Monday, July 22, 2013

Why Missouri should expand the Medicaid program

Paul is hosting a series of community forums this July & August on Medicaid Expansion throughout Southwest Missouri. These forums will provide community members with an overview of what’s currently going on with Medicaid expansion and give real answers as to how the actions of the state legislature will directly impact Missouri employers, the local economy and individuals. For additional tour dates and details, visit: 

I strongly favor expansion of the Medicaid program in Missouri under the Affordable Care Act. I do not have the luxury of taking a principled position on purely political or philosophical grounds, but, if I did, I would still favor expansion. Expansion of the Medicaid program in Missouri will help people. It will help OCH care for more people. It will provide an economic benefit for OCH so that we can continue paying taxes and employing Missourians. Without it, due to reductions in payments from Medicare and Medicaid, OCH will struggle to survive, and if OCH fails, thousands of Missourians will struggle to find similar access to primary care.

The healthcare payment system in this country should not work this way. It should not be impossible to run a healthcare business on what the government pays for healthcare services, but it is. The few healthcare systems that manage to do it with a predominantly governmental patient mix depend on grants, donations or taxpayer support (in the case of government owned hospitals). Most healthcare systems manage to limit the percentage of governmental patients they treat so that they can shift cost to better paying commercial insurance patients. OCH cannot do so, because we have so few commercial insurance patients. In a way, OCH will serve as a test case for reform (or perhaps as the canary in the mine): we have no sources of income or revenue other than payments for services; and we almost exclusively care for governmental patients. If “reform” leaves government healthcare programs in a cockeyed mess, OCH will suffer disproportionately.

As I indicated, OCH favors expansion of Medicaid in Missouri because it is obviously in our interest. Why should anyone else? Before getting “redirected” by political posturing and economic rationalizations, I believe it is important to begin with certain fundamental principles on which we should all agree.

First, good health for everyone is a good thing for Missouri. We can only be a strong nation if we are a nation of healthy people—both physically and mentally. A healthy economy requires healthy workers. The consequence of poor physical health is too obvious to warrant discussion. The consequence of poor mental health to individuals and society at large should be just as obvious, but, in case it has escaped anyone’s attention, recent events have reinforced the point.

Second, regular access to healthcare promotes good health. I doubt anyone will object to that statement, but it gets a little tricky when the focus is regular access to healthcare for Medicaid and uninsured people. Let me put it this way: if regular access to healthcare will not improve the health of people on Medicaid, then there is little reason to believe that regular access to healthcare will improve the health of any other segment of the population—and we should start closing all our hospitals, clinics and doctors’ offices.

Third, healthcare insurance (including government programs like Medicare and Medicaid) improves access to healthcare. There should be little debate about this point. Without spreading the risk through insurance, the cost of healthcare would strain the pockets of all but the wealthy few. Since all people share the risk that they will experience an expensive health event some time in their lives, insurance works best if all people are included in the risk pool. Given the self-evident truth of the first two principles, one might expect the strongest nation on earth would want to protect and preserve that strength by ensuring regular access to healthcare for its people by requiring everyone to get into the “pool.” In point of fact, we did pass a law doing just that… sort of.

Most conversations about healthcare place people in one of three “coverage” groups: people covered by commercial insurance, people covered under a governmental program and people without insurance. We need to redraw that Venn diagram. People without insurance should be classified as people covered under a government benefit program. The federal government long-ago mandated universal access to care for anyone presenting at a hospital with an emergency medical condition (a mandate which, in most hospitals, has evolved into universal access to care for anyone with a medical condition who shows up in the ER); however, the mandate did not come with a corresponding mechanism for mandating payment. Some have referred to EMTALA as the equivalent of a universal healthcare program. If so, it is the worst kind of universal healthcare program one could imagine. In fact, it is one of the fundamental reasons the healthcare payment system in this country was so broken it needed something like the Affordable Care Act to try to fix it.

EMTALA has no reimbursement provision. Hospitals are required to guarantee the service but there is no guarantee of payment. This asymmetry has had a profound ripple effect on our national healthcare system. It created a culture of entitlement. It is my position that healthcare is an essential service; we can debate the issue in abstract terms, but the reality is the government has already established a universal “right” to healthcare. Furthermore, the government says we are entitled to it regardless of whether we pay for it. EMTALA conditioned people to see healthcare fundamentally in that light. Is it any wonder so many people feel conflicted about paying their medical bills and that so many are filing bankruptcy? As a private attorney many years ago, I counseled clients on personal bankruptcies. Though they seldom thought about why they felt that way, people with large medical bills were much more likely to feel justified in filing bankruptcy. They felt they had been saddled with a debt that was somehow really not fair. If healthcare coverage is a right and if that coverage is not “provided” through employment or otherwise, people do not feel pressure to buy insurance since there is “coverage” (through EMTALA) that does not cost anything.

Good health for everyone is a good thing for Missouri; regular access to healthcare promotes good health; and healthcare insurance promotes regular access to healthcare. Therefore, healthcare insurance for everyone would be a good thing for Missouri. The logic is inescapable; unfortunately, logic and politics are poor bedfellows, and political reality, to this point at least, dominates all other considerations. The expansion of Medicaid in Missouri will confer a number of significant economic benefits on the State of Missouri. Those benefits were disclosed, debated and not seriously denied during the last legislative session; so, I see little wisdom in repeating them yet again. The economic benefits are undeniably real; yet, they were not deemed sufficient to override political considerations—and the political landscape has not changed in Missouri.

However, the political landscape has changed outside Missouri, and that change presents a problem for Missouri. The Missouri legislation passed a dramatic tax cut while deferring debate on expansion of Medicaid. Supporters of the tax cut often cite competition from neighboring states as motivation for the tax cut: businesses will relocate to neighboring states with a more favorable business environment. Those who make that argument should recognize that the same rationale applies in favor of expanding Medicaid. Missouri is going to lose businesses and jobs to Arkansas which has adopted a program expanding healthcare insurance to those who qualify under the ACA.

OCH has a small hospital in northwest Arkansas, and I have spoken at a number of public events about Medicaid expansion in Arkansas. Businessmen who were adamantly opposed to the ACA in Arkansas have already begun making plans based on the fact that their employees will be getting insurance paid by the government. These employers are typically paying their employees $10-$12/hour. Their employees will qualify for coverage under 138% of the federal poverty level. Many employers who were worried about compliance with the ACA mandate are now realizing the expanded Medicaid provision will provide coverage at no cost to the employer. Arkansas will be attracting businesses and workers away from Missouri—at no expense to Arkansas. The economic boon Missouri missed by refusing to expand Medicaid will improve the economic vitality of Arkansas both within the healthcare industry and beyond it. It is already reality for OCH.

One of the rationales for delaying or declining the Medicaid expansion begins by stating that the Missouri Medicaid system is broken and that it makes no sense to expand a broken system. OCH is in a better position than most to know whether the Medicaid system is broken, and I can testify that it works. It does not work as well as I would like, but it is not broken. From my perspective, the commercial insurance “system” in our market is far more broken than Missouri Medicaid; yet, no one seems inclined to fix it. If there is a sincere desire to fix the Medicaid program in Missouri and not mere political gamesmanship to avoid adopting something that came from “Obamacare,” I believe the repair can be made quickly and efficiently. Contract with Medicare to process and pay claims for Medicaid beneficiaries as though Missouri Medicaid was Medicare. The ACA essentially requires that states provide the equivalent of Medicare coverage in order to qualify for 100% federal funding of the expanded Medicaid program. Why not simply adopt a Medicare look-alike? Anyone who suggests that Medicare is also a broken healthcare delivery and payment system is either being disingenuous or is simply uninformed. Medicare may not be perfect, but it is the backbone of American healthcare. Almost all commercial insurance companies now follow the Medicare reimbursement methodology by basing payments on a percentage of the Medicare fee schedule.

Wisconsin Provider Services (WPS) is the Medicare Administrative Contractor (MAC) which processes and pays all Medicare claims for a multi-state region that includes Missouri. Missouri could contract with WPS to pay Medicaid claims following Medicare methodology with funds provided by the federal government. The efficiency of such an arrangement should be immediately apparent. Hospitals and physicians have great familiarity with the Medicare system. In reforming Medicaid, the Missouri legislature should avoid at all cost any attempt to create a new, one-of-a-kind healthcare payment system from the ground up. Now is not the time to make healthcare in Missouri more complicated, and we should all fear the unintended consequences of legislative reforms of systems as complex as healthcare.

If the desire to reform the Missouri Medicaid program is sincere, there exists a quick, efficient “fix.” The real issue is whether Missouri should opt to expand Medicaid under the ACA. If the should is a moral, ethical, legal, logical or economic should, there is no question Missouri should expand the Medicaid program. If the should involves a political imperative, I urge politicians to consider the political consequences of losing momentum to neighboring states who acted when Missouri failed to act.