Medicaid Expansion: Déjà Vu All Over Again

Published March 28, 2013

Republican governors are following the script of Obama and Clinton in their campaign strategy for the Medicaid expansion that is needed to implement ObamaCare: The cast of earnest white coats and tearful upstanding, hard-working patients with hard-luck stories. Statements that sound as though they were written by the same PR firm. The same dire consequences of inaction.

Children won’t get their shots, cancer patients won’t get their chemotherapy, hospitals will close, a victim of hepatitis C will die without benefit of treatment, people won’t go to the doctor and be made healthy, jobs will move to China, and on and on—unless we expand Medicaid to people at 133% (actually it turns out to be 138%) of the federal poverty level. But not 150%, 250%, or 500%.

“It’s just the right thing to do,” is a favorite concluding sentence.

What “it” basically means is to get the “free” federal money before somebody else does. Since it doesn’t cost “us” anything, at least not at first, it’s a “no brainer” to just grab it. It means billions of dollars, and thousands of jobs, for “us.”

But if we exercise our brains for a minute, we see that in reality the billions go to “them,” not “us.” They are the ones in the expensive suits lurking in the background and attending the closed-door meetings. They are the million-dollar-a-year executives of managed-care companies or administrators in big hospital chains. They get the billions and trickle a portion down to people in scrubs and white coats who do real work, for the care of approved patients. They are the real players; the visible ones are props, shills, or camouflage. They are the decision-makers, who decide who is eligible for what.

They don’t think like doctors. Doctors ask, “What is the best way to help this patient with hepatitis c?” Rather, they ask, “Is this person with a certain set of social characteristics worth spending some of ‘our’ resources?”

The case made by the hospital lobby does not compute. Big hospitals are expanding and renovating. They have opulent reception areas and building cranes in front. They claim to lose money on every Medicaid patient—yet they want more such patients? They bemoan the loss on uninsured patients—but their DSH payments (disproportionate share payments meant to compensate for this) will be cut more under ObamaCare if the state expands Medicaid than if it does not. Big CEOs are not dumb. They surely have a reason, with dollar signs on it, for wanting more Medicaid. I just don’t think they are telling us what it is.

Managed-care companies want Medicaid for an obvious reason. It is their cash cow. They have the process of covert rationing down to a science. No need to worry about not meeting executive payroll. If drugs are too expensive, they disappear from the formulary; cancer treatments that are too costly become “inappropriate,” “experimental,” or even “futile.”

Patients of course want care. But do they really want Medicaid? About one-third of eligibles do not enroll. Maybe it is just too difficult. Maybe they read the disclosure form explaining that if any money is spent on their behalf after age 54, whether for managed-care fees or actual services, it can be seized from their estate. Maybe they know that a lot of doctors won’t make an appointment for them if they have a Medicaid card.

Doctors representing organized medicine are on the dais with the governor. But they probably don’t want more Medicaid patients in their own practice. The pay is low, and administrative overhead is high. Worst may be the frustration in having to constantly fight to get patients what they need.

Medicaid was enacted in 1965 and has grown and grown to the point of threatening to bankrupt states. It covers about one in five Americans, but the number of uninsured keeps growing too.

One might think that it is time to do something different. Instead, when a government program fails, the no-brainer answer is to expand it further. We see it over and over again. It’s as predictable as the result of letting Lucy hold the football for Charlie Brown.

[First published at AAPS Online.]