Note to readers—please read the post below, “Pulse—More Stories from the Heart of Medicine” (which includes “One More Child Left Behind”) before you read this post.
When I read “One More Child Left Behind,” all I could think of was how much Aaron’s arm must have hurt during the more than 24 hours that he didn’t receive treatment. I also imagined how frightened and bewildered the six-year-old must have been as he heard his mother and grandmother talk, and realized that they couldn’t persuade a doctor to help him.
This story was published in 2009—one year before the Affordable Care Act was passed. The ACA extends Medicaid to millions. But even under reform legislation, many children like Aaron will not receive care. This is because Medicaid now pays an average of 34% less than Medicare for exactly the same treatment.
Why on earth would we pay doctors and hospital less to care for poor patients than we would pay them to care for the elderly?
Lower Medicaid fees are part of the legacy of racism. (I write about this in Money-Driven Medicine.) When the Medicare and Medicaid laws were passed in 1965, Southern Congressmen refused to agree to laws that would pay doctors who treated the poor as much as they reimburse physicians who care for older patients.
At the time, relatively few African-Americans living in the South were over 65. Most died long before they would be eligible for Medicare. Yet many African-Americans were poor, and would qualify for Medicaid. This is what disturbed Southern legislators. They wanted to make sure that healthcare remained segregated.
Even under Reform, Specialists Who Treat the Poor Will be Under-Paid
Medicaid rates vary widely by state, but on average, according to the Kaiser Family Foundation, the new program will offer PCP’s a 73 percent raise This should open doors for millions of Medicaid patients. In some states that have been paying the lowest rates, the hike will be much higher. (See this map) The ACA guarantees raising Medicaid reimbursements for primary care for just two years (2013-2014). But I expect this program will be extended, although increases may be modified. Once begun, it will be very hard to justify ending it.
At the same time, specialists who care for Medicaid patients will continue to receive about 1/3 less than when treating seniors. As a result, even under the ACA a great many Medicaid patients will be hard-pressed to find a specialist willing to see them.
A 2011 study published in the New England Journal of Medicine reveals that when researchers called specialty clinics posing as mothers looking for care for their children and said that they were covered by Medicaid-CHIP, 66% of the callers were denied an appointment. When researchers called the same clinics, and said the child was covered by private insurance only 11% were turned away.) Among 89 clinics that accepted both insurance types, the average wait time for Medicaid–CHIP enrollees was 22 days longer than that for privately insured children.
A second 2011 study investigating access to orthopedic care for children found that timely access was available in 100% of the offices polled if the child had private insurance, vs. 2% of the child was on Medi-Cal (California’s version of Medicaid.) “This is a significant difference,” researchers noted. “Lack of timely orthopedic care may result in poor outcomes, ie, if a fracture is not properly aligned in the first few weeks, a permanent deformity may result.”
If the child’s parents took him to an ER, wouldn’t a physician have to treat him? No, by law an ER is required only to “stabilize” a patient, not to treat him. Moreover, as Aaron’s story reveals, if an orthopedist is not present in the ER, and a specialist qualfiied to handle the case is not “on call,” no one would required to come in.
Do Physicians Have a Moral Obligation to Treat Medicaid Patients?
Should specialists accept patients like Aaron, even if they are paid so much less? \U
I would hope they would. Though rather than talking about a moral obligation, I would prefer to call it a “professional” obligation to see at least some Medicaid patients.
But if we expect physicians to care about children like Aaron, what about the rest of us? Don’t we as a society, have an obligation to pay physicians who treat the poor as much as we pay those who treat the wealthy? (Granted, in some cases we over-pay providers who care for well-insured patients. My point is simply that reimbursements to all physicians should be based on the value of the care they provide– not who the patient is.)
Moreover, as “One More Child Left Behind” illustrates, doctors themselves rarely are making case-by-case or face-to face decisions. The physicians who were contacted didn’t see Aaron. Instead, a receptionist took the call, and he or she had been told: “We do not take patients covered by this [Medicaid] insurer.”
I understand why many doctors feel they cannot afford to treat a large number of Medicaid patients. But as Medicaid expands, I wish that more specialists would tell their receptionists that they are willing to see a small number of new Medicaid patients each month.
Still, that’s only a stop-gap measure. Ultimately, reimbursements for Medicaid providers must be raised.
Converting Medicaid into a Federal Program– One Payment Schedule for Both Medicare and Medicaid
Ultimately, I believe that Medicaid should become a federal program, administered by the Centers for Medicare and Medicaid (CMS), alongside Medicare, with one pay schedule for all providers.
If Washington took over Medicaid, CMS would enjoy economies of scale; administrative costs would be lower. And the Federal government is in a better position than the states to investigate fraud, using FBI raids to gather evidence, much as it has when uncovering Medicare fraud at hospital chains like Tenet.
States would be asked to contribute to a federal Medicaid program. No doubt the formula determining how much a state should kick in would be complicated. But it should begin with the amount that a state now spends on Medicaid, and, perhpas, factor in taxable resources per capita in that state.
The federal government already has pledged to cover 100% of the costs of Medicaid expansion from 2014 to 2016. In the years that follow, its contribution falls slowly. In 2020, Washington’s share will reach 90%–and stay there. At that point, if Medicaid were a federal program, state contributions would rise to cover just 10% of the cost of new enrollees.
Over time, a state’s contributions also would have to climb to reflect inflation, but using a formula tied to the consumer price index (CPI), not health care inflation. (One goal of reform is to make sure that health care prices are not rising faster than prices in other parts of the economy.)
States would be expected to pay into a federal Medicaid program because Medicaid funds would continue to contribute to a state’s economy, creating jobs and funding public hospitals. At the same time, states would be relieved of the burden of trying to reform what is now a dysfunctional program. (To be fair, today, some extremely poor states just cannot afford to run a decent Medicaid program. Others lack the will.)
As we reform payments to providers, reimbursements should reflect how much the treatment helps the patient. A doctor would be as well-paid to set the shattered arm of a six–year old as he is to treat the fractured arm of a sixty-six -year old.
Finding the Money to Fund Higher Payments for Medicaid Providers
How could we afford to hike reimbursements for those who care for Medicaid patients? By following the National Commission on Physician Payment Reform’s recent recommendations on physician pay.
Earlier this month the Commission, (chaired by Dr. Steven Schroeder, Distinguished Professor of Health and Health, at the University of California, San Francisco and former President and CEO of the Robert Wood Johnson Foundation, along with former Republican Senator Majority Leader Dr. Bill Frist,) issued a spot-on blueprint for overhauling how we pay physicians. /
If Medicare followed this model, it would reduce overpayments in some of the most expensive areas of care. The savings that follow from these fundamental reforms would be enormous. The Centers for Medicare and Medicaid could then use at least part of the money saved to boost pay for physicians who are underpaid–including those specialists who care for Medicaid patients.
It is worth noting that under the Affordable Care Act, the Secretary of HHS already is given the power to lower reimbursements for “over-valued services” while raising reimbursements for “undervalued services.” If Medicaid became a federal program, all of the recommendations below would apply equally to Medicaid and Medicare.
— “Include a component of quality or outcome-based performance reimbursement in all fee-for-service contracts. UnitedHealthcare reports that depends in part on their meeting quality measures — have significantly lowered complication rates for the 250,000 physicians participating in its Premium Designation program — whose compensation stent placement procedures and knee arthroscopic surgery, and have 14 percent lower costs, than specialists not in the program. WellPoint has obtained similar results in its pilot programs.
–“Increase reimbursement for evaluation and management (E&M) services. The current fee-for-service system places a higher value on high-technology care than preventive measures. . . . .annual updates should be increased for evaluation and management codes, which are currently undervalued. Updates for procedural diagnosis codes, which are generally overvalued and thus create incentives for overuse, should be frozen for a period of three years. During this time period, efforts should continue to improve the accuracy of relative values, which may result in some increases as well as some decreases in payments for specific services.
“The undervalued evaluation and management services at issue are often those that provide preventive health and wellness care, address new or undiagnosed problems, and manage chronic illnesses. The current skewed physician payment system causes a number of problems, such as creating a disincentive to spend time with patients with complex chronic conditions; leading physicians to offer care for highly reimbursed procedures rather than lower-reimbursed cognitive care; and neglecting illness prevention and disease management. High reimbursement for procedures also subtly nudges specialists such as gastroenterologists and pulmonologists away from E&M services and toward doing procedures.
“Moreover, physicians doing diagnostic or therapeutic procedures earn considerably more than physicians who mainly evaluate and manage patients — even those with multiple chronic conditions. In 2011, a radiologist, on average, earned $315,000 a year, while a family doctor on average earned $158,000. This has led medical students — many of whom leave school heavily in debt — away from the E&M specialties and toward the higher paying procedural and imaging specialties.”
–The report stresses that paying more for E&M services should not be limited to boosting reimbursements to primary care physicians: “the real issue is not one of relative payment of specialists versus primary care physicians but, rather, of payment for E&M services as contrasted with procedural services. These include E&M services provided by, among others, cardiologists, endocrinologists, hematologists, infectious disease specialists, neurologists, psychiatrists, and rheumatologists.
— “Eliminate higher payment for facility-based services that can be performed in a lower-cost setting. Recently, there has been a trend to reimburse medical services performed in outpatient facilities at a lower rate than those same services when provided in hospitals. For example, Medicare pays $450 for an echocardiogram done in a hospital and only $180 for the same procedure in a physician’s office. It makes no sense to pay extra for an in-hospital procedure that can be done more cheaply in an ambulatory facility.”
Would Republicans Consider Letting Medicaid Become a Federal Program?
No doubt, deficit hawks would fret that if the federal government took responsibility for Medicaid, this would contribute to the federal deficit. But in fact, we are “one nation:. Whether the federal government runs a deficit or states face a shortfall, taxes are likely to go up because the federal government will wind up increasing aid to the states.
Indeed, as a result of the Great Recession that began in 2008, 2011 became the first year that federal aid became the largest component of state revenues. . . . While state revenues have declined during this recession, debt-financed federal aid has risen. Nationwide it now stands at more than one third of total state revenues
Most States are not allowed to run deficits. They must balance their budgets. This might sound like fiscal discipline, but in fact it leads to spending cuts that hurt the economy as a whole. In recent years, as states have struggled to close budget gaps, this has led to downsizing “that has cost us hundreds of thousands of jobs, undermining education, health care,” and other priorities that we as a nation shares the Center for Budget Policy and Priorities (CBPP) observes. “These cuts have helped delay the recovery.”
By contrast, as the New America Foundation’s Michael Lind points out “ during severe economic crisis, completely federal social insurance programs like Social Security and Medicare have a greater stabilizing effect on the macro-economy than partly-federal, partly-state-based social insurance programs like Medicaid and unemployment insurance.
What We Can Do Now?
I realize that turning Medicaid iinto a federal program is not something that will happen tomorrow. It would have to be done in steps, probably beginning with “dual-eligibles”—people who qualify both for Medicare and for Medicaid.
Under the Affordable Care Act, CMS will begin paying for Quality. Here I would suggest that s roviders seeking bonuses for “better care”– whether by creating Accountable Care Organizations or by forming “medical homes”– might be asked to show that they treat a certain percentage of Medicaid patients. If a specialist or hospital hopes to earn more by providing high quality care, a willingness to treat the poor could become one measure of a provider’s commitment to improving American healthcare.
Of course, some hospitals and many specialists are located in neighborhoods where there are few poor patients. But Medicaid could provide bus fare or other transportation to take Medicaid patients to specialists and hospitals outside of the neighborhoods where they live. If we want the poor to enjoy the same standard of care that others receive, we must move away from segregated acute care.
Finally, as both I and my former HealthBeat partner, Naomi Freundlich, have argued in the past, non-profit hospitals that shun the poor (and some do), should begin paying property taxes.