The Mystique of Medicaid Expansion

Imagine 100% of Americans covered by insurance across private insurance and Medicare and an expanded Medicaid across all US locations. Would this be a great boost to health care in the US or not?

Many would jump for joy at 100% insurance coverage. But the reality for health policy always remains the same. There are always winners and losers. Rather than a blatant promotion of expansion, more important is to understand who would win and who would lose?

The current situation in Medicaid makes the answer quite obvious. Those providing the lowest paid services at the current time would remain the lowest paid - primary care, geriatric primary care, mental health care, basic services, cognitive services, office services. Despite 100% insurance coverage, the payments for these services would be insufficient to hire the team members and support the care needed, because payments are below the cost of delivery.
Expansion Requires Expansion and Subtraction Is Contraction

A decent business executive would indicate the need for 30% revenue above the cost of running the business. This would be considered a minimum for the establishment of a new business. Health care with its ebbs and flows and uncertainties would require at least this 30% margin. A minimum of 30% would also be a requirement to attract investors, pay and train workforce, and establish a business.

The fact remains that Medicaid does not allow primary care and especially complex costly primary care to survive. The consequence of doing business with Medicaid payers is payment too low in addition to delays and denials and other cash flow issues. A financial design that does not sustain care is a design that prevents expansion of care. Insurance expansion is not the same as access to care.

The hundreds of thousands in additional costs for each primary care physician 
to address past and present ACA regulations 
can only subtract from the benefit of any insurance expansion.

Medicaid prevents hiring and supporting more team members to see more patients in more places. In other words, the designs of US health care prevent true reform - expansion of access, expansion of primary care, expansion of mental health, expansion of care where needed where Medicaid and Medicare patients are concentrated.

Expansion Winners - The benefit of Medicaid Expansion would go entirely to those paid better in Medicaid with those paid worse suffering - with or without Medicaid Expansion.

The mystique of Medicaid Expansion will continue 
until the reality of payment too low for the cost of delivering care 
via Medicaid is understood as the major problem.

It is actually quite difficult to believe the number of leaders and "experts" who are deceived by expansion rhetoric. Yes, the regression equations demonstrated benefits for locations and populations with higher levels of insurance coverage - but you can also demonstrate dozens if not hundreds of other variables with the same relationship and with much better relevance for care and care outcomes.

The Solution Was Payment Expansion Not Insurance Expansion 

There are 2621 counties spanning the breadth of expansion and not expansion that have lowest concentrations of physicians due to lowest payments and due to dependence upon Medicare, Medicaid, lowest paying plans, and lowest paid basic physician services. Mental health is also lowest paid. Health care outcomes are impaired by lowest across education, income, health literacy, and local resources as well as high complexity and difficult situations.

Many of these counties actually had good levels of insurance coverage before ACA because of high proportions of Medicare and Medicaid. The problem was not insurance coverage. The problem was lack of access due to insufficient workforce due to Medicare and Medicaid payments too low.

The Great Irony of Expansion

With Investment - During the 1970s design with increased payments, facilities and practices were afford to care for patients without insurance because they were caring for Medicare and Medicaid patients.

Without Investment - During the 2010s, providers where care is needed cannot afford to care for patients with or without insurance because of high proportions of Medicare, Medicaid, and other low paying plans and patients.

Before and After ACA

Another problem of ACA is funding taken away. Before ACA, many facilities where care is needed received disproportionate share funding - a recognition of high levels of low paying plans and no paying patients. After ACA, these funds were taken away. ACA creates winners and losers, depending upon where dollars were cut. States create losers where payments are lower - with or without expansion.

Note also the recent lawsuit settled by CMS that indicated too little was paid using underestimates of the numbers and overestimates of those who had some payment.

After ACA, small hospitals are still closing at 1 per month and small practices are being forced out due to lower payment, higher cost of delivery, and declining productivity due to ACA.

Will Red States Benefit with Expansion

Which era in history are we talking about? Red states were once Blue states prior to Civil Rights laws. President Johnson knew what would happen from Blue to Red when he signed the Civil Rights Bill. Red or Blue matters little where people have highest poverty and the most people concentrated together on Medicare and Medicaid plans. It is not a surprise that these locations have problems as they receive the least education and health and other payments by national design.

Regardless of expansion for or against or political party or health policy expertise, real reforms are needed in cognitive payment plus real decreases in cost of delivery to hope to expand access to care.

Recent Posts and References 

Rallying One Hundred for Health Access Not MACRA


The Ultimate Government Health Care Paradox - Government must facilitate better EHRs and better health access, not prevent them.

Government Compromise of Trauma Response
No Positive Spin for the Innovator Tailspin - more claims for innovation successes are apparently attempts to hide failure
Stop the Promotion To Restore Mental Health Access - claims of mental health care reforms or improvements are a stark contrast from the reality of lowest payment, highest complexity of care, unreliable payment, and poor support other than lots of rhetoric





Primary care can be recovered and should be recovered, 
but cannot be recovered when moving the wrong directions

Robert C. Bowman, M.D.        Robert.Bowman@DignityHealth.org

The blogs represent the opinion of the blogger alone.
Copyright 2016

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