s rankings incorporated three recently-released independent rankings.  These were the 2012 KidsCount Health Rankings, the 2011 Healthy State Rankings, and the 2012 U.S. News and World Report Hospital Ratings.  They also factored in the most recent CMS data on state per capita community (non-hospital and non-nursing home) Medicare and Medicaid spending on community health care services, and Kaiser State Health Facts data on the state’s prevalence of nurse practitioners and the state percentage of privately-insured individuals.     

If you have questions about this column or wish to receive an email notifying you when new Our Health Policy Matters columns are published, email gionfriddopaul@gmail.com.

The Best States for Your Health, 2012

If you want to live in the state where Medicare pays the most per capita for home-based care for elders, then Florida is the place for you.  On the other hand, if you prefer the state which does the best job of protecting the health of its children, then head to Vermont.

But if you want to live in the best state for your overall health, then Connecticut is where you want to be.

Connecticut is the new number one in the 2012 Our Health Policy Matters Best States for Your Health Rankings.  Last year’s runner-up switched places with last year’s winner, Massachusetts, dropping its northern neighbor into second.

The OHPM rankings are a compilation of seven independent rankings and ratings of states.  The sources from which the final OHPM rankings are drawn are described below. 

Connecticut made the top by scoring well across the board, finishing second in Medicaid spending on community services, third in the Healthy State rankings and in the percentage of people privately insured, fourth in access to nurse practitioners, sixth in the KidsCount children’s health rankings, 12^th in Medicare spending on community services, and 20^thin in-state access to high quality hospital programs.

Northeastern states all did well. 

In addition to Connecticut and Massachusetts in the top two places, New Jersey, which took 3^rd, and New Hampshire, which tied for 4^th, also placed in the top five.  New York came in 6^th, Vermont 7^th, and Maine tied for 8^th with Pennsylvania.  Rhode Island finished just outside the top ten, placing 11^th.

The two states that broke up  the northeast’s logjam at the top were Minnesota, which moved up two places from 6^th place last year into a tie for fourth, and Utah, which went from 5^th last year to a tie for 8^th in 2012.

New York, Maine, and Pennsylvania all made big moves into the top ten.  Buoyed by top-six rankings in community Medicare and Medicaid spending and access to high quality hospital programs, New York jumped from 19^th place last year to 6^th. Maine moved up from 18^th on the strength of strong Healthy State and KidsCount children’s health rankings.  Pennsylvania, led by a 3^rd place finish in the number of high quality hospital programs, moved all the way up to the top ten from 22^nd.

Washington and Hawaii dropped out of the top ten, falling to 16^th and 17^th place.

Five states including Florida and Vermont shared first place honors in the seven categories.

In addition to topping the states in the KidsCount health ranking, Vermont finished first in the Healthy State ranking.  New Hampshire took first in the percentage of the population privately insured and in the number of nurse practitioners per capita.  California, which finished 23^rd overall, led all the states in the number of high quality hospital programs, and Alaska, which finished 30^thoverall, was first in per capita Medicaid community spending.

Florida finished 33^rd overall, down three places from last year.  While it was in the top ten in two categories – Medicare community spending – which it led for the second straight year – and in-state access to high quality hospital programs where it placed 9^th, it was near the bottom in two others – 43^rdin Medicaid spending on community health services and 47^th in percentage of people with private insurance.

The full rankings are available here.

The OHPM rankings are a modest attempt to average rankings from several independent state ranking sources to provide an overall picture, relative to the other states, of both the health of a state’s population and the overall quality and accessibility of the state’s health care services. 

The rankings factor in:

• Public health and prevention
• Access to primary care services
• Access to home and community-based health services, especially for low income and elderly people
• Access to quality hospital care, including general and specialty hospital programs (including mental health)
• Private insurance coverage of the population

This year’s rankings incorporated three recently-released independent rankings.  These were the 2012 KidsCount Health Rankings, the 2011 Healthy State Rankings, and the 2012 U.S. News and World Report Hospital Ratings.  They also factored in the most recent CMS data on state per capita Medicare and Medicaid spending on community (non-hospital and non-nursing home) health care services, and Kaiser State Health Facts data on each state’s prevalence of nurse practitioners and percentage of privately-insured individuals.      

Next Week: The Worst States for Your Health, 2012

Paul Ryan's Magical Thinking

A Medicare exchange in which private plans compete with a public option?  A Medicaid program unshackled by federally determined program requirements and eligibility criteria?

Now that Governor Romney has chosen Rep. Paul Ryan as his running mate, these new visions of Medicare and Medicaid will become part of the health policy debate in every state.

They are both part of Vice-Presidential candidate Ryan’s now-famous Path to Prosperity proposal published earlier this year.

In his vision, Ryan attacks an “open-ended, blank-check” Medicare subsidy that in practical terms means a government that will pay providers what it costs to treat diseases even for the most expensive seniors. 

In his own words: 

“Medicare subsidizes coverage for seniors to ensure that coverage is affordable.  Affordability is a critical goal, but the subsidy structure of Medicare is fundamentally broken and drives costs in the wrong direction.  The open-ended, blank-check nature of the Medicare subsidy drives health care inflation at an astonishing pace, threatens the solvency of this critical program, and creates inexcusable levels of waste in the system.” (p. 48)

In his new Medicare program – which would apply to everyone under the age of 55 – Medicare would no longer be a government-run insurance program for all. 

Instead, it would be transformed into a voucher system, in which every person at the age of 67 would be given a certain amount of money to spend making a choice among “private plans competing alongside the traditional fee-for-service option on a newly-created Medicare exchange.” 

Ryan envisions that “all plans, including the traditional fee-for-service option, would participate in an annual competitive bidding process to determine the dollar amount of the federal contribution.” 

Here’s the most important part.  The plans with the best coverage won’t determine the amount of the 

Medicare subsidy.  Instead, the second-cheapest plan would; Medicare beneficiaries would be responsible for anything above this.

There’s more.  The Medicare subsidy payment would also have a “hard cap” of no more than one-half of 1% more than GDP.  If medical inflation were higher than that – as it is nearly every year – the Medicare recipient would pay the difference.

From a consumer perspective, Ryan’s Medicare exchange will be like the Affordable Care Act’s health exchange on steroids – except that it will still have a public option.

It will save the federal government money in direct care subsidies, but not through medical cost containment strategies like capping rates.  Instead, it fills in a number on the formerly blank check sent to seniors, and if this number is too small makes seniors responsible for rationing their own care. 

And if higher out-of-pocket costs aren’t enough, those seniors will also have to spend 15% or more of their payment on the administrative costs and profits of the private insurance plans they will now be offered. 

Finally, none of this comes without added federal bureaucracy.  Because the existing Medicare bureaucracy – which has little fat in it – will still be needed to manage the public option, the government will need to grow a new Medicare bureaucracy to manage and regulate the Medicare exchange.

It is magical thinking to believe that an approach that shifts costs to seniors, skims dollars for new bureaucracies, and has no direct health care cost containment features will result in better care at a lower cost.

Current seniors may be breathing a sigh of relief after considering all this, knowing that Ryan preserves Medicare as we know it for everyone over the age of 55.

But it’s too soon for a victory dance.  The biggest health care challenge a good portion of the 55+ group faces is how to pay for long term care.  Ryan has $810 billion of cuts over ten years in mind for the Medicaid program on which they will rely.

He wants to reform Medicaid “by converting the federal share of Medicaid spending into a block grant indexed for inflation and population growth…. States will no longer be shackled by federally determined program requirements and enrollment criteria.”

In other words, if a state chooses not to cover nursing home “room and board” or name-brand pharmaceuticals to absorb its portion of the $810 billion cut, it won’t have to. And if it chooses to count all of the non-institutionalized spouse’s income and assets toward the Medicaid eligibility of an institutionalized spouse, it will be allowed to.

Ryan is right that we need a debate about the future of Medicare and Medicaid.  He is wrong, however, in believing that reducing benefits can happen without pain.

Our Health Policy Matters published early this week because of the selection of Paul Ryan as Mitt Romney's running mate.  It will return to its regular publication schedule next week, with a new column on Wednesday, August 22.

Denying the Inevitable

If 243 members of Congress knew that they were going to develop Alzheimer’s Disease or related dementia, would it change the way they make Medicaid and long term care policy?

Or would they continue to deny the inevitable?

When Congress convened in 2011, the average age of a House member was 57, and the average age of a senator was 62.   They were approaching the prime years for dementia.

If you don’t already have Alzheimer’s Disease or related dementia by the time you turn 65, then your chances of developing it between the ages of 65 and 74 are greater than one in 20.  Your chances of developing it between the ages of 75 and 84 are almost one in 7.  And after that your chances of developing it are one in 4.

At today’s prevalence rates, 28 members of Congress will develop dementia between the ages of 65 and 74, 91 between the ages of 75 and 84, and 124 later on.

The only thing that will change this trajectory is if they die sooner of something else.

If I were a younger elected official today, this might get might attention, and it also might get my attention that the number of people with dementia will increase from 5.2 million today to at least 11 million during my lifetime.

Representative Aaron Schock of Illinois and Senators Mike Lee of Utah and Marco Rubio of Florida all fit this bill.  They were the youngest members of their respective chambers (at 39, Senator Lee was a week younger than Senator Rubio), and they had remaining life expectancies of at least 40 years. 

So while we might forgive 87-year old Representative Ralph Hall of Texas and Senator Frank Lautenberg of New Jersey if they feel they don’t always have the luxury of taking the long view in policy-making, we should wonder a little more about Senators Lee and Rubio and Representative Schock.

They are all likely to be around when the fruits of their recent healthcare work ripen over the coming decades. 

And they may find some of them especially bitter.  

According to the Alzheimer’s Association publication 2012 Alzheimer’s Disease Facts and Figures, the cost of caring for people with Alzheimer’s Disease and other dementias – in today’s dollars – will increase from $200 billion to $1.1 trillion per year by 2050.

These $1.1 trillion are not inflated by forty years of GDP growth or the increased costs of medicine.  They represent what dementia will cost us down the road even with no inflation simply because there are more of us and we’re living longer lives.

Dementia is an adversary worthy of battle at the highest levels of government.  But neither Senator Lee nor Senator Rubio nor Representative Schock mentions it on his website. 

Instead, Senator Lee champions what he calls “saving the American dream,” which rolls back Medicaid funding to 2007 levels and caps it there.  Senator Rubio has endorsed the same approach.  Medicaid currently pays $36 billion a year of the $200 billion cost of care for people with dementia.  Under Senator Lee’s plan, it will pay even less than that toward the $1.1 trillion cost of care in 2050.

And Representative Schock goes one step further.  He touts a bipartisan effort last year to repeal the CLASS Act, which ironically would have offered private insurance for dementia-related care to take some of the burden off Medicare and Medicaid.

Dementia hits close to home for all of us.  A member of our family has it, and it has been progressing relentlessly for several years.  This is a pretty scary thing to witness.  It’s like watching a blackboard filled with facts and figures being erased, one giant sweep at a time, until all the information fades.

Senator Lee wants to save the American dream, but does he really want to do it by substituting a national nightmare of disease with no relief?  And whose dreams is he really saving?  Not the ones of our family members with dementia, nor the ones of their caregivers who already shoulder so much of the burden, nor even the ones of the 243 members of Congress who may someday join the ranks of those with dementia. 

Senator Lee, Senator Rubio, and Representative Schock are, of course, entitled to pursue the policies they choose.  But I hope they will never say that no one could have foreseen what they chose to ignore.

If you have questions about this column or wish to receive an email notifying you when new Our Health Policy Matters columns are published, please email gionfriddopaul@gmail.com.

Mental Illness, Aging, and the Failure of Public Policy

In the next twenty years, more than 3 million people over the age of 65 will likely experience serious mental illness.  Are we prepared to treat them?

The answer is no, according to a new Institute of Medicine report. 

The report was released in July, and it contains some striking evidence of the challenges we face as we confront the growing behavioral health care needs of our aging population.  We don’t have nearly enough trained providers.

And when states cut their existing state Medicaid programs or refuse to adopt the ACA Medicaid expansion, these decisions have devastating consequences for the providers we do have – and, of course, their patients. 

Today, between 5.6 and 8 million adults over the age of 65 are believed to have mental illnesses.  These numbers could nearly double over the next twenty years. 

There’s a reason that the range is so big.  We’ve given so little attention to this challenge in the past that we don’t even have an accurate count.

We do know a lot, however.  As the IOM report documents:

• At least 14-20% of the elderly population has a mental illness.
• Up to 1.9 million have a mental illness described as “serious” – a number that could grow to over 3 million by 2030.
• 57% of nursing home residents, or 675,000 people, have one or more mental health conditions.
• Dementia is not the same as mental illness.  However, 57% of adults with dementia, or approximately 2.5 million people, also have symptoms of mental illness.
• Older women are more likely than older men to have every type of behavioral health condition except two – alcohol abuse and drug abuse.  In fact, the prevalence rates of mental illnesses among elderly women are 50% higher than they are among elderly men.

Publicly funded programs – like Medicare and Medicaid – are essential to treating all these people. 

The 2009 AHRQ MEPS data determined that the cost of the mental health services alone for the over-65 population exceeded $17 billion.  Affecting 7.4 million individuals, behavioral illness was the 8^th most costly condition for the over-65 group. 

Medicare paid just over half the bill all by itself and the combined Medicare, Medicaid, and other public share was 70%.  Private insurance, on the other hand, paid under 12%, far less than patients paid out-of-pocket.

These costs don’t occur in isolation from other health care costs.

This is because elders with mental illness are also likely to have chronic physical conditions.

In one representative study cited in the IOM report, this group had an average of 3.8 co-occurring physical conditions:

• 58% had hypertension
• 57% had chronic pain
• 56% had arthritis
• 55% had hearing or vision loss
• 39% had urinary tract or prostate disease
• 28% had heart disease
• 23% had chronic lung disease
• 23% had diabetes
• 21% had gastrointestinal disease
• 11% had cancer  
• 8% had neurological disease

This puts pressure on providers, who must manage multiple chronic conditions at the same time. 

What’s the most cost-effective way to do this?  We already know the answer.

“What works for many older adults who need MH/SU services is a patient centered, team-based, primary care-centered model that is proactive and employs a coordinated team of personnel with specific roles and special training,” the IOM report concludes.

In other words, the same primary and behavioral health care integration initiatives that work for the non-elderly population work for elders, too.

But unless policymakers change the course of their current thinking dramatically, we may not get close to what we need.

• The report identified “a conspicuous lack of national attention” to developing an appropriate workforce – including mental health counselors, primary care providers, care coordinators, and others – to give this care.
• It also described “a fundamental mismatch” between the need for coordinated care and Medicare’s refusal to pay for the services of trained care managers and psychiatric consultations.

We could add a third.  State cutbacks to existing Medicaid programs and states’ refusals to implement the ACA Medicaid expansion compromise our most vulnerable aging adults.  Those with mental illness and other chronic conditions usually have few resources of their own to pay for their care.

The question raised by the way we treat elders with mental illness is an important one.  Do federal and state policymakers mean to throw the neediest of us out into the cold as we age?

If you have questions about this column, or wish to receive an email notifying you when new Our Health Policy Matters columns are published, please email gionfriddopaul@gmail.com.  For more columns about mental health policy, click on the “Mental Health” tab at the top of the page.

Mental Disorders in the Armed Forces

“In 2011, mental disorders accounted for more hospitalizations of U.S. service members than any other diagnostic category.” – Armed Forces Health Surveillance Center Medical Surveillance Monthly Report, June 2012

Recently, my daughter Elizabeth told me about a friend who stopped in to see her at the mall where she works while attending college.  Like her, he’s in his early twenties.  They worked together at a toy store a few years ago, and she hadn’t seen him since then.

He had enlisted in the army.  He was deployed overseas twice, and served a tour in a war zone.  He sustained a minor physical injury, now healed, while serving.

She said that he seemed a little down in the dumps when she saw him.  He told her that he is having trouble with his relationships since his return, but doesn’t think there’s anything wrong with him.  He’s pretty sure he doesn’t have PTSD, and sees no reason to seek counseling or other mental health supports.

Instead, he mostly keeps to himself and drinks a little more than he thinks he should.

Elizabeth is concerned about him, and should be.

Nearly one million (936,283 to be exact) active duty service members were diagnosed with at least one mental disorder from 2000 to 2011.

And, according to the most recent Armed Forces Health Surveillance Center Medical Surveillance Monthly Report, both the numbers and rates of service members diagnosed with mental disorders increased by 65% during the same period.

These just count active duty military personnel who are diagnosed with a mental disorder.  They don’t include either veterans or the young people who – like Elizabeth’s friend – have no formal diagnosis.

Mental disorders now account for more hospitalizations among U.S. service members than any other diagnostic category.  Suicide is the second leading cause of death among active service members (behind combat injuries), and mental disorders are the third most common reason for ambulatory care visits, behind musculoskeletal disorders and routine health care.  

Between 2003 and 2011, the rates of certain mental disorders with a significant environmental component soared as our involvement in Iraq and Afghanistan deepened.

• The rates of depression and adjustment disorders doubled.
• The anxiety rate tripled.
• The PTSD rate went up six-fold.

On the other hand, the combined rate of alcohol and substance abuse and dependence remained nearly the same (alcohol dependence was lower; other substance dependence was higher), as did the rates of schizophrenia and other psychoses. 

Just as worrisome is that the rates of the more environmentally-influenced mental disorders have not gone down as we’ve wound down our combat roles.  Between 2009 and 2011:

• The depression rate was about the same.
• The rate of adjustment disorders was 10% greater.
• The PTSD rate was 12% greater.
• The anxiety rate was 23% greater.

The surveillance report noted that all these numbers should be viewed in a broader context – that one in two adults will meet the criteria for a mental disorder at some point in their lifetimes.

Here’s the problem with that comparison.  There are only about 3 million total OEF/OIF (Iraq and Afghanistan) veterans and active duty personnel combined.  So the “lifetime” prevalence of mental disorders among the still mostly young people in these groups is already at least 30% - and could already be much higher.

As Elizabeth pointed out, “If they don’t get help today, where will they be ten years from now?”

Good question. 

So what should we do?

For one thing, we need to beef up mental health services to both active duty personnel and veterans, including planning the transition to from military to civilian life much more carefully than we have done in the past. 

We might also consider a couple of prevention strategies.  Adjustment disorders are twice as common in active duty teenagers as in any other military age group.  If we were to increase the age of recruitment by a year or two, we could prevent a lot of these.  In addition, anxiety and depression both peak when active duty personnel are in their late twenties.  If we restricted multiple deployments and limited separation from growing families, we might curtail these, too.

We also need to improve adult mental health services in general.  There are still too many policy leaders who avoid tackling this problem by pretending that mental disorders are personality weaknesses. 

But when they effectively paint at least 30% of brave, young active duty military personnel and veterans with this sloppy old brush, the real weaknesses are the policymakers’—most notably their own denial of reality.  

You can read more about service gaps in meeting the needs of veterans by clicking on the names of each of the following columns: Answering the Call, Veterans and Mental Illness, Veterans Dazed Not Dazzled by Mental Health Care, and Iraq and Back.

A Tale of Two CHCs

A couple of months ago, I was invited to the 40^thanniversary celebration and new building dedication of the Community Health Center in Middletown, Connecticut.  I regretted that I couldn’t go – a family obligation came first.

The Community Health Center started as a free clinic in a converted, second floor apartment in a downtown building.  It was about the time I was starting college, and a number of students at my alma mater, Wesleyan University, were among those who got it started.  One was John Hickenlooper, now the Governor of Colorado. 

I remember when it started to see its first patients, when it began to grow, and when it hired its first full-time doctor. 

Believing the health care was a right, not a privilege, its Board and CEO, Mark Masselli, worked hard to meet the need for safety net health care in the community.

By the time I entered the State Legislature in 1979, it was a fixture in my legislative district.  I got to know the operation fairly well over the next decade, and worked closely with the Center on a number of legislative initiatives.

The Community Health Center was one of the first centers in the nation to become an FQHC “look alike,” and later on it became a full Federally Qualified Health Center.  It used its federal dollars wisely, expanding its primary care, dental, and behavioral health care services.  Over time, it added locations in Old Saybrook, New London, Groton, Meriden, and New Britain. 

And it continued to invest in the north end Middletown neighborhood which it called home.  It developed a school-based health center.  It expanded health care services into other underused office buildings.  It even leased an unsafe eyesore of a vacant lot from the city and created a beautiful urban garden.

Today, the Community Health Center provides services to 130,000 patients in 13 cities in 201 service locations throughout Connecticut.  That’s what forty years of dedication and commitment to a cause can deliver.

Sometimes, when I return to Palm Beach County, where I live today, from a visit to Middletown, I feel like I am stepping forty years into my health care past. 

I mean this in a good way, because there are important things happening these days in Palm Beach County that happened in my part of Connecticut forty years ago. 

In the past five years:

• A new medical school opened at Florida Atlantic University, which reminds me of the UConn Health Center’s opening in the late 1960s.
• A new internal medicine residency program was started at JFK Hospital in Atlantis, FL, which reminds me of the family practice residency that began at Middlesex Hospital in the early 1970s and trained the primary care clinicians who gave me my medical home for over twenty years.
• Scripps and Max Planck established a first-class research presence in the county, much like we had at Yale University back when I was in Connecticut.

But what makes me feel just as good about the quality of healthcare in Palm Beach County is that the appropriately named Genesis Community Health Center just became one of the newest federally qualified health centers in America, because of dollars included in the Affordable Care Act.

Today, Genesis Community Health operates out of a small space in a shopping center in Boynton Beach Florida.  But, like the Community Health Center, it has big thinkers behind it.  It started from nothing in 2009, opened its doors for the first time in 2010, has already been at the forefront of primary and behavioral health care integration, and has now received its first federal community health center grant.

Genesis has joined over 1,200 centers nationwide providing services at over 8,000 delivery sites for over 20 million people – a network that within a decade may see almost as many patients each year as every hospital in America combined.   Many community health center patients are on Medicare or Medicaid, some are privately insured, and others pay their own way.

Community health centers may see health care as a right, and it is a privilege to witness what they accomplish every day.

When you look at what the Community Health Center – and so many of the long-established federally qualified health centers in America – bring to the health care table, it is hard to imagine life without them.

And when you look at the bright promise of Genesis – and others in development in Palm Beach County and beyond – it is hard not to be excited about their future.  Genesis may not accomplish over the next 40 years what the Community Health Center has accomplished over the last 40, but I wouldn't bet against it.

If you have questions about this column or would like to receive an email notifying you when new Our Health Policy Matters columns are published, please email gionfriddopaul@gmail.com.

Saving the Medicaid Expansion

Within days of the Supreme Court’s ACA ruling that made the Medicaid expansion optional, the governors of Florida, South Carolina, Iowa, and Louisiana all announced that they wanted to opt out of it.

The governors of six other states were considering the same thing.

However they frame their views for the media, they are in fact an attack on two different constituencies.  The first is lower income uninsured families, elders, and single adults, 17 million of whom expected to become insured as a result of the expansion.  The second is safety net providers - nursing homes, hospitals, community health centers, mental health facilities, and others - who need Medicaid dollars to offset the costs of caring for people who have no insurance.

Some hospital providers will even get hit twice - once when they lose direct Medicaid dollars and again when they lose their Medicaid Disproportionate Share (DSH) payments that were cut by ACA in anticipation of the Medicaid expansion.

The Court’s opinion characterized the ACA Medicaid expansion mandate as “a gun to the head” of states.  I have included the full quotation at the end of this column. 

It said that this was because the “financial inducement” the federal government created to get states to participate – the loss of all Medicaid funding – went far beyond “relatively mild encouragement.”

So how might the federal government save the Medicaid expansion in states reluctant to embrace it, and deliver on its promise of coverage to millions of American citizens? 

It could thump its chest and hope providers will rise up in opposition to the governors.  Or it could be guided by the Supreme Court’s majority opinion and come up with a better idea that might actually work.

This is what it might look like.

The federal government should just keep the expansion “option” in place for all the states, paying almost all the bill for those states that accept it. 

And it should make a slight modification in the existing Medicaid funding formula to reduce its reimbursements by one-quarter of 1% to those states that reject the expansion.

Right now, the federal government pays at least half of the costs of every state’s Medicaid program.  But it also rewards failure, by paying much more to states that have done worse jobs of developing and maintaining a good economy for everyone. 

Not by chance, the federal share is higher in the states that want to opt out of the expansion.  South Carolina gets 70%, Louisiana gets 61%, Iowa gets 59%, and Florida gets 58%. Wealthier states like Connecticut, by contrast, get only 50%.

It’s a lot easier to turn down the funding for the Medicaid expansion when you’re already getting tens and hundreds of millions of dollars more than other states for your basic Medicaid program! 

The governors of these states know what a good deal they already have, and how much more Medicaid money they get at the expense of others who do more for their residents.

If the federal government were to change the formula in the way I’ve suggested, they would still have a very good deal.  Florida would still get 57.83% of its Medicaid costs from the federal government.  Iowa would still get 59.24%, Louisiana would still get 60.99%, and South Carolina would still get 70.18%.

Such modest adjustments would surely meet the Court’s definition of “mild encouragement” versus a “gun to the head.” 

Taxpayers would be happy, because it would save us real money if a state chose not to take on the expansion.  Concern for taxpayers was exactly what Florida’s Governor Scott, among others, suggested was his motivation for dismissing the expansion. 

But, most importantly, it would change the economic incentives for these states.

Let’s use Florida as an example.  For the sake of the illustration, we’ll pretend that there’s no inflation. 

In its Supreme Court brief, Florida contended that the Medicaid expansion would cost $351 million. 

Over the next ten years, Florida’s share would average of 7% of that, or just under $25 million per year.

Florida’s existing Medicaid program currently costs around $21.2 billion a year.  The federal government pays $11.6 billion of this.  If it were to reduce its reimbursement to Florida by one-quarter of 1%, it would save $29 million annually.

Under this scenario, Florida’s Governor would have a true choice.  He could embrace the expansion at a cost to the state of $25 million per year, or turn it down at a cost to the state of $29 million per year.

If it’s really only about the money, these governors will know exactly what they need to do.

Here is the extended quotation from the Roberts ruling on the constitutionality of the Medicaid expansion:

“We have upheld Congress’s authority to condition the receipt of funds on the States’ complying with restrictions on the use of those funds, because that is the means by which Congress ensures that the funds are spent according to its view of the “general Welfare….” When… such conditions take the form of threats to terminate other significant independent grants, the conditions are properly viewed as a means of pressur­ing the States to accept policy changes….”

 “In this case, the financial “inducement” Congress has chosen is much more than “relatively mild encourage­ment”—it is a gun to the head. Section 1396c of the Medi­caid Act provides that if a State’s Medicaid plan does not comply with the Act’s requirements, the Secretary of Health and Human Services may declare that “further payments will not be made to the State.” 42 U. S. C. §1396c. A State that opts out of the Affordable Care Act’s expansion in health care coverage thus stands to lose not merely “a relatively small percentage” of its existing Medi­caid funding, but all of it…. We cannot agree that existing Medicaid and the expansion dictated by the Affordable Care Act are all one program simply because “Congress styled” them as such. Post, at 49. If the expansion is not properly viewed as a modification of the existing Medicaid program, Congress’s decision to so title it is irrelevant.”  Roberts Decision, p. 50, 51-52

Public Health, Mental Health, and Health Policy in a Post-ACA World

Now that the ACA decision is behind us, what’s on the horizon in the world of public health, mental health, and health policy?

The truth is that ACA was essentially neutral with respect to prevention and public health.  3% of our nation’s health funding went to these services last year, and 3% will continue to go to these services with or without ACA.

That won’t stop the assault on public health.  Federal, state, and local governments have all cut public health services in recent years and, unless we have a public health crisis, may well cut further.

And Chief Justice Roberts took a swipe at public health programs in his majority decision, when he wrote on page 22 and 23:

“To consider a different example in the health care market, many Americans do not eat a balanced diet. That group makes up a larger percentage of the total population than those without health insurance…. The failure of that group to have a healthy diet increases health care costs, to a greater extent than the failure of the uninsured to pur­chase insurance.… Under the Gov­ernment’s theory, Congress could address the diet problem by ordering everyone to buy vegetables.”

In other words, the majority went out of its way to raise a question about how far it will let health promotion programs can go in the future.

ACA still points the way toward some of the most promising strategies for improving our nation’s health.

It created:

• A new $16 billion prevention fund (that has already been raided for other purposes).
• A “community transformation grants” program to promote individual and community health and prevent or reduce the incidence of chronic diseases associated with obesity, tobacco use, or mental illness.
• A primary care extension program to train primary care providers about evidence-based therapies in preventive medicine, health promotion, chronic disease management, and mental health.

Why is it so hard to fund public health and prevention?  Simply put, because when prevention works, nothing bad happens.  So prevention develops no new constituencies over time.

Mental disorders also directly get about 3% of our nation’s total health expenditures, but people with mental illnesses gained much more through ACA, and had more at stake in the Court debate. 

These gains included:

• Guaranteed access to health insurance, regardless of pre-existing conditions. 
• Coverage for mental health services as part of the basic benefits package in health insurance.
• The right of children who develop mental illnesses to remain on parents’ insurance policies until the age of 26.
• Beginning in 2014, guaranteed Medicaid and Medicare Part D coverage for benzodiazepines (such as xanax and valium), barbiturates, and smoking cessation drugs.
• A mandatory 3-year, 8-state demonstration project to reimburse inpatient and residential treatment facilities for services to adult Medicaid beneficiaries in need of medical assistance to stabilize a psychiatric emergency.  
• Grants to states to prevent and manage co-morbid chronic conditions in the Medicaid population; grants to organizations to co-locate and integrate health and behavioral health services; and grants to educational institutions for the development or enhancement of behavioral health training programs in the areas of child and adolescent behavioral health.

These initiatives now all move forward.  The challenge of protecting them from future Congressional assault will fall to the families and advocates of the one in four people with a mental illness each year and, especially, the one in twenty with a serious one.

Looking toward future health policy in general, there are two things about health care that neither ACA nor the Supreme Court’s ruling changed.

First, health care costs will continue to rise.  Keep in mind the number 5.7%.  That’s the average annual increase that CMS analysts project over the next ten years – far above the rate of inflation. 

Second, health care costs will rise not just because of new drugs, new technology, and higher labor costs, but for a much simpler reason, too – because policy leaders give altogether too much attention to how we pay for health and mental health services after we get sick, and too little attention to how we protect health and mental health in the first place.

Keeping people out of the health care delivery system whenever we can is by far the wisest health care cost containment strategy we can pursue.

It’s the one thing everyone wants, no matter whether they are liberal or conservative, Republican or Democrat, rich or poor.

In the post-ACA political world, this at least should be possible.

This is the fifth in a series of five OHPM columns on the impact of the Supreme Court decision on the Affordable Care Act. 

What the ACA Decision Really Means for the Future of Medicare and Medicaid

In the wake of the Supreme Court’s decision on the Affordable Care Act, the future of the two biggest government health insurance programs – Medicare and Medicaid – just became much more interesting.

The Affordable Care Act made significant changes to both programs, and they will change the landscape of federally-financed health care in the future.

Most noteworthy, it closed the Medicare prescription drug donut hole. This is no small matter to the 3.6 million people who benefitted in 2011 alone.  Altogether, they saved $2.1 billion in drug costs, an average of over $600 per person, according to the Center for Medicare and Medicaid Services (CMS).

In addition, Medicare recipients are receiving a whole new set of free preventive services, including annual physicals.  In the first five months of 2012, CMS reported that 14.3 million recipients received at least one free preventive service as a result.

But these benefits didn’t come without a cost.  And even before the passage of ACA, the Medicare Trust Fund was slowly bleeding out its reserves.

The Medicare Part D Drug Benefit program, enacted in the early 2000s, added about $1,870 – or 15% more – to the average benefit a Medicare beneficiary received in 2011.

In part because of this added benefit, according to the 2012 Report of the Medicare Trust Fund Trustees the Medicare Trust Fund lost $19 billion last year.

So Congress did two things to constrain Medicare costs.  The first was to impose a reduction in physician payment rates by 31% beginning in 2013.  The Affordable Care Act savings assumed that this reduction would be put into effect; however, the “doc fix” forestalled this in 2012, as it has in every year for the last decade.

The second – approved in ACA – was to cap rate increases for Medicare providers in the future.

The combination of these two cost saving measures is significant.  Medicare today costs about 3.7% of GDP.  With the cost-saving measures in place, its share of GDP is still expected to grow to 6% by 2040, and to 6.7% by 2085. 

This is pretty high.  Without the cost-saving measures, however, Medicare costs rocket to an almost unsustainable 10.3% of GDP over the next seventy-five years.

Can Medicare be fixed?

The answer is yes.  According to the Trustees’ report, it would take a Medicare tax increase of 0.67% to individuals, and 0.67% to employers, to guarantee the future of Medicare as we know it for the next 75 years.  In other words, for every hundred dollars in Medicare taxes we currently pay, we would need to add 67 cents more.

Is saving Medicare worth those 67 cents to the 80 million of us who will be insured by the program in 2030?

ACA’s changes to the Medicaid program were even more significant.

Medicaid is an important safety net program not just for elders and lower income people, but for most health providers, too.  Medicaid today makes 60% of all payments to nursing homes, and 37% to community health centers, 35% to public hospitals, 26% to behavioral health providers, and 17% to hospitals overall.

ACA increased the eligibility standard for Medicaid to 133% of poverty – approximately $30,000 in yearly income for a family of four today – beginning in 2014.  It also mandated states to do the expansion, which would add 17 million people to the program by 2016, bringing the total number of Medicaid recipients to 52 million.

However, the court ruled the mandatory Medicaid expansion unconstitutional, leaving it up to the states.

“Nothing in our opinion,” Chief Justice Roberts wrote, “precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding." (p. 55)

Even though the federal government will pay the entire expansion cost for the first three years, and at least 90% of the annual cost afterwards, Florida led the charge in opposition, arguing in its Supreme Court brief that this expansion amounted to “coercion.”

And within two days of the ruling Florida's governor said that he wouldn't agree to the expansion because it "can't afford it."

But his position is undercut by Florida's own analysis. 

While it forecasted a 900 million dollar Medicaid price tag because of ACA, it acknowledged that most what it was counting - $574 million – was attributable to people who are already eligible for Medicaid under the old pre-ACA rules, but not yet enrolled.

That cost isn’t going away despite the Court’s ruling.

So what’s left for the anti-Medicaid states?  They can opt out of the expansion, but they’ll have to give up the new funding.  It makes little fiscal sense to do so, when the federal government is offering so much money. But stranger things have happened.

This is the fourth in a series of five OHPM columns on the impact of the Supreme Court decision on the Affordable Care Act. Tomorrow: The Post-ACA World: Health, Public Health, and Mental Health Policy in the future.