Posts Tagged ‘Medicare’
I posted about this last year when I was once again wading through physician credentialing. I recently had occasion to do it again because I’m helping out a friend at a new hospital, and, if anything, the process is even worse.
Everyone wants to be sure their physician is competent and appropriately trained. The way this is done is through credentialing. A new applicant for privileges to practice at a hospital or other healthcare facility fills out an application and submits a curriculum vitae that details when and where a physician trained and the certifications obtained, such as specialty boards, and a work history (if any). Copies of key documents — medical degrees, residency certificates, and the like — accompany the application. The applicant also provides the names of professional references who can attest to competency. Also required are declarations that the applicant has never been fired (or asked to resign) from a medical job for competency issues. The applicant also must also swear to a long list of other things. These include not being a drug addict (who would answer yes to that?), a convicted felon, or to have been disciplined for questionable or illegal activity. A committee then reviews the application and grants (or not) privileges to practice medicine at that facility.
Before the committee grants privileges, however, all the information gets verified. This makes perfect sense because, regrettably, there are more than a few documented instances of people embellishing or even outright lying on their applications. I have been on enough selection committees to know that folks occasionally stretch the truth. Flagrant examples of this occasionally make the news. The job of credentialing departments is to check up on all this. Interestingly, in the example I just linked to, the guy hoodwinked all the verifiers; it was only picked up later by accident.
It gets more complicated because not just hospitals and healthcare facilities want their practitioners credentialed. All of the people who pay the bills, such as insurance companies and the government — Medicare, Medicaid — want to make sure they are paying legitimate costs to legitimate practitioners. So they have their own credentialing departments, all different in how they do things. A typical physician has to be credentialed by every single one of the payers covering every single one of his or her patients. That can mean a dozen payers or more. So, for example, besides having privileges at the hospitals at which I practice, my background is verified by all the people who pay the bills for my patients. And believe me, the requirements of all these entities are not the same and all have their own sheaf of forms to fill out and supporting documents to submit.
This situation cries out for a central clearing house for credentialing information. Some examples of this exist, such as this one, if nothing else because collecting all this information is tedious and expensive. Credentialing departments at many facilities are getting larger all the time. Credentialing is also a major industry, with overwhelmed facility credentialing staffs farming out the process to outside contractors. The problem is that, in our disorganized healthcare “system,” no facility or entity wants to surrender the right to collect their own data in their own way. Attempts to institute a more global process, at least in my experience, have simply added another layer of bureaucracy to slog through. The convenience, or even the sanity, of the physicians wrestling with this unholy mess is not their concern. For physicians like me, who practice at several hospitals in different parts of the country with little overlap in who the regional payers are, the expense and hassle of it all are large. And even when you think you’re done, you’re not: many entities require frequent updates, often meaning a whole new application. One that I deal with demands this every three months.
Okay — rant over. But what prompted this was my agreeing recently to help out some people for a few weeks at a new hospital. I’m now four months into the credentialing “process.” During that time I’ve dealt with three separate organizations, none of which communicate with each other. I’ve worn out my fax machine submitting extraneous document after document. Nearly every day my email inbox has strident demands for still something else IMMEDIATELY! If I hadn’t promised my time to people I like, I think at this point I would just say: no, I’m done — good luck.
I’ve been practicing medicine for over 35 years. For my first job I just showed up for work. People checked that I had graduated from medical school, done a residency, and passed my exams, but that was about it. I realize physicians have to some extent brought all this on ourselves by a few of us scamming the system over the years or just lying. I recall a case some years ago of a physician lying about a five year gap in his work history, a gap that turned out to be because he was serving time in prison for third-degree murder. (I looked for a link to this incident but couldn’t find one — it most likely was pre-Google.)
Anyway, I think this credentialing mess has got to get better organized somehow. We need a central authority of some sort, accepted by all. The current trajectory is unsustainable. Healthcare is expensive enough, and all this adds many millions to the total costs for little benefit.
[This is important. It was written by Phil Galewitz and republished (by permission) from Kaiser Health News (KHN), a nonprofit national health policy news service.]
Repealing the federal health law would add an additional 19 million to the ranks of the uninsured in 2016 and increase the federal deficit over the next decade, the Congressional Budget Office said Friday.
The report is the first time CBO has analyzed the costs of the health law using a format favored by congressional Republicans that factors in the effects on the overall economy. It is also the agency’s first analysis on the law under Keith Hall, the new CBO director appointed by Republicans earlier this year.
CBO projected that a repeal would increase the federal deficit by $353 billion over 10 years because of higher direct federal spending on health programs such as Medicare and lower revenues. But when including the broader effects of a repeal on the economy, including slightly higher employment, it estimated that the federal deficit would increase by $137 billion instead.
Both estimates are higher than in 2012, the last time that the CBO scored the cost of a repeal.
The latest report from the nonpartisan congressional watchdog and the Congressional Joint Committee on Taxation comes just days before the Supreme Court is expected to rule on the health law’s premium subsidies in the nearly three dozen states that rely on the federal marketplace. Such a ruling would cut off subsides to more than 6 million people and be a major blow to the Affordable Care Act. It could also boost Republican efforts to repeal the entire 2010 law, which would likely face a presidential veto.
Last week, President Barack Obama said nearly one in three uninsured Americans have been covered by the law—more than 16 million people.
The CBO said repealing the health law would first reduce the federal deficits in the next five years, but increase them steadily from 2021 through 2025. The initial savings would come from a reduction in government spending on the federal subsidies and on an expanded Medicaid program. But repealing the law would also eliminate cuts in Medicare payment rates to hospitals and other providers and new taxes on device makers and pharmaceutical companies.
The CBO projected that repeal would leave 14 million fewer people enrolled in Medicaid over the next decade. Medicaid enrollment has grown by more than 11 million since 2013, with more than half the states agreeing to expand their programs under the law.
By 2024, the number of uninsured would grow by an additional 24 million people if the law is repealed.
In 2012, the CBO projected repealing the health law would increase the federal deficit by $109 billion over 10 years. It said the higher amount in Friday’s report reflected looking at later years when federal spending would be greater.
One of the goals of the Affordable Care Act (aka Obamacare) was to increase access to primary care physicians. The notion is that if people have insurance it would be easier for them to get appointments with primary care physicians. This is because many physicians are unwilling to accept new patients who are uninsured. Further, a key component of the ACA was to increase physician reimbursement for Medicaid because this program was a major mechanism for expanding insurance coverage. Medicaid reimbursement has always been low — significantly lower than Medicare pays for the same encounter — so many physicians would not take it. The ACA drafters hoped higher reimbursement would entice these physicians to accept Medicaid. We don’t know if any of these assumptions are correct, but a recent study published in The New England Journal of Medicine suggests a positive impact.
The authors’ method was a bit sneaky, I suppose. They had trained field staff call physicians’ offices posing as potential patients asking for new appointments. They were divided into two groups; one group said they had private insurance, the other said they had Medicaid. The authors compared two time periods — before and after the early implementation of the ACA. A sample of states were compared to see if the rates of acceptance of new Medicaid patients was associated with a particular state increasing physician Medicaid reimbursement.
The results were not striking, but they suggest a significant positive trend. This is what the results showed, in the authors’ words:
The availability of primary care appointments in the Medicaid group increased by 7.7 percentage points, from 58.7% to 66.4%, between the two time periods. The states with the largest increases in availability tended to be those with the largest increases in reimbursements, with an estimated increase of 1.25 percentage points in availability per 10% increase in Medicaid reimbursements (P=0.03). No such association was observed in the private-insurance group.
Again, these are data from the early days of ACA implementation. But they are encouraging. One of the most important components of slowing the seemingly inexorable rise in healthcare costs is getting people good primary and preventative care. This keeps people with a chronic, manageable condition out of the emergency room and, one hopes, out of the hospital. This is particularly the case with common conditions like diabetes and asthma. For both of those disorders regular care by a primary care physician can spare patients much suffering and save many thousands of dollars.
I hope this kind of research continues as the ACA matures. It’s a good way to see if the overall goals are being met. Of course it raises a new challenge: making sure we have enough primary care physicians. Right now we don’t.
Everyone wants to be sure their physician is competent and appropriately trained. The way this is done is through credentialing. A new applicant for privileges to practice at a hospital or other healthcare facility fills out an application and submits a curriculum vitae that details when and where a physician trained and the certifications obtained, such as specialty boards, and a work history (if any). Copies of key documents — medical degrees, residency certificates, and the like — accompany the application. The applicant also provides the names of professional references who can attest to competency. Also required are declarations that the applicant has never been fired (or asked to resign) from a medical job for competency issues. The applicant also must also swear to a long list of other things. These include not being a drug addict (who would answer yes to that?), a convicted felon, or to have been disciplined for questionable or illegal activity. A committee then reviews the application and grants (or not) privileges to practice medicine at that facility.
Before the committee grants privileges, however, all the information gets verified. This makes perfect sense because, regrettably, there are more than a few documented instances of people embellishing or even outright lying on their applications. I have been on enough selection committees to know that folks occasionally stretch the truth. Flagrant examples of this occasionally make the news. The job of credentialing departments is to check up on all this. Interestingly, in the example I just linked to, the guy hoodwinked all the verifiers; it was only picked up later by accident.
It gets more complicated because not just hospitals and healthcare facilities want their practitioners credentialed. All of the people who pay the bills, such as insurance companies and the government — Medicare, Medicaid — want to make sure they are paying legitimate costs to legitimate practitioners. So they have their own credentialing departments, all different in how they do things. A typical physician has to be credentialed by every single one of the payers covering every single one of his or her patients. That can mean a dozen payers or more. So, for example, besides having privileges at the hospitals at which I practice, my background is verified by all the people who pay the bills for my patients. And believe me, the requirements of all these entities are not the same and all have their own sheaf of forms to fill out and supporting documents to submit.
This situation cries out for a central clearing house for credentialing information. Some examples of this exist, such as this one, if nothing else because collecting all this information is tedious and expensive. Credentialing departments at many facilities are getting larger all the time. Credentialing is also a major industry, with overwhelmed facility credentialing staffs farming out the process to outside contractors. The problem is that, in our disorganized healthcare “system,” no facility or entity wants to surrender the right to collect their own data in their own way. Attempts to institute a more global process, at least in my experience, have simply added another layer of bureaucracy to slog through. The convenience, or even the sanity, of the physicians wrestling with this unholy mess is not their concern. For physicians like me, who practice at several hospitals in different parts of the country with little overlap in who the regional payers are, the expense and hassle of it all are large. And even when you think you’re done, you’re not: many entities require frequent updates, often meaning a whole new application. One that I deal with demands this every three months.
Okay — rant over. But what prompted this was my agreeing recently to help out some people for a few weeks at a new hospital. I’m now four months into the credentialing “process.” During that time I’ve dealt with three separate organizations, none of which communicate with each other. I’ve worn out my fax machine submitting extraneous document after document. Nearly every day my email inbox has strident demands for still something else IMMEDIATELY! If I hadn’t promised my time to people I like, I think at this point I would just say: no, I’m done — good luck.
I’ve been practicing medicine for over 35 years. For my first job I just showed up for work. People checked that I had graduated from medical school, done a residency, and passed my exams, but that was about it. I realize physicians have to some extent brought all this on ourselves by a few of us scamming the system over the years or just lying. I recall a case some years ago of a physician lying about a five year gap in his work history, a gap that turned out to be because he was serving time in prison for third-degree murder. (I looked for a link to this incident but couldn’t find one — it most likely was pre-Google.)
Anyway, I think this credentialing mess has got to get better organized somehow. We need a central authority of some sort, accepted by all. The current trajectory is unsustainable. Healthcare is expensive enough, and all this adds many millions to the total costs for little benefit.
There is one aspect of our relentlessly rising healthcare costs that seems particularly out of control — administrative costs. An interesting recent editorial in the New England Journal of Medicine provides some sobering details.
Every physician confronts daily the burden of dealing with healthcare bureaucrats of various sorts. The average doctor personally spends 43 minutes each day at it, and behind every physician there is an army of coders. They all communicate (inefficiently) with another army of insurance company employees and Medicare and Medicaid workers. What is the added cost of all this baked into the system? Do we have any idea? Can we do anything about it?
The Institute of Medicine, a component of the National Academy of Sciences, estimates the yearly administrative costs to be 361 billion dollars. This is a staggering sum — twice the amount of money we spend on heart disease and three times what we spend on treating cancer. Can we do anything about this?
Many have suggested that a single payer system would be the obvious answer, since providers would not be dealing with dozens of insurance and governmental entities. Although this is my view, I realize that right now it is just not politically feasible. It is the standardization of methods and procedures that matters most. The question, as well laid out by the editorial authors, is if we can reap some of the benefits of standardization without a single payer system? The authors think we can, and I agree.
One issue that really, really needs better standardization is physician credentialing. Each healthcare entity, be it a hospital or a payer, has its own way and standards of reviewing the credentials of physicians. And believe me, it’s a mess that just gets worse and worse. I have practice privileges at several hospitals and medical licenses in several states. Each one of these has its own, often idiosyncratic, standards for credentialing physicians, and these credentials need to be redone every couple of years. The process takes many hours and causes many headaches. There are national databases that keep relevant information about physicians — medical school and residency information, medical license information, information on disciplinary actions. You might think this would have made the process faster, but it just added another layer to the mess. Hospitals spend millions of dollars duplicating work that has already been done. It’s crazy.
Credentialing and other systems that are used to establish contracts between providers and health plans are riddled with redundancy, with many organizations collecting virtually identical information from providers. The typical physician spends more than 3 hours annually submitting nearly 18 different credentialing forms, with staff spending an additional 20 hours.
This sort of craziness is found all through the system (which really isn’t a system at all) that we have. The editorial’s authors go on to suggest several useful things which, if implemented in the context of the Affordable Care Act, would save billions:
The possibilities for reducing administrative complexity are immense. The reforms we describe could save as much as $20 billion annually for providers (roughly $29,000 per physician), or $40 billion annually for all stakeholders. And $2 billion of these savings would accrue to the federal government — a relatively small but valuable contribution to reducing the deficit. For the individual physician, these savings could translate into more time and resources for direct patient care — and therefore into improved professional satisfaction.
As we look for ways to make our healthcare system more efficient, this sort of thing truly is low-hanging fruit. It wastes resources we should be putting toward patient care.
The electronic medical record (EMR) is here to stay. Its adoption was initially slow, but over the past decade those hospitals that do not already have it are making plans for implementing it. On the whole this is a good thing because the EMR has the ability greatly to improve patient care. Physicians, as well as all other caregivers, no longer have to puzzle over too often barely legible handwritten notes or flip through pages and pages of a patient’s paper chart to find important things. With the EMR, it is easy to see what medications a patient is taking, when they were started, and when they were stopped. Physicians can easily find key vital signs – temperature, pulse, respirations, and blood pressure – plotted over any time frame they wish. All the past laboratory data are displayed succinctly. But it is not all gravy.
I use the EMR every day, and I am old enough to have trained and practiced when everything was on paper. The EMR is overall a good thing. Yet there is a problem with the EMR: it is trying to serve too many masters. The needs of these various masters are different, and their needs are sometimes incompatible, even hostile to one another. These masters include other caregivers, the agencies paying for the care, and those interested in medico-legal aspects of care. What can happen, and I have seen it many times, is that the needs of the caregivers take a back seat to the needs of the payers and the lawyers. The EMR is supposed to improve patient care, but sometimes it makes it worse. Physician progress notes are an important example of how this can happen.
Progress notes are the lifeblood of the medical record. They tell, from day to day, what physicians did to a patient and why. They are a narrative of the patient’s care. Three decades ago we sat down, pulled out a pen, and wrote out our daily progress notes. There were standard ways of doing this, but physicians were free to organize their notes however they liked. That was both a blessing and a curse. It was a blessing because not all patients fit the standard way of note writing, so you could modify how you recorded things; it was a curse because every physician was different, and some wrote very sketchy notes indeed, notes from which it was very difficult to figure out what happened. I once did a research project for which I was reading physician notes from the nineteen twenties, thirties and forties. I recall one patient in particular who was clearly desperately ill. He had critically abnormal vital signs (which I could tell from the nurses’ graphic chart), needed several blood transfusions, and even stopped breathing once. His progress note for the day, written by a very famous and distinguished physician, was one line: “Mustard plaster didn’t work.”
Physician notes have evolved a great deal since 1930. Certainly in my medical career, which began in 1974, physicians were expected to make some reference to what they were thinking, why they did or did not do what they did. Sometimes the notes were cryptic jottings that made it very hard to follow what was happening. But most of the time you could understand what your colleagues were thinking. But if this worked reasonably well for physicians, other users of the medical record complained loudly. Payers, such as insurance companies and Medicare, based their payment upon those notes. They were unwilling to pay for anything that was not clearly documented. They also increasingly based their payment structure on the complexity of the medical decision making; if physicians wanted to be paid at a higher rate for managing a complex and difficult patient they needed to show in their note just why that patient was complicated. They needed to show what they were thinking, and what information, such as laboratory data and the physical examination, they used to make their decisions. Finally, for the lawyers, the operative phrase was “if it’s not documented, it didn’t happen.” In theory, the goals of all three users – caregivers, payers, and lawyers – should be in alignment. But with the EMR the needs of the caregivers, which should be paramount, are losing ground.
The EMR, since it is on a computer, can be manipulated in all the ways a computer allows. Hospitals are laying out millions to implement the EMR, and to ensure maximum payment they want to make sure it is easy for the payers to find in the EMR all the things the payers want there. This is accomplished, among other things, through the use of templates and “smart text” for progress notes. For example, a physician writing a progress note in Epic, a popular EMR system, can open a template that has many components of the evaluation already filled in. The program can bring into the note all the previous laboratory values. It has all the categories of the physical examination sitting on the screen for the physician to fill in. It is easy to “drag and drop” information from previous notes with simple keystrokes. There’s nothing intrinsically wrong with all this. It can make producing a complete progress note quick and easy. But it also can destroy the original purpose of the progress note – to give a narrative of the patient’s progress. It can stifle the conversation between physicians embodied in traditional progress notes.
Recently I saw an example of the problems this can cause. A couple of weeks ago I heard I was getting a patient into the pediatric intensive care unit with multiple problems, most acutely a blood problem. One of these lesser issues was a heart problem that required surgery. Because of the other serious problems, though, the surgery had been postponed for the future. I read about all this in the patient’s EMR before she even arrived in the PICU, which is one of the great aspects of the EMR. We no longer have to wait for a clerk pushing a cart around the hospital to deliver the paper chart. The patient had been seen just that morning by her hematologist for the blood issue and the progress note in the EMR told me the plan for her heart problem was surgery sometime in the future when the child’s other problems had improved. It said so right there on the screen. In fact, all the notes had been saying that for over a year. So imagine my surprise when I went in to see the child and saw an obvious and well-healed surgical scar on her chest, clearly from cardiac surgery. She had had her heart fixed two months before at another institution. I gave her hematologist the benefit of the doubt and assumed her doctor knew the surgery had been done, and that what had happened (I hope) was that the doctor had used the beguiling convenience of drag and drop on the progress note template to do the note. This particular incident was innocuous, but I think you can see the potential for mischief with this sort of thing.
This is not an isolated event. I have seen many examples, so many that I now cast a suspicious eye on all those uniformly formatted progress notes. The ease with which mounds and mounds of verbiage and laboratory data can be stuffed into a progress note may give the payers what they want, but it often does not give me what I want, and that is some evidence that all this information was processed through a physician’s brain and led to a carefully considered decision about what to do. I want a human voice, and that is getting harder and harder to find in the EMR’s stereotypic and bloodless documentation.
Medicine is about stories – patients’ stories. I was taught forty years ago that most of the time the history gives us the diagnosis. Osler reputedly said: “Listen to the patient. He is telling you the diagnosis.” (That attribution has been questioned, but the spirit is definitely Osler’s.) Of course these days our wonderful scientific tools often give us the answer, and I certainly do not wish to toss all those things aside to go back to using only what Osler had. But medicine is not really a science. It is based on science, uses science, and is increasingly more scientific. But medicine also contains large measures of intuition, educated guessing, and blind luck. I do not think that aspect will ever go away completely. When I read (or wade) through a patient’s record, I look for the story. When I cannot find a coherent story, I cannot give the best care.
For myself, even though I of course use the EMR, I refuse to use all those handy smart text templates. It takes me longer, but I type out my progress notes, organized as I did when I used a pen and chart paper. It takes me a little longer, but it makes me think things through. No billing coder has ever complained. More than a few colleagues have told me, when seeing shared patients, that they search through the EMR to find one of my notes to understand what is happening with the patient. I recommend the practice.
A recent editorial in the New England Journal of Medicine makes an interesting contrast between the approaches public and private health plans have taken in controlling costs. It points out how governmental health programs — Medicare and Medicaid — have long focused on controlling costs by focusing on the unit cost of things. So they have paid less attention to how many of something, say a surgical procedure, gets done and more attention to the cost of each one. What can happen in this approach is that doctors do more and more of whatever it is in order to make up the lost revenue. This can be quite bad for patients. Overutilization of health services is already a huge problem; some estimates are that a quarter to a third of medical care provided in America is unnecessary. More care is not better care, although that notion in some way seems to go against our national ethic.
Private insurers have generally tended to take another approach: instead of largely focusing on the unit cost of providing a service, they have tried to control the number of times the service is provided, using such things as preauthorization requirements. The result has been predictable — the gap between the unit cost paid by private insurers, always more than public programs paid, has been getting steadily larger. In 2000, providers on average billed private payers about 15% more than public ones for the same procedure; by 2009, the difference was 30-40% more for the private ones. In the same period, public payers on average cut by 10-15% what they would pay for the procedure. So if you add up the math, you can see what has happened: in order to maintain revenues, providers are shifting the costs to the private payers. This cost shifting has been known in the healthcare world for years, but it is getting worse and worse. It represents a sort of hidden tax on all of us, and it is one of the things driving healthcare costs even higher.
I recommend the editorial. It’s short and easy to understand. It’s also eye-opening as to the magnitude of the cost-shifting phenomenon.
In all the noise of our current debate over government funding of healthcare, most people seem unaware that the government — federal and state — already pay half of our nation’s healthcare bills. Although some of this funding comes through the Veteran’s Administration system, the bulk of it is in the form of two government programs — Medicare and Medicaid. Again, most people lump them together in their minds. Physicians and hospitals, however, realize that, although the two programs were begun at the same time in the mid-1960s, they are very, very different.
Medicare is the federally funded program that cares for the elderly. We pay into the program with a payroll tax and are generally eligible for coverage under it when we reach age 65. Everybody is eligible, regardless of income. In contrast, Medicaid is a program jointly funded by the federal government and the states. It is for children of low-income families, pregnant women, and the disabled. (This is slated to change with implementation of the Affordable Care Act, aka Obamacare, with low-income adults also eligible.) The ratio of federal money to state money in Medicaid varies — the federal contribution is higher for poorer states — but for most states the number is about fifty-fifty.
That’s the funding side. Looking at the payment side, the money paid out to hospitals and doctors shows a huge disparity between Medicare and Medicaid that few people outside healthcare know about. Medicare typically pays much more to the provider than Medicaid does FOR THE EXACT SAME SERVICE. You can read more about the details of this disparity, which the Affordable Care Act also aims to change, here. As with all things about Medicaid, it does vary from state to state. But it is not unusual for a physician to be paid ten times as much by Medicare for the same thing. Why is this?
The fundamental reason is that, when Medicaid was established, the Congress needed to compromise to get it passed. That compromise needed to accommodate Congressmen who were frank racists, mostly Southern Democrats. As Timothy Jost wrote:
The fact that Medicaid is a federal-state cooperative program, rather than a national program like Medicare, is an artifact of a history of which we should not be proud. It is in part the history of trying to keep poor people on relief under the thumb of local government, where their lives could be managed more closely. It is also in part the history of racism, with which President Roosevelt had to come to terms to get his New Deal programs past Southern Democratics in Congress who insisted on control over who got welfare and how much.
A huge proportion of poor people in the South during the 1960s were black. And Congress wanted to make sure of two things: not as much money would be spent on them; and the individual states could keep the medical care the poor received worse than that of more affluent people by the simple expedient of paying doctors and hospitals less money to deliver it.
The effects of this huge disparity in reimbursement has had predictable effects on physicians, who frequently lose money with every Medicaid patient they see. Not surprisingly, six times as many physicians refuse to see Medicaid patients as refuse to see Medicare patients.
It’s all a sorry legacy, and its correction is a key component of the Affordable Care Act.
With all the arguing about how to pay for healthcare it’s useful to step back and take a long, comparative view. To do that takes both knowledge and experience. Victor Fuchs, distinguished professor of economics and healthcare policy at Stanford, has both of those qualities, and recently shared his perspective in an excellent editorial in the New England Journal of Medicine here. A simple graph serves as his reference point.
What the graph shows is that, since 1960, governmental payment for healthcare has been steadily increasing as private payment has been decreasing; in 1960 the split was 80% private, 20% government. The two are nearly at parity now, a 50/50 split.
Fuch’s points out that, although the government pays for half the care, it makes relatively little attempt to use that clout to restrain costs:
Thus, in one sense, Americans wind up in the worst of all worlds, with government bearing a big part of the burden of paying for health care, with the concomitant large burden of taxes, but exercising very little control over the cost of care. As an indication of how absurd the situation is in the United States, government currently spends more per capita for health care than eight European countries spend from all sources on health care.
One of my principal concerns with how we do things now is that I think insurance companies add a large measure of cost without adding much value. We simply cannot continue to devote the huge chunk of our GDP that goes to healthcare, a number that is steadily rising.
The solution will be a political one, as it should be. But people should look at Fuch’s simple graph and realize that government already is the largest single payer. Judging from the firestorm of rhetoric in the last election about keeping Medicare strong, I don’t see that changing.
Medicaid is the joint state/federal program that covers low-income families with children, disabled persons, and long-term care for the elderly. It’s particularly important for our PICU patients: although only a quarter of America’s children are on Medicaid, half of PICU patients are (details here).
With the implementation of the new healthcare reform bill, a key feature is that Medicaid coverage will be extended to low-income adults who are not in these categories. The federal government pays at least 50% of the costs of Medicaid, with the individual states picking up the rest.
Some states, however, receive far more help than others. Mississippi pays only 25% of its Medicaid costs, for example. (You can see what each state pays here.) Why the difference? Is that fair?
The answer is that Medicaid was set up so that the poorest states — those with the lowest per capita personal income — got more support from the federal government. The intent, I think, was to reduce disparities in medical care quality from state to state. It’s not clear it has turned out that way.
Medicaid is an enormous financial problem for most states, largely because many are forbidden by their constitutions to run a deficit; so every year they need to find a way to pay their share of the Medicaid bill. In contrast, the federal government is allowed to use deficit spending for its obligations.
One way to make the system fairer between the states would be to federalize it. After all, Medicaid was enacted at the same time as Medicare, and the latter is entirely a federal program. As Maggie Mahar has pointed out, this was actually Ronald Reagan’s preference. It is unfair to demand, as we currently do, that the states finance Medicaid one way while the feds are allowed to finance it another way. Federalizing the program could also ensure that citizens of poor states get the same care opportunities of those living in richer states.
Making Medicaid a federal program should at least be a financial wash to the total economy — new expenses for the federal government would be countered by reduced expenses to the state governments. There should be administrative savings, since right now there are, in effect, fifty separate Medicaid administrations. As someone who has practiced medicine in several states, I can testify that they vary substantially in how (and how well) they operate.
Sachin on 