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The Medicaid Standoff and the Need for Flexibility

July 02, 2014
11:55 am

The White House’s Council of Economic Advisors released a report this week that is clearly intended to intensify the pressure on the 24 states that have, thus far, refused to expand their Medicaid programs, as provided for under the Affordable Care Act.  As we recall, the U.S. Supreme Court ruled that the federal government cannot compel states to go along with the Medicaid eligibility expansion and many, predominantly with Republican governors and/or legislatures, have elected to pass.

In its report, the White House’s economic advisors make the point that almost 5.7 million more Americans will have health coverage in 2016 if these currently non-compliant states embrace expansion.

We’ve made clear in this space the Healthcare Leadership Council’s view that Medicaid is not the best option for reducing America’s uninsured rolls.  Medicaid’s reimbursement rates for doctors and hospitals, significantly lower than private insurance and even Medicare, underscore the point that coverage does not necessarily equal access.  Nonetheless, less-than-ideal coverage is better than no coverage for the millions of Americans who need healthcare but can’t afford to pay the providers who are delivering that care.

But, while it’s easy to blame states for not getting on board, the Administration needs to recognize its own responsibilities in this area.

It is fortuitous timing that the White House report was released in the same week that the state of Indiana submitted its proposal to the Department of Health and Human Services for an expansion of its Healthy Indiana program as an alternative to enlarging traditional Medicaid.  As Indiana governor Mike Pence wrote in an op-ed, Healthy Indiana 2.0 is a better fit for the sensibilities of his state in that in that enrollees can take greater control of their own healthcare decisions through contributions to private accounts that are not unlike health savings accounts.

As he put it, “As national leaders in healthcare innovation, Hoosiers understand empowering people to take greater ownership of their healthcare choices is better than government-driven healthcare.”  Pence backed up his rhetoric with metrics showing that Healthy Indiana participants use preventive health services at a high rate while making less use of expensive emergency room care.

The Indiana case, as well as the movement toward innovative Medicaid plans in Iowa, Arkansas and other states, emphasizes the argument that flexibility is critical in bringing Medicaid expansion to all 50 states.  It’s simply a political reality that many states with conservative-leaning leaders do not like ‘Obamacare,’ don’t necessarily trust the federal government to keep its promises in regard to financial support for Medicaid expansion and are not going to change their current programs.

On the other hand, granting flexibility to make better use of private health plans and to incorporate patient engagement and responsibility can help resolve a situation in which we’re essentially two separate nations when it comes to Medicaid.  HHS approving the Indiana proposal would be an excellent step in this necessary direction.

The Medicaid X Factor

October 28, 2011
9:38 am

As a study published in Health Affairs this week points out, anyone who believes they have a handle on what will happen when Medicaid undergoes an unprecedented expansion this decade is kidding themselves.

The study by a trio of professors at Harvard University’s School of Public Health shows a huge possible variation in the number of low-income Americans who enroll in Medicaid once eligibility is expanded in 2014 to include anyone below 138 percent of the federal poverty level.  The expansion, according to the researchers, could be as low as 8.5 million individuals or as high as 22.4 million, with a range of possible federal spending increases from $34 billion to $98 billion annually.

What I find particularly interesting about this study, though, is the projected impact on healthcare utilization.  Because Medicaid has lower cost-sharing than private insurance, there is an expected increase in the demand for health services among those who move from private plans to Medicaid once eligibility levels change.  Between the larger Medicaid population and this increased utilization, the Harvard researchers say the U.S. will need anywhere from 4,500 to 12,100 additional physicians to care for new Medicaid patients.

Here’s a critical passage in the report:

“These changes may pose major challenges in healthcare access because in recent years an increasing number of physicians have stopped accepting Medicaid patients.  The Affordable Care Act does provide enhanced Medicaid reimbursement to primary care clinicians for 2013-2014, but this may not be enough to ensure an adequate supply of providers for new Medicaid patients.”

Some of us have continued to argue that coverage does not necessarily mean access.  It is, without question, vitally important to provide coverage for the nation’s uninsured population, but it’s still an open question as to whether Medicaid expansion is the most effective tool for doing so.

USA Today and Medicare: The Hits, the Misses and the Absences

October 04, 2011
10:23 am

Yesterday, USA Today devoted its front page to a topic many of us have been discussing intensely for some time – how to address Medicare’s escalating costs. 

The newspaper listed five ways to “squeeze” Medicare spending and then discussed the political arguments for and against each.  Some, such as gradually raising the Medicare eligibility age from 65 to 67 and requiring higher-income beneficiaries to pay full premiums for their Medicare Part B (physician services) and Part D (prescription drug) coverage are recommendations that the Healthcare Leadership Council has made to the congressional deficit reduction “super committee.”

But, in a number of ways, the USA Today article missed the mark:

•      In discussing cutbacks to Medicare providers, including physicians, hospitals and pharmaceutical companies, the newspaper expanded on the likelihood that those health sectors would strenuously argue against any cuts, but there was no reporting on the impact those reductions would have upon beneficiaries.

This is a pet peeve of mine, as I’ve noted previously.  Too often, both politicians and commentators speak of the value of cutting providers instead of patients, obscuring the fact that reduced payments to providers has an impact on both the accessibility and quality of healthcare.  If, as the Obama Administration has proposed, pharmaceutical companies are required to send over $100 billion in rebates back to the government, can there be any other outcome besides higher prices for consumers and less money available for research and development of new innovative medicines?

Relating to another sector, there was an interesting discussion on the KevinMD blog yesterday that raised legitimate questions over whether cutting physicians’ incomes will make a dent in overall healthcare spending.

•      Aside from a quick reference to the controversy over Congressman Paul Ryan’s (R-WI), USA Today quickly dismissed the idea of giving Medicare beneficiaries greater consumer choice among competing health plans, citing one study that showed it would increase out-of-pocket costs.

The concept deserves more consideration than that.  If, as the Healthcare Leadership Council and experts like former Clinton budget director Alice Rivlin has proposed, you give beneficiaries the choice of staying in conventional fee-for-service Medicare or moving into a new competitive Medicare Exchange, both health plans and providers would be compelled to find innovative ways to reduce costs while maintaining high quality and value.  This is a pro-consumer direction that deserved more than a couple of sentences in a major story on Medicare costs.

•      Where was any reference in the USA Today story to medical liability reform?  Fixing our nation’s broken medical malpractice system won’t, by itself, fix Medicare’s long-term fiscal problems, but reducing the practice of defensive medicine to protect against exposure to litigation will certainly generate meaningful savings.

Change to: The Debate We Need

August 12, 2011
10:49 am

AFP-Getty_120874037The Republican presidential candidates who participated in last night’s Iowa debate put on quite an interesting, as well as entertaining, show.  With political analysts pointing out that this weekend’s Ames straw poll could winnow the field, the gloves came off as the eight candidates fought to maintain a critical mass of voter support.

Anyone who turned on the debate, though, to learn the candidates’ visions for healthcare in the United States would have come away disappointed.

We learned, to no one’s surprise, that the GOP presidential contenders have a steadfast dislike for the Affordable Care Act that President Obama signed into law last year.  Most of the candidates also believe that the individual health insurance mandate contained in the ACA is unconstitutional. 

It was also clear that, as long as former Massachusetts Governor Mitt Romney is the frontrunner, he will be criticized for what rival Tim Pawlenty calls “Obamneycare.”

But future GOP debates need to do more than reaffirm what the White House aspirants are against.  There are indeed widespread concerns about the current health reform law, including questions over affordability, healthcare quality and whether an unprecedented expansion of Medicaid is the best approach for reducing the uninsured population.  Those who would take Mr. Obama’s place need to spell out for us how they would do things differently.  The questions they need to answer include:

•     Do you support eliminating pre-existing conditions as a barrier to health coverage?  And, if so, how do you achieve that without an individual mandate to ensure that consumers don’t wait until they’re sick or injured to purchase health insurance?

•     How do you slow down the growth in healthcare costs without undermine healthcare quality, access or innovation?

•     How do you address the question of Medicare sustainability? 

•     What are your answers to the projected workforce shortages in healthcare?  How do we ensure enough medical professionals to treat a growing patient population?

•     With the CDC calling for a huge escalation in the number of Americans with diabetes, how do you propose to address the rise in chronic disease cases that are driving healthcare costs?

With these questions and many others, there’s an important health policy debate to be had among the Republican presidential contenders.  It just hasn’t happened yet.

IPAB Dissent Disregards Party Lines

April 15, 2011
11:55 am

It’s worth noting that, in the same week that President Obama cited the Independent Payment Advisory Board (IPAB) as a key tool in cutting future Medicare costs, a House Democrat known for her expertise on healthcare issues went public with her belief that IPAB is a bad idea that should be repealed.

In fact, Representative Allyson Schwartz (D-PA), co-chair of the New Dems Health Care Task Force, said she would support Representative Phil Roe’s legislation to do away with IPAB.  She’s not the first member of her Democratic caucus in the House to do so.  Fellow Democratic Representatives Shelley Berkley (D-NV), Michael Capuano (D-MA) and Larry Kissell (D-NC) have already cosponsored the bill.

IPAB was created by the Affordable Care Act.  The board would have the power to make Medicare spending reduction recommendations if program expenditures exceeded the per capita gross national product plus one percent.  If Congress didn’t vote down the IPAB recommendations, they would automatically take effect. In President Obama’s deficit reduction proposal, he would give IPAB even greater authority, lowering the spending threshold at which the board’s powers would kick in.

Schwartz’s reasons for opposing IPAB are good ones.  First, it transfers decisionmaking over healthcare policy from members of Congress to an unelected commission, placing an unwanted layer of bureaucracy between patients, healthcare providers and their elected representatives.  In Schwartz’s words, it would “undermine our (Congress’s) ability to represent the needs of seniors and disabled in our communities.”

She also said that she “cannot condone the implementation of a flawed policy that will risk beneficiary access to care.”

That, I believe, is the greatest knock against the IPAB concept, as it’s drawn up in the health reform law.  Rather than develop innovative ways to deliver high quality, cost effective care to Medicare beneficiaries, IPAB is simply about chopping spending levels downward.  At a time in which likely physician shortages are on the horizon, it makes little sense to “fix” Medicare by cutting payments.  As Alex Valadka, a neurosurgeon, said in National Journal, “Doctors cannot continue to ably treat Medicare patients if they are constantly wondering whether or not the money will be there to reimburse them.”

Yes, we do need to take steps to place Medicare on a sustainable course, but as Congresswoman Schwartz and others so ably point out, IPAB is the wrong tool to pursue that objective.